The Market Week in Review

The U.S. stock market ended the week lower amid news that China would retaliate with “strong countermeasures” if Congress proceeds with the passage of a bill supporting Hong Kong protestors.  The same news also sent interest rates lower as the 10-year treasury yield dropped from 1.83% last week to 1.77% today.  The spread between the 10-year treasury yield and the 2-year treasury yield is relatively wider than its more recent past at 0.16%, but still remains historically very narrow.  The price of gold was little changed on the week, dropping only 0.34% to $1,462 an ounce.  The price of crude oil also experienced little change, rising only 0.22% to $57.95 a barrel.

This Week's Economic Highlights

  • Housing starts rose by 3.8% in October to a seasonally-adjusted pace of 1.31 million homes a year. Over the past year housing starts have risen to a relatively strong rate of 8.5%.  Housing permits, a forward-looking indicator of housing starts, rose by 5% to a seasonally-adjusted pace of 1.27 million homes a year.  Over the past year housing permits have grown at a rate of 14.1%, its strongest rate since 2007.

  • The minutes from the Federal Reserve Open Market Committee’s (FOMC) meeting in October showed that officials “generally viewed the economic outlooks as positive”. They also noted that “Uncertainties associated with trade tensions as well as geopolitical risks had eased somewhat, although remained elevated”.  All of which likely justified their action to lower rates by another quarter of a percent, which was voted on at an 8 to 2 split.

  • Initial unemployment claims were unchanged at 227,000 for the week ending November 16th. Meanwhile, the more stable four-week average of initial claims rose by 3,500 to 221,000.  Continuing unemployment claims, which lags initial claims by a week, rose by a marginal 3,000 and currently sits at 1.69 million.

  • Sales of currently existing homes rose by 1.9% in October to a seasonally-adjusted annual rate of 5.46 million. Over the past year existing-home sales have risen at a rate of 4.6% as falling mortgage-rates offer support.  The median sales price of existing homes has risen 6.2% over the past year to $270,900.

Quote

“All successful investors have two things in common.  They are extremely disciplined and they understand the downside of their investments even more than the upside.  A big part of winning big is only losing small.”

     – Ian Cassel

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