The U.S. stock market ended the week higher on the shortened holiday week amid signs of progress between the U.S. and China on a trade truce. Interest rates were little changed on the week with the 10-year treasury yield holding steady at 1.77%. The price of gold also saw little change, dropping only $0.30 to $1,4161.70 an ounce. Meanwhile the price of crude oil only rose a slim 0.26% to $58.10 a barrel.
This Week's Economic Highlights
As a result of the U.S. and China trade dispute, the U.S. trade deficit in goods reached a 17-month low after shrinking by 5.7% in October to $66.5 billion. Despite the relatively large drop in the deficit the U.S. is on pace to post the largest annual trade deficit in 11 years.
Initial unemployment claims fell by 15,000 for the week ending November 23rd to a total of 213,000. Meanwhile, the more stable four-week moving average only fell by 1,500 to 219,750. Continuing unemployment claims, which lags initial claims by a week, fell by 57,000 to 1.64 million.
New orders of durable goods rose by a much needed 0.6% in October after falling by 1.4% the month prior. Much of the increase came from and increase in defense-related goods while the rest of the manufacturing sector still looks soft as core durable goods orders (i.e. excludes military orders) only rose 0.1%. Over the past year new orders of durable goods has fallen by 0.72% as the U.S. and China trade war weighs heavy on the manufacturing sector.
Despite personal income coming in unchanged in October, consumers continue to spend as consumer spending rose by 0.3%, its eighth consecutive monthly rise. Meanwhile, Personal Consumption Expenditures (PCE), the Fed’s preferred inflation indicator, rose by 0.2% in October. Over the past year PCE has only risen 1.3%, well below the Fed’s 2.0% target.
“About once every generation, the markets go barking mad. If you are unprepared, you are sure to fail.”
– William Bernstein
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