The Market Week in Review

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.

Quote

“About once every generation, the markets go barking mad.  If you are unprepared, you are sure to fail.”

        – William Bernstein

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