Market Update: Thursday, November 16, 2017

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Market Recap

  • Domestic markets broadly lower. S&P 500 Index (-0.6%) snapped streak of 50 consecutive days without >0.5% decline. Dow -0.6%, Nasdaq -0.5%.
  • Telecommunications, financials outperformed. Big banks aided financials; energy, consumer staples led markets lower.
  • 10-year Treasuries higher; yields -6 basis points (-0.06%) to 2.33%.
  • NYSE breadth negative (1.8:1); exchange volume slightly above 30-day average.
  • Commodities- WTI crude oil continued decline (-0.8% to $55.24/bbl.), COMEX gold slid as well (-0.3% to $1278/oz.), industrial metals broadly lower.
  • Economic data- U.S. retail sales figures roughly in-line with expectations, +0.2% last month after September’s hurricane-inflated 1.9% performance.

Overnight & This Morning 

  • U.S. stocks jump in early trading, retracing portion of recent losses.
  • European equities seeing a bounce as well after positive U.K. retail sales data. Euro STOXX 600 +0.8%, DAX +0.5%, CAC +0.7% midday.
  • Asian markets mostly higher, Japanese markets led on tech optimism, crude oil stabilization. Nikkei +1.5%, Hang Seng +0.6%, Shanghai Composite -0.1%.
  • 10-year Treasuries retracing gains, yields +3 basis points (0.03%) to 2.35%.
  • Commodities- Oil woes continue (-0.66% to $55.13/bbl.), gold +0.2% to $1280/oz., industrial metals collectively lower.
  • Economic data- Manufacturing numbers (+1.3% vs. +0.3%), industrial production figures (+0.9% vs. +0.5%) both beat estimates.

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  • House vote on tax reform expected today. The bill is expected to pass, which is a good sign, but there’s more work to do in the Senate as the Senate bill still differs from the House version, and one of the 52 Republican senators (Ron Johnson from Wisconsin) said he opposes the Senate package because it focuses too much on large corporations and doesn’t do enough to support small businesses (pass-throughs). Republicans can only lose two party votes and still hope to pass the bill.
  • German preliminary gross domestic product for Q3 beat expectations, reading 0.8% versus 0.6% expected, but consumer price inflation (CPI) was flat (though in-line with expectations) month over month, and up 1.6% year over year. Net exports and investments were the biggest drivers. Consumer spending, which had been the biggest driver in recent quarters, was basically flat, making the beat even more interesting.
  • Japan CPI slowed to 0.3% month over month (1.4% year over year), but it was still the seventh quarter in a row with positive growth–this doesn’t do much to change the Bank of Japan’s current stimulus plan. The data may add some support for the idea of fiscal stimulus later in the year (Abe is pushing for a 2 trillion yen spending package by year end).

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Click Here for our detailed Weekly Economic Calendar

Thursday

  • Philadelphia Fed Mfg. Report (Nov)
  • Import & Export Price Indexes (Oct)
  • Industrial Production & Capacity Utilization (Oct)
  • Eurozone: CPI (Oct)
  • BOE: Carney

Friday

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