Market Update: Wednesday, November 22, 2017

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Market Recap

  • Major indexes posted solid gains amid another quiet pre-holiday trading session; Tax reform remains the focus despite Congress’ recess. S&P 500 Index +0.7%, Dow +0.7%, Nasdaq +1.0%, Russell 2000 Index +1.0%.
  • Technology was the standout sector, healthcare outperformed as well; telecommunications lagged.
  • 10-year Treasury flat; yielding 2.36%.
  • NYSE breadth positive (2.1:1); avg. exchange volume (97% of 30-day avg.).
  • Commodities – Crude halted losses +0.9% to $56.94/bbl., gold bounced back from Tuesday slide (+0.5% to $1280/oz.), industrial metals mostly higher.
  • Economic data – Existing home sales slightly above expectations (5.48 million vs. 5.44 million).

Overnight & This Morning

  • U.S. stocks opened a little higher, continuing momentum from yesterday’s advance.
  • European equities up as major indexes hold close to session highs. STOXX Europe 600 +0.5%, DAX flat, CAC 40 +0.3%.
  • Asian markets advance with Hang Seng surpassing 30,000 intraday for first time in a decade. Nikkei +0.5%, Hang Seng +0.6%, Shanghai Composite +0.6%.
  • 10-year Treasury still flat; yields holding at 2.36%.
  • Commodities – Crude adding to gains (+1.6% to $57.72/bbl.) on Canadian pipeline disruptions, gold +0.2% at $1284/oz., industrial metals also adding to prior gains.
  • Economic data – U.S. jobless claims below expectations (239K vs. 240K), new durable goods orders below expectations as well (-1.2% vs. 0.4%).

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Key Insights

  • Strong October for the economy. The Chicago Fed National Activity Index, an aggregate of over 80 economic indicators that attempts to paint an overall picture of the economy each month, posted its best number in October since January 2012. Strong data over the last month is also reflected in the Citi Economic Surprise Index, which measures the performance of economic data versus economist consensus expectations, which hit a multi-year high yesterday, reaching its strongest level since early 2014. Some of the strength in the overall data has been a bounce back from post-hurricane weakness, but the surprise index indicates the strength has been better than expected. Continued economic strength would provide a positive backdrop for equities in 2018.

 

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Click Here for our detailed Weekly Economic Calendar

Wednesday

  • MBA Mortgage Applications (Nov 17)
  • Weekly Jobless Claims (Nov 18)
  • Durable Goods Orders (Oct)
  • Cap Goods Shipments & Orders (Oct)
  • of Mich. Sentiment (Nov)
  • FOMC Meeting Minutes
  • Eurozone: Consumer Confidence (Nov)

Thursday

  • Thanksgiving Day Holiday
  • Germany: GDP (Q3)
  • Germany: Imports & Exports (Q3)
  • France: Markit France Manufacturing PMI (Nov)
  • Germany: Markit Germany Manufacturing PMI (Nov)
  • Eurozone: Markit Eurozone Manufacturing PMI (Nov)
  • ECB: Account of the Monetary Policy Meeting
  • Mexico: Central Bank Monetary Policy Minutes
  • BOJ: Outright Bond Purchase
  • Japan: Nikkei Japan Manufacturing PMI (Nov)

Friday

  • Markit US Manufacturing & Services PMI (Nov)
  • Germany: Import Price Index (Oct)
  • Italy: Industrial Orders (Sep)
  • Mexico: GDP (Q3)
  • Japan: Leading Index (Sep)

Past performance is no guarantee of future results.

The economic forecasts set forth in the presentation may not develop as predicted.

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