- Domestic markets climbed broadly higher, shrugging off an increase in geopolitical tensions after North Korean missile launch. S&P 500 Index +1.0%, Dow +1.0%, Nasdaq +0.5%.
- Telecommunications, financials led markets; technology, utilities underperformed.
- 10-year Treasury’s yield held flat at 2.33%.
- NYSE breadth widely positive (2.2:1); volume ticked upward (~102% of 30-day avg.).
- Commodities – WTI crude oil -0.4% to $57.86/bbl., COMEX gold -0.1% to $1293/oz. U.S. dollar mixed vs. most major crosses.
- Economic data – U.S. consumer confidence index finished above expectations (129.5 vs. 124), marked the fifth straight month of increase and a new cycle high.
Overnight & This Morning
- U.S. equities tick higher at the open as bullish sentiment continues, 2nd estimate of Q3 GDP (+3.3%) tops estimates.
- Asia stocks largely shrugged of North Korea nuke test. Shanghai Composite +0.1%, Hang Seng -0.2%, Nikkei +0.5%, KOSPI -0.1%.
- Europe green across the board. Sentiment boost from reported Brexit settlement (~£45-55B), regional economic data in line or beating consensus.
- 10-year note yield +5 basis points (+0.05%) to 2.38%.
- Commodities – Crude slipping (-0.5%) to $57.70/bbl. on surprise U.S. inventory build, gold -0.6% to $1287/oz. despite geopolitics, industrial metals down sharply..3%).
- Positive outlook for active strategies. As noted in our Outlook 2018 publication, the dynamics that benefited passive strategies in recent years have started to fade and the environment for active strategies may be improving. We believe the re-emergence of a more “classic” business cycle, where investors can determine winners and losers based on fundamentals, should support active management’s recent positive momentum in 2018. With divergences in monetary and fiscal policies emerging, interest rate differentials around the world create potential tailwinds for fundamental investing, including: 1) lower correlations and greater dispersion among investments; 2) potentially higher volatility; 3) rising interest rates and inflation, which lead to variability in corporate costs and profitability; 4) strong market breadth, enabling a broader range of investments to do well; and 5) improved performance for fundamental and value factors favored by active managers.
- Outlook 2018. It’s here! LPL Research proudly presents Outlook 2018: Return of the Business Cycle, complete with insightful commentary, and economic and market guidance for 2018. Download your copy now, or order print copies on Marketing On Demand (MOD). Visit the Resource Center | Your Business | Marketing | Marketing On Demand.
- GDP (Q3)
- PCE (Q3)
- Beige Book
- Yellen (Dove)
- France: GDP (Q3)
- Germany: CPI (Nov)
- Eurozone: Consumer Confidence (Nov)
- BOJ: Nakaso, Iwata, Harada
- Japan: Industrial Production (Oct)
- Japan: Vehicle Production (Oct)
- China: Mfg. & Non-Mfg. PMI (Nov)
- Personal Income & Spending (Oct)
- Core PCE (Oct)
- Chicago PMI (Nov)
- France: CPI (Nov)
- Eurozone: Unemployment Rate (Oct)
- Italy: CPI (Nov)
- India: GDP (Q3)
- South Korea: GDP (Q3)
- Japan: CPI (Oct)
- Japan: Nikkei Japan Mfg. PMI (Nov)
- China: Caixin China Mfg. PMI (Nov)
- Markit Mfg. PMI (Nov)
- Construction Spending (Oct)
- Germany: Import Price Index (Oct)
- Italy: Markit/ ADACI Italy Mfg. PMI (Nov)
- France: Markit France Mfg. PMI (Nov)
- Germany: Markit Germany Mfg. PMI (Nov)
- Italy: GDP (Q3)
- Eurozone: Markit Eurozone Mfg. PMI (Nov)
- UK: Markit UK Mfg. PMI (Nov)
- Brazil: GDP (Q3)
- Canada: GDP (Sep)
- Japan: Vehicle Sales (Nov)