Market Update: Wednesday, December 6, 2017


Market Recap

  • Stocks continued Friday slide. November Non-Manufacturing ISM Index, ongoing tax reform negotiations weighed on sentiment. S&P 500 Index -0.4%, Dow -0.5%, Nasdaq -0.2%.
  • Flows out of technology stocks halted, as the sector being the only gainer on the day; telecommunications, utilities lagged.
  • Treasuries little changed across the curve. 10-year note yield -1 basis point to 2.36%.
  • Market breadth negative on NYSE (1.8:1), Nasdaq (1.8:1) on elevated volume (~106% of 30-day avg.).
  • Commodities – WTI crude oil +0.3% to $57.65/bbl., COMEX gold -0.7% to $1269/oz. despite risk-off session.
  • November non-manufacturing activity expanded (57.4) but fell from October reading (60.1). New orders, business activity, employment indicator all lower. Seasonal impacts (i.e. hurricanes) cited as notable impact on data.

Overnight & This Morning

  • Major U.S. indexes opened lower on the heels of sharp declines in Asia, European weakness.
  • Asia stocks drop with China in focus: weak metals prices, fresh comments from regulators reiterating tougher stance on banks, financial markets. Soft Q3 Australia gross domestic product data also weighed. Shanghai Composite -0.3%, Hang Seng -2.1%, Nikkei -2.0%, ASX 200 -0.4%.
  • Europe lower across the board, though STOXX Europe 600 (-0.1%) ticking up from session lows. Dax (-0.5%) among largest decliners despite surprise pickup in German factory orders.
  • Treasuries higher across the curve. 10-year yield -3 basis points (-0.03%) to 2.33%.
  • Commodities – Oil -1.3% to $56.85/bbl., gold +0.2% to $1267/oz., copper (+1.4%) the lone gainer among industrial metals.
  • Economic calendar has ADP Employment Survey (+190k vs. +196k expected, details below), Bank of Canada interest rate announcement (no change expected).


Macro Notes

  • ADP private payrolls increased 190K in November following an unrevised 235K increase in October, largely in line with the 196K consensus. Release highlighted biggest increase in manufacturing jobs this year. Also highlighted risks surrounding employers’ ability to retain skilled workers with labor market tightening and wages increasing. Added only soft spots are industries disrupted by technology like brick-and-mortar retailers. Report typically a non-event for market with focus on official Bureau of Labor Statistics data out on Friday. Street looking for a 200K increase in November nonfarm payrolls following a 261K gain in October that was below the 310K consensus (hurricane-related rebound was softer than expected). Unemployment rate expected to hold steady at 4.1%, the lowest since 2001. (Source: FactSet)
  • Outlook 2018. 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.


Click Here for our detailed Weekly Economic Calendar


  • MBA Mortgage Applications (Dec 1)
  • ADP Employment Change (Nov)
  • Nonfarm Productivity (Q3)
  • Unit Labor Costs (Q3)
  • Germany: Factory Orders (Oct)
  • Japan: Buying Foreign Bonds (Dec 1)
  • China: Foreign Reserves (Nov)


  • Challenger Job Cuts (Nov)
  • Weekly Jobless Claims (Dec 2)
  • Household Change in Net Worth (Q3)
  • Consumer Credit (Oct)
  • Germany: Industrial Production (Oct)
  • France: Trade Balance (Oct)
  • Italy: Unemployment Rate (Q3)
  • Bank of Italy: Report on Balance Sheet Aggregates
  • Japan: GDP (Q3)
  • Japan: Leading Index (Oct)
  • Japan: Eco Watchers Survey (Nov)
  • China: Trade Balance (Nov)
  • China: Imports & Exports (Nov)


  • Change in Nonfarm, Private & Manufacturing Payrolls (Nov)
  • Unemployment Rate (Nov)
  • Average Hourly Earnings (Nov)
  • Average Weekly Hours (Nov)
  • Labor Force Participation & Underemployment Rates (Nov)
  • Wholesale Inventories (Oct)
  • Wholesale Trade Sales (Oct)
  • Germany: Trade Balance (Oct)
  • Germany: Current Account Balance (Oct)
  • Germany: Imports & Exports (Oct)
  • France: Industrial Production (Oct)
  • UK: Industrial Production (Oct)
  • UK: Trade Balance (Oct)
  • UK: Nat’l Institute of Economic & Social Research GDP Estimate (Nov)
  • BOE: Inflation Next 12 Months
  • China: CPI & PPI (Nov)

Past performance is no guarantee of future results.

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

The opinions voiced in this material are for general information only and are not intended to provide or be construed as providing specific investment advice or recommendations for any individual security. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

Stock investing involves risk including loss of principal.

Investing in foreign and emerging markets securities involves special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.

Because of its narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.

Commodity-linked investments may be more volatile and less liquid than the underlying instruments or measures, and their value may be affected by the performance of the overall commodities baskets as well as weather, disease, and regulatory developments.

Government bonds and Treasury bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value. However, the value of fund shares is not guaranteed and will fluctuate.

Investing in foreign and emerging markets debt securities involves special additional risks. These risks include, but are not limited to, currency risk, geopolitical and regulatory risk, and risk associated with varying settlement standards.

Currency risk is a form of risk that arises from the change in price of one currency against another. Whenever investors or companies have assets or business operations across national borders, they face currency risk if their positions are not hedged.

This research material has been prepared by LPL Financial LLC.

To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial LLC is not an affiliate of and makes no representation with respect to such entity.

Not FDIC/NCUA Insured | Not Bank/Credit Union Guaranteed | May Lose Value | Not Guaranteed by any Government Agency | Not a Bank/Credit Union Deposit

Securities and Advisory services offered through LPL Financial LLC, a Registered Investment Advisor

Tracking # 1-674928