Weekly Market Commentary Update As of November 28th, 2014 The Economy - U.S. household incomes continued to gain, while housing sector news was mixed. Overseas, U.K. retail activity eased but stayed in healthy territory. Eurozone unemployment remained elevated, while low consumer price inflation persisted. SEI anticipates ongoing progress in North America and the U.K., while the eurozone and key emerging markets continue to struggle. Third-quarter U.S. economic growth was unexpectedly revised upward to a 3.9% annualized rate. While improved, the estimate was still slower than the second quarter’s pace of growth. Durable goods orders gained 0.4% in October, reversing the prior month’s fall. The core figure, which excludes volatile transportation orders, disappointed with a 0.9% drop. Personal incomes rose 0.2% during October, in line with September’s gain. Consumer spending also increased 0.2%, following a decline a month earlier. Initial jobless claims jumped to 313,000 for the week ending November 22. Ongoing unemployment claims, reflecting delayed data, continued to fall during the week of November 15. New-home sales increased 0.7% during October, less than expected, although the median sales price rose to record levels. Pending homes sales declined 1.1%, more than offsetting September’s increase. Home prices moved an expected 0.3% higher in September, according to the Case-Shiller Home Price Index, following a decline in August. The Federal Housing Finance Agency reported no price change from August to September. Consumer confidence remained elevated in November, according to the Conference Board, albeit at a lower level than October’s multi-year-high. Consumer sentiment regarding current conditions strengthened during the month, the University of Michigan reported. The U.K. economy grew 0.7% in the third quarter and 3.0% in the year over year. Both the quarterly and yearly rates declined from their second-quarter levels. U.K. retailers and distributors reported strong sales in November relative to long-term levels, although the near-term trend continued to soften. Eurozone consumer prices rose in November from a year earlier, but by less than the previous month’s one-year gain. Excluding food and energy, prices increased at a higher pace than the headline figure. The eurozone unemployment rate remained at 11.5% during October. Germany and Spain slightly improved, while France held steady and Italy worsened. The Bank of Japan’s policy board was almost evenly split over the central bank’s recently expanded monetary easing measures. Economic Calendar - December 1: ISM Manufacturing December 2: Auto Sales, Construction Spending December 3: Productivity and Costs December 4: Jobless Claims December 5: Employment Situation Stocks - Global equity markets rose for the week. In the U.S., sectors were mixed. Consumer discretionary and information technology led, while energy and industrials lagged. Growth stocks beat value stocks and large-company stocks led small-company stocks. Bonds - Global bond markets rose for the week. Global government bonds outperformed, followed by corporate bonds. High-yield bonds lagged. U.S. Treasury yields fell this week, ahead of the Federal Reserve’s December 3 Beige Book report on economic conditions.
Posted on: Mon, 01 Dec 2014 15:06:57 +0000
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