S&P500 -0.77% (3,557.54); NASDAQ +0.22% (11,854.97); DJIA -0.73% (29,263.48)
This week’s reports:
* November’s NY Empire State Manufacturing Index fell to 6.3 from October’s 10.5; it was expected to rise to 13.5.
* October’s Industrial Production rose 1.1% from September’s -0.4%. Capacity Utilization jumped to 72.8% from September’s 72%.
* September’s Business Inventories rose 0.7% from August’s +0.3%.
* November’s Philadelphia Fed Manufacturing Index declined to 26.3 from October’s 32.3; it was expected to tumble to 22.0.
* November’s Kansas Fed Manufacturing Activity Index fell to 20 from October’s 23.
* October’s Retail Sales rose 0.3% from September’s +1.6%. Retail Sales ex Autos rose 0.2% from September’s +1.2%.
* November’s NAHB Housing Market Index rose to 90 from October’s 85; it was expected to remain unchanged.
* October’s Housing Starts rose 4.9% from September’s +6.3%. Building Permits remained unchanged from October’s +4.7%.
* October’s Existing Home Sales rose 4.3% from September’s +9.9%; they were expected to decline by 1.2%.
* Initial Jobless Claims for the week ending November 14th rose by 31K to 742K, versus the expected decrease to 707K. Continuing Jobless Claims for the week ending November 7th fell by 429K to 6.372M versus the expectations of a decline to 6.47M. The advance seasonally adjusted insured unemployment rate was 4.3%, a decrease of 0.3% from the previous week’s rate.
- Positive news on COVID-19 vaccines boosted global equities for the second week in a row. The wave of hopeful news sent several stock benchmarks – including the S&P 500, the Dow Jones Industrial Average and the MSCI All-Country World Index – to all-time highs.
- However, the S&P 500 and the Dow retreated to end the week lower, as tightening restrictions in many areas (to stem the rapid spread of the virus) weighed on sentiment. This was also worsened by some signs that the economy is losing momentum and a disagreement between the Treasury and the Federal Reserve over releasing funds aimed at supporting the economy. The Nasdaq Composite Index managed to close the turbulent week with a small gain.
- Treasury Secretary Steven Mnuchin said he would allow several emergency Federal Reserve lending programs to expire, opening a divide with the central bank, which had pressed for an extension. As a result, on Dec. 31 several novel Fed programs that have backed corporate credit and municipal-borrowing markets and that have provided loans to small and midsize businesses and nonprofits during the coronavirus pandemic will end. Mr. Mnuchin said that the programs “have clearly achieved their objectives” as credit markets returned to health and banks have sufficient lending capacity.