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Weekly Update

Market Summary

U.S. stock indexes finished slightly lower last week, snapping a six-week streak of consecutive gains, amid a lack of any notable directional drivers. Trade negotiations between the U.S. and China continued to garner most of the headlines and attention from market participants as corporate earnings season came to a close and there was a lull in major economic reports. For the week, the S&P 500 lost -0.3%, while the Dow dropped -0.5% and the Nasdaq Composite slipped -0.2%.

In an effort to bridge the gap on key structural trade issues that have hindered progress in the U.S.-China trade negotiations, Chinese officials announced on Sunday that they will work to enhance intellectual property protection in China by raising penalties for infringements of patents and copyrights. The Trump Administration indicated that it would seek further assurances on this issue and on China’s prior commitments to increase purchases of U.S. agricultural goods before traveling to Beijing for the next round of talks toward achieving a “phase one” trade deal.

In addition to trade, significant corporate merger activity has also taken center stage to start the week. Some of the major deals recently announced include the merger of two of the largest online brokerage firms, Charles Schwab and TD Ameritrade, in an all-stock deal worth about $26 billion and the $16.2 billion acquisition of Tiffany & Co. jewelers by luxury goods conglomerate Moët Hennessy-Louis Vuitton (LVMH).

In the holiday-shortened trading week ahead, market participants will get a host of economic updates regarding third quarter GDP growth, the housing market, durable goods orders, and inflation. Additionally, they will keep a close eye on updates about Black Friday shopping, which is a crucial day for retailers and an indicator of the strength of consumer holiday spending.

Economic Highlights

  • Consumer Sentiment: The final report of the University of Michigan Consumer Sentiment survey for November came in better than expected at 96.8 versus the preliminary print of 95.7 and October’s 95.5 reading. Easing financial conditions and de-escalation in trade tensions helped provide a boost to consumer expectations.

  • Employment: Weekly initial jobless claims remained at 227,000 last week, 10,000 above consensus expectations, and have hit the highest four week average (221,000) since June. Market participants will be monitoring this closely to see if weakening business sentiment starts to have a negative impact on the strong employment picture.

US Economy – The Week Ahead

 

Tuesday, 11/26/2019

  • New Home Sales – Consensus Estimate: 709K (1.1% MoM), Prior Month: 701K (-0.7% MoM)
  • S&P/Case-Shiller Home Price Index Year-over-Year Growth – Consensus Estimate: 1.9%, Prior Month: 2.0%

Wednesday, 11/27/2019

  • Durable Goods Orders Month-over-Month Growth (Preliminary) – Consensus Estimate: -0.5%, Prior Month: -1.2%
  • U.S. 3Q 2019 GDP Growth Year-over-Year (Second Preliminary) – Consensus Estimate: 2.0% (1.9% QoQ), Prior Quarter: 2.3% (2.0% QoQ)
  • Personal Consumption Expenditures (PCE) Index Year-over-Year – Consensus Estimate: 1.4%, Prior Month: 1.3%

Thursday, 11/28/2019

  • Markets closed for Thanksgiving Day
  • Initial Jobless Claims – Consensus Estimate: 222,000 (-2.2% WoW), Prior Week: 227,000 (0% WoW)

Friday, 11/29/2019

  • Markets closing early for day after Thanksgiving

  • No data

 

 

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