November 27th – Weekly Update

  • U.S. equity markets bumped up in a strong global environment fueled by supportive bank policies and steady earnings growth. Oil finished lower after hitting a two-year high and gold rose. The U.S. Treasury yield closed at approximately 2.35%.
  • The S&P 500 hit an all-time record high breaking through the $2,600 ceiling on improving corporate earnings, a strong opening to Black Friday holiday sales and positive expectations for this week’s November global PMI data.
  • Debate around whether the market may be near a top and the GOP’s tax overhaul push was widely covered during the week with none of the reports breaking any new ground. There was little incremental development on the tax-reform front considering the holiday recess. The Senate Finance Committee released the text of its tax bill, with some observers highlighting concerns about the fast pace of the process.
  • On the geopolitical front: Robert Mugabe, Zimbabwe’s president for the past 37 years, resigned after recent pressure from the military and amid widespread popular protest; Lebanon’s Saad al-Hariri, who unexpectedly resigned as Prime Minister while in Saudi Arabia, met with Egypt’s President al-Sisi; and President Trump and Russian President Putin spoke on the telephone to reportedly discus international hotspots.
  • The start of the holiday shopping season grabbed a lot of attention with some upbeat initial takeaways. The bulk of the focus in the press is on the continued shift to online spending with an annual Black Friday online spending increase of around 18%, year to year.
  • October existing-home sales came in at a 5.48M seasonally adjusted annual rate (SAAR), better than consensus for 5.43M and ahead of September’s upwardly revised 5.39M pace (was 5.37M). Sales were at their strongest pace since June, but were down 0.9% year over year for their second consecutive 12-month decline. The release attributed this to ongoing supply shortages, limiting choices for prospective buyers and keeping price growth elevated.

CPWM Weekly Market Monitor (2017.11.27)