Telemus Weekly Market Review

November 28 – December 2

U.S. equities finished mostly lower after three weeks of solid gains. The S&P 500 surrendered 0.97% for the week while the NASDAQ Composite continued its recent underperformance, falling 2.65%. It is worth noting that the blue chip Dow Jones Industrial Average +0.1% eked out a slim gain, logging its fourth consecutive weekly advance.

The outperformance of the Dow has been a common theme since the election as market participants piled into stocks of companies that are expected to benefit from increased infrastructure spending. A portion of the gains in growth-sensitive areas has come at the expense of technology stocks, leading to relative weakness in the NASDAQ. In addition, there has been some speculation that the immigration policy of the next administration could make things a bit more difficult for tech employees to obtain U.S. work visas.

The trend of firmer economic data largely continued, underpinning the near certainty of a 25 basis point rate hike at the next Fed meeting. Q3 GDP growth was revised up to 3.2% from 2.9%, the fastest pace in two years. Consumer confidence in November and home prices in September (as measured by the Case-Shiller house price index) both hit post-recession highs. The ISM manufacturing index expanded at the fastest pace in five months in November. In addition, November auto sales beat expectations, hitting a record level for the month. However, analysts expressed concerns about a ramp in incentives to drive sales. The week ended on a somewhat less upbeat note with the mixed takeaways from the November employment report on Friday.

The trading week was highlighted by OPEC securing an official agreement to lower production to 32.5 million barrels per day after months of speculation about the likelihood of an agreement being struck. Crude oil responded by rallying into the area of its 2016 high of almost $52.

With oil returning to its best level of the year, the energy component is now in position to contribute to an uptick in inflation expectations. Those expectations have already seen a notable uptick since the election as participants piled into stocks that should benefit from infrastructure spending. The 10-yr note registered its fourth consecutive weekly loss, driving its yield up to 2.39% after marking a 17-month high at 2.49%. The fed funds futures market remains all but convinced that a rate hike will be announced on December 14.

December 5 – 9 Economic Calendar

  • Monday
  • Gallup U.S. Consumer Spending Measure
    8:30 AM ET
  • William Dudley Speaks
    8:30 AM ET
  • Charles Evans Speaks
    9:11 AM ET
  • PMI Services Index
    9:45 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • Labor Market Conditions Index
    10:00 AM ET
  • James Bullard Speaks
    2:05 PM ET
  • Tuesday
  • International Trade
    8:30 AM ET
  • Productivity and Costs
    8:30 AM ET
  • Redbook
    8:55 AM ET
  • Factory Orders 10:00 AM ET
  • Gallup U.S. ECI
    2:00 PM ET
  • Labor Market Conditions Index
    10:00 AM ET
  • James Bullard Speaks
    2:05 PM ET
  • Wednesday
  • MBA Mortgage Applications
    7:00 AM ET
  • Gallup U.S. Job Creation Index
    8:30 AM ET
  • JOLTS
    10:00 AM ET
  • EIA Petroleum Status Report
    10:30 AM ET
  • Consumer Credit
    3:00 PM ET
  • Labor Market Conditions Index
    10:00 AM ET
  • James Bullard Speaks
    2:05 PM ET
  • Thursday
  • Jobless Claims
    8:30 AM ET
  • Bloomberg Consumer Comfort Index
    9:45 AM ET
  • Quarterly Services Survey
    10:00 AM ET
  • EIA Natural Gas Report
    10:30 AM ET
  • Fed Balance Sheet
    4:30 PM ET
  • Money Supply
    4:30 PM ET
  • James Bullard Speaks
    2:05 PM ET
  • Friday
  • Consumer Sentiment
    10:00 AM ET

  • Wholesale Trade
    10:00 AM ET
  • Baker-Hughes Rig Count
    1:00 PM ET
  • PMI Services Index
    9:45 AM ET
  • ISM Non-Mfg Index
    10:00 AM ET
  • Labor Market Conditions Index
    10:00 AM ET
  • James Bullard Speaks
    2:05 PM ET

PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This market commentary is a matter of opinion and is for informational purposes only.  It is not intended as investment advice and does not address or account for individual investor circumstances.  Investment decisions should always be made based on the client’s specific financial needs, goals and objectives, time horizon and risk tolerance.  The statements contained herein are based solely upon the opinions of Telemus Capital, LLC.  All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.