CONSUMERS ACT ON THEIR CONFIDENCE

A new factoid points out just how well the economy is doing: the federal government just upgraded its estimate of third-quarter growth to 3.3%. New data on consumer spending and confidence hints at fourth-quarter strength. Personal spending improved 0.3% in October following the 0.9% leap in September, and household wages were up 0.4% in October for a second straight month. At a mark of 129.5, the Conference Board’s consumer confidence index reached a YTD peak in November, having soared 9.1 points in two months.^1,2

TWO VERY POSITIVE HOUSING SIGNALS

New homes are selling strongly. October saw a 6.2% advance for new home buying according to the Commerce Department, with sales up 30% in the Northeast; the annualized rate of new home purchases was the best in a decade. In addition, the National Association of Realtors announced a 3.5% gain in its pending home sales index for October, a turnaround from the 0.4% September decline.^1,3   

MANUFACTURING SECTOR MAINTAINS A HECTIC PACE

The Institute for Supply Management’s October factory sector purchasing manager index came in at 58.2 last week – a sign of significant expansion. That was half a point below its September reading, but still far above the 50.0 dividing line between sector growth and contraction.⁴   

MORE UPS THAN DOWNS ON WALL STREET

News from the nation’s capital affected equity index performance more than anything else as November ebbed into December. When the closing bell called an end to a rollercoaster trading day on Friday, the weekly numbers looked better for the Dow Jones Industrial Average (+2.86% to 24,231.59) and S&P 500 (+1.53% to 2,642.22) than for the Nasdaq Composite (-0.60% to 6,847.59). The CBOE VIX volatility index climbed 18.20% for the week to 11.43.⁵

THIS WEEK:

Monday, no major economic news items are scheduled. On Tuesday, a new ISM service sector PMI arrives, plus earnings from AutoZone, Bank of Montreal, Land’s End, and Toll Brothers. Wednesday, ADP issues its November payrolls report; investors also review earnings from American Eagle Outfitters, Analogic, H&R Block, Broadcom, Fred’s, Hudson’s Bay Co., and Lululemon Athletica. Thursday offers the latest Challenger job-cut report, a new weekly initial claims report, and earnings from Dell Technologies, Dollar General, and Toro. Wall Street considers the Department of Labor’s November employment report Friday along with the initial University of Michigan consumer sentiment index for December.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG

DJIA +22.61 +26.26 +17.21 +8.12

NASDAQ +27.20 +30.40 +25.50 +15.73

S&P 500 +18.02 +20.59 +17.31 +7.84

REAL YIELD 12/1 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO

10 YR TIPS 0.51% 0.48% -0.79% 1.63%

Sources: wsj.com, bigcharts.com, treasury.gov - 12/1/17^5,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 - marketwatch.com/economy-politics/calendars/economic [12/1/17]

2 - bloomberg.com/quote/CONCCONF:IND [12/1/17]

3 - thestreet.com/story/14403381/1/with-real-sector-booming-what-housing-sector-stocks-will-pop-.html [11/27/17]

4 - instituteforsupplymanagement.org/ismreport/mfgrob.cfm?SSO=1 [12/1/17]

5 - markets.wsj.com/us [12/1/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F1%2F16&x=0&y=0 [12/1/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F1%2F16&x=0&y=0 [12/1/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F1%2F16&x=0&y=0 [12/1/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F30%2F12&x=0&y=0 [12/1/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F30%2F12&x=0&y=0 [12/1/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F30%2F12&x=0&y=0 [12/1/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F30%2F07&x=0&y=0 [12/1/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F30%2F07&x=0&y=0 [12/1/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F30%2F07&x=0&y=0 [12/1/17]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/1/17]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/1/17]