Telemus Weekly Market Review November 25th - November 29th, 2019

November 25 - November 29 Week in Review

The major averages ended the Thanksgiving week with solid gains across the board despite the shortened holiday session. The S&P 500 gained 1%, the Dow Jones Industrial Average 0.6% and the Nasdaq 1.7% for the week. The strong showing lifted the Dow, Nasdaq, and S&P 500 to fresh record highs – their 26th of the year – while the Russell 2000 climbed to its best level since October 2018.

Ten out of eleven sectors ended last week with gains, and five out of ten gained 1.0% or more. The consumer discretionary sector was the top performer, rising 1.8%. The group finished in the lead even though Telsey Advisory Group cautioned that store traffic on Thursday and Friday was likely down a touch when compared to last year’s holiday season.

The energy sector, down 1.6%, was the only notable decliner last week as the price of crude oil slid back below its 50-day moving average.

Trade related headlines continued pouring in during the early portion of the week, but once again, they did not introduce anything new or material into the discussion. More notably, President Trump signed the Hong Kong Human Rights and Democracy Act on Wednesday evening, prompting some angry responses, but nothing more than that, from Chinese officials including President Xi.

Fresh data last week showed the U.S. economy remains on sound footing with a decrease in the number of people applying for first-time unemployment benefits and a rise in October personal spending, the eighth straight monthly increase, signaling consumers remain in fairly healthy shape heading into the all-important Christmas holiday shopping season.

Global economic data on the other hand continued painting a gloomy picture. China reported its industrial profits decreased at the sharpest rate in eight years in October and South Korea and Japan reported falling industrial production in October as well.

Europe is by far the biggest victim of the trade dispute between the U.S. and China. Trade figures released last week by the Organization for Economic Cooperation and Development (OECD) help explain why Europe will barely grow this year. Global exports shrank by 0.7% in the third quarter of the year, the OECD said. But the fall was steeper for the European Union, whose exports contracted by 1.8%. Exports from China and the U.S. declined by 1.6% and 0.2%, respectively.

On the interest rate front U.S. Treasury yields were relatively flat for the week. The 2 year Treasury yield ended Friday at 1.60% and the 10 year Treasury closed at 1.78%.

In other markets the U.S. Dollar index closed at 98.27 and WTI crude closed at $55.42 a barrel as supply concerns weighed on the market.

December 2 – December 6 Economic Calendar