Stocks had another quiet day, and eked out small gains on the eve of Thanksgiving. But a short trading week meant we got a massive dump of economic data this morning, including stuff that dropped today instead of Friday because markets close early.
First, the scoreboard:
- Dow: 17,836.07, +23.88, (0.13%)
- S&P 500: 2,091.45, +2.31, (0.11%)
- Nasdaq: 5,120.58, +17.77, (0.35%)
And now, Wednesday’s top stories:
- Initial jobless claims fell to 260,000 last week (270,000 forecast). The four-week moving average, which evens out the week-by-week volatility, was unchanged at 271,000, near historic lows. “The decline in initial claims indicates that from the separations side, the job market continues to firm,” wrote Barclays’ Rob Martin to clients.
- Durable goods orders rose more than forecast in October, by 3%, boosted by a jump in aircraft orders. But excluding the volatile transportation component, core durable goods increased 0.5%. Capital-goods orders excluding defence and aircraft rose 1.3%, prompting Pantheon Macroeconomics’ Ian Shepherdson to argue that the hit from oil companies is over. “The trend in core capex orders is now clearly turning higher, following the collapse triggered by the rollover in oil companies’ spending,” he wrote to clients.
- New home sales increased 10.7% at an annual rate of 495,000 in October. This missed economists’ forecast for a rise by 6.8% at an annual rate of 500,000. The median sales price of new houses was $281,500 during the month. “Overall, looking through the month to month volatility, we still see new homes sales consistent with a moderate and sustained recovery in the housing market,” Barclays economists wrote to clients.
- Separately, the Federal Housing Finance Agency (FHFA) released its house price index for September, which showed a 0.8% rise (0.4% expected). This index has shown home-price appreciation every month since December 2013, and the FHFA’s Andrew Leventis noted in the release that affordability is set to become a bigger problem. In the third quarter, house prices rose 1.3%, according to the report.
- Service-sector activity rebounded in November. Markit Economics’ f lash services purchasing manager’s index (PMI) rose to a seven-month high of 56.5 (55 expected). Growth in the service sector slowed to a four month low during the prior month. New-business growth helped the sector, although the outlook for future business activity remained bleak.
- The University of Michigan’s consumer confidence index rose to 91.3 in November from 90 in October, but missed the forecast for 93.1. “The data indicate that consumers have become increasingly aware of economic cross currents in the domestic as well as the global economy,” wrote Richard Curtin, chief economist of the survey. Low-income households were responsible for nearly all of the index’s gain, Curtin said.
- Inflation is still far from the Fed’s target. The latest personal income and outlays report showed that personal consumption expenditures, a reading on inflation, rose 1.3% in October, excluding fluctuating food and energy costs. Income rose 0.4%, while spending increased 0.1%. The personal savings rate rose to 5.6% from 5.3%.
- The US oil rig count fell by 9 to 555 this week, according to driller Baker Hughes. It’s the lowest tally since June 2010. The gas rig count fell by 4, and the combined tally was 744. Oil production remains robust; the Energy Information Administration reported a build in US inventories by 1 million barrels last week to 488.2 million.
- John Deere reported fourth-quarter earnings and sales that topped forecasts, but warned that the farming industry next year would be worse than it was in 2015 amid weakening crop prices. The world’s largest maker of farming equipment lowered its forecasts for key crop prices including wheat and corn, forecast a 7% drop in full-year sales, and a decline in its cash flows from operations.
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