MMRecap
for December 8th
Thanksgiving break is
definitely over. Now it’s time to get serious again, as there were 19
relevant economic reports last week.
Monday’s lone report was the
ISM index, which looks at the health of the manufacturing industry across the
country. It came in at 58.7, which was not only close to estimates but very
close to October’s 59.0. Otherwise, real news was scant. The yield on the 10-year Treasury rose 4 basis points to 2.22%.
Only three reports appeared on
Tuesday’s calendar, and just one could influence the markets -- construction
spending in October. It shot up 1.1%, beating the -0.1% tallied in September,
as well as all estimates. When Treasuries closed, the
yield on the 10-year note had risen 6 basis points to a still-low 2.28%.
Wednesday there were several
releases, but no real market-changers. The yield on the 10-year Treasury went up a point to close at
2.29%.
On Thursday, initial and
continuing jobless claims were released. First-time claims for the week ended
November 29 were down by 17K, registering 297K compared with 314K from the
prior week. Continuing claims recorded for the week ended November 22
actually went up to 2362K, which was a good-sized jump from the 2323K from
the week before.
The other piece of financial
news on Thursday: the European Central Bank is delaying the start of its
quantitative easing program (if it starts at all) until it further studies
the impact of falling oil prices and other economic factors that could affect
European growth and wages. Don’t look for a statement about this until at
least March. The 10-year Treasury yield
dropped 4 points to close at 2.25%.
Friday’s employment reports
for November were an early holiday present for just about everyone. Nonfarm
payrolls added 321K jobs in November, and the unemployment rate held at 5.8%,
the lowest since 2008. Hourly earnings were up 0.4%. The 10-year Treasury yield
closed last week at 2.31%, up 6 basis points from Thursday.
This week is a relatively
quiet one, and market-moving reports don’t start coming in until Thursday.
There are no reports today, and the only significant release coming out
tomorrow is the report on wholesale inventories for October, which are
expected to rise 0.2%. This is not a market mover.
Wednesday, too, is practically
a non-event, but the fun starts Thursday with several reports rolling in. As
always, we get the initial and continuing jobless claims reports. Initial
claims for the week ended December 6 may drop by 2K; the analysts are
predicting this report to come in at 295K. Continuing claims are predicted to
come in at 2350K, about 12,000 less than the 2362K from the previous week.
November retail sales and
retail sales excluding autos are also scheduled for Thursday. Expectations
range from gains of 0.4% to 0.7%, and contain some of the most important data
for November. So far it’s been disappointing, but these numbers could
increase expectations. Retail sales ex-auto could come in anywhere from +0.2%
to +0.5%. Export and import prices in November are also on tap, but they
almost never surprise. Business inventories follow, and they fall in the same
category. If inflation were to edge up a couple of points, you wouldn’t hear
many complaints.
Two reports on producer price
indices at the manufacturing level are due Friday, and many would like to see
them rise just a bit. This is one area where higher prices would be welcomed.
The final report for the week
is the University of Michigan consumer sentiment report, which attempts to
determine the moods of those surveyed. If they feel confident about their
financial futures for the next several months, the numbers will be in the
high 80s or even the low 90s. Anything below that would be a disappointment.
The sentiment for November was 88.8.
So, all in all, nothing very
exciting is expected this week.
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Monday, December 8, 2014
Money Market Recap & Forecast
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