It took two years but the S&P 500 made new closing all-time highs. The S&P added 1.25% on Friday, closing at 4839, higher than its Jan 2022 close. The Dow Jones also closed at new highs but the Nasdaq composite and Russell 2000 still have a ways to go.
US equities were mostly higher for the holiday-shortened week, with the Dow, S&P, and Nasdaq gaining but small-caps continuing to struggle in 2024 (Russell now down four consecutive weeks). The S&P on Friday set a new all-time closing high near 4840. Market leadership was narrow with tech driving the upside; the equal-weight S&P logged a weekly decline.
Magnificent Seven names were mostly higher, with NVDA the standout amid continued AI optimism. Semis and semicaps were broadly stronger, with other outperformers including P&C insurance, software, networking/communication, restaurants, hotels, and payments. Some of the laggards were autos, drug stores, utilities, energy, REITs, credit cards, and paper/packaging. The managed care space was largely lower after a warning by Humana.
Treasuries were weaker with a bit of curve flattening; the 10Y yield pushed back well above 4%. The dollar was higher after a flat performance in the prior week, with the greenback having strong performance on the yen cross. Gold was down 1.1%, continuing its difficult start to the year. Oil was somewhat higher, with WTI crude settling up 0.8% after dropping in the prior week’s trading.
The week’s big theme was the waning of expectations for the Fed to begin its rate cuts in March in the face of both stronger economic data and some pushback in the Fedspeak. December retail sales came in stronger than forecast (particularly for control-group sales), highlighting continued consumer strength despite pressures from inflation, rates, and the Q4 resumption of student-loan repayments.
There was also a big jump in January NAHB homebuilder sentiment and a stronger report for December housing starts. Friday also saw a broad improvement in UMich consumer sentiment alongside a further drop in year-ahead inflation expectations. There was, however, some offset from continued weakness in manufacturing indicators, with January’s NY Fed’s Empire survey hitting one of its lowest levels in series history.
On the Fed front, Governor Waller said there is no reason to move as quickly or cut as rapidly as in the past. Atlanta Fed President Bostic argued that progress on disinflation could stall if rate cuts came too soon, and continued to voice his thoughts that cuts are not likely to begin until Q3. These comments (among the last before the Fed enters its blackout period ahead of the 30-31 January FOMC meeting) combined with data supportive of robust economic growth sparked a shift in market pricing about a first Fed cut, with futures now pointing to 50-50 expectations for a March cut (vs ~77% just last week). This drove some market weakness, particularly on Tuesday and Wednesday.
However, the week also saw a big positive performance contribution from tech amid some positive earnings takeaways and ongoing AI optimism:
TSM +12.8% posted better-than-expected net profit and projected 20%+ sales growth driven by AI demand.
SMCI +24.7% positively preannounced, citing strong market and end customer demand for rack-scale, AI, and Total IT Solutions.
NVDA +8.7% had the best weekly performance within the Magnificent Seven
Friday reporting noted that META +2.4% was spending billions on its chips for its artificial general intelligence efforts.
AAPL +3.0% had a good week, helped by a BofA upgrade highlighting the potential for GenAI features to spark a stronger upgrade cycle.
Overall, there were multiple bullish themes threaded into the week’s narrative, including continued expectation of Fed easing (whenever it may begin), more talk about QT tapering, ongoing disinflationary traction, labor-market strength, robust consumer spending, robust consumer sentiment, AI optimism, a lower bar into Q4 earnings, and the expected return of a buyback tailwind once earnings blackout periods end.
These had the better of the argument in this week’s trading, but there was still a lot of attention on the repricing of Fed rate-cut odds (driving tighter financial conditions), narrow market leadership, regulatory concerns against an otherwise improving M&A backdrop, stretched positive sentiment, weaker China growth prospects, and still-unsettled geopolitical considerations.
Next week will see the continuing ramp in Q4 earnings, with 75 S&P constituents on the calendar. Among the big names will be TSLA (post-close Wednesday), JNJ, PG, NFLX, INTC, ABT, TMUS, CMCSA, VZ, TXN, AXP, and T. The market will process $162B in Treasury auctions, with $60B of 2s on Tuesday, $61B of 5s on Wednesday, and $41B of 7s on Thursday.
The economic calendar is loaded toward the back half of the week with durable goods, new home sales, and the first read of Q4 GDP on Thursday; Friday will see December PCE data. There will be no Fedspeak with the bank in its blackout period ahead of the 30-31 January FOMC meeting.
The Baker Hughes rig count was up 1 this week. There are 620 oil and gas rigs operating in the US – Down 151 from last year.
Metals Complex
Employment Picture
Weekly Unemployment Claims – Released Thursday 1/18/2024 – In the week ending January 13, the advance figure for seasonally adjusted initial claims was 187,000 a decrease of 16,000 from the previous week’s revised level. The 4-week moving average was 203,250 a decrease of 4,750 from the previous week’s revised average.
December Jobs Report – BLS Summary – Released 1/5/2024 – The US economy added 216k nonfarm jobs in December and the Unemployment rate was unchanged at 3.7%. Average hourly earnings increased 15 cents to $34.27. Hiring highlights include +38k Healthcare, +52k Government,+21k Social Assistance, and +17k Construction.
Average hourly earnings increased 15 cents/0.4% to $34.27.
U3 unemployment rate was unchanged at 3.7%. U6 unemployment rate increased 0.1% to 7.1%.
The labor force participation rate decreased 0.3% to 62.5%.
Average work week decreased 0.1 to 34.3 hours.
Job Openings & Labor Turnover Survey – JOLTS – Released 1/3/2024 – The number of job openings changed little at 8.8 million on the last business day of November, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations decreased to 5.5 million and 5.3 million, respectively. Within separations, quits (3.5 million) and discharges (1.5 million) changed little.
Employment Cost Index– Released 10/31/2023 –Compensation costs for civilian workers increased 1.1% for the 3-month period ending in September 2023. The 12-month period ending in September 2023 saw compensation costs increase by 4.3. The 12-month period ending September 2022 increased 5.0%. Wages and salaries increased 4.6 percent over the 12-month September 2023 and increased 5.1 percent for the 12-month period ending in September 2022. Benefit costs increased 4.1 percent over the 12-month period ending September 2023 and increased 4.9 percent for the 12-month period ending in September 2022. This report is published quarterly.
This Week’s Economic Data
Existing Home Sales – Released 1/19/2024 – The Existing home sales decreased in December following an increase in November which followed five consecutive months of declines. Existing home sales in December decreased 1.0% from November and fell 6.2% year over year. Existing home sales decreased to 3.78 million in December seasonally adjusted. The median price of exiting homes for sale increased to a record high of $389,800.
Housing Starts– Released 1/18/2024 –December housing starts came in at 1,460,000, 4.3% below the November estimate but is 7.6% above the December 2022 rate. Building permits were 1.9% above the November rate at $1,495,000 and 6.1% above the December 2022 rate.
Industrial Production and Capacity Utilization – Released 1/17/2024 – Industrial production increased 0.1% in December and declined 3.1% in the fourth quarter. Manufacturing increased 0.1%. Utilities output decreased 1.0%. Mining increased 0.9%. Capacity utilization was unchanged in December, a rate that is 1.1 percent below its long-run average.
Retail Sales – Released 1/17/2024 – Headline retail sales increased 0.6% in December and are up 5.6% above December 2022.
Recent Economic Data
Producer Price Index – Released 1/12/2024 – The Producer Price Index for final demand declined 0.1 percent in December, seasonally adjusted. Final demand decreased 0.1 percent in November. On an unadjusted basis, the index for final demand moved up 1.0 percent for the 12 months ended in December.
Consumer Price Index– Released 1/11/2024 – The Consumer Price Index for All Urban Consumers increased 0.3 percent in December on a seasonally adjusted basis, after increasing 0.1 percent in November. Over the last 12 months, the all items index increased 3.4 percent before seasonal adjustment.
U.S. Trade Balance – Released 1/9/2024 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $63.2 billion in November, down $1.3 billion from $64.5 billion in October. November exports were $253.7 billion, $4.8 billion less than October exports. November imports were $316.9 billion, $6.1 billion less than October imports. The November decrease in the goods and services deficit reflected an decrease in the goods deficit of $0.6 billion to $89.4 billion and an increase in the services surplus of $0.7 billion to $26.2 billion.
Consumer Credit – Released 1/8/2024 – Consumer credit increased at a seasonally adjusted annual rate of 5.7 percent in November. Revolving credit increased at an annual rate of 17.7 percent, while nonrevolving credit increased at an annual rate of 1.5 percent.
PMI Non-Manufacturing Index – Released 1/5/2024 – Economic activity in the services sector expanded in December for the twelfth consecutive month as the Services PMI® registered 50.6 percent, 2.1 percentage points lower than November’s reading of 52.7 percent.
U.S. Construction Spending – Released 1/2/2024 – Construction spending during November 2023 was estimated at a seasonally adjusted annual rate of $2,050.1 billion, 0.4 percent above the revised October estimate of $2,042.5 billion. The November figure is 11.3 percent above the November 2022 estimate of $1,842.2 billion.
PMI Manufacturing Index– Released 1/2/2024 – The December Manufacturing PMI registered 47.4 percent, up 0.7 percent from November. Regarding the overall economy, it continued in contraction for a third month after one month of weak expansion preceded by nine months of contraction The New Orders Index remained in contraction territory at 47.1 percent, 1.2 percentage points lower than the figure of 48.3 percent recorded in November. The Production Index reading of 50.3 percent is a 1.8-percentage point increase compared to November’s figure of 48.5 percent.
Chicago PMI – Released 12/29/2023 – Chicago PMI moved back into contraction territory in December after expanding in November decreasing to 46.9 points down from 55.8 points in November. The contraction follows one month of expansion and follows 14 consecutive months of contraction in business activity in the Chicago region.
US Light Vehicle Sales – Released 12/29/2023 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.319 million units in November.
Personal Income – Released 12/22/2023 – Personal income increased $81.6 billion (0.4 percent at a monthly rate) in November. Disposable personal income (DPI) increased $71.9 billion (0.4 percent). Personal consumption expenditures (PCE) increased $46.7 billion (0.2 percent).
New Residential Sales – Released 12/22/2023 – Sales of new single‐family houses in November 2023 were at a seasonally adjusted annual rate of 590,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.2 percent below the revised October rate of 672,000 but is 1.4 percent above the November 2022 estimate of 582,000. The median sales price of new houses sold in November 2023 was $434,700. The average sales price was $488,900. At the end of November, the seasonally adjusted estimate of new homes for sale was 451,000, a supply of 9.2 months at the current sales rate.
Durable Goods – Released 12/22/2023 – New orders for manufactured durable goods in November, up two of the last three months, increased $15.1 billion or 5.4 percent to $295.4 billion, the U.S. Census Bureau announced today. This followed a 5.1 percent October decrease. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders increased 6.5 percent. Transportation equipment, also up two of the last three months, drove the increase, $14.3 billion or 15.3 percent to $107.8 billion.
Third Estimate of 3rd Quarter 2023 GDP – Released 12/21/2023 – Real gross domestic product (GDP) increased at an annual rate of 4.9 percent in the third quarter of 2023, according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.1 percent. The GDP in the “third” estimate is based on more complete source data than were available for the “second” and “advance” estimates. In the second estimate, the increase in real GDP was 5.2 percent. The update primarily reflected a downward revision to consumer spending. Imports, which are a subtraction in the calculation of GDP, were revised down. The increase in real GDP reflected increases in consumer spending, private inventory investment, exports, state and local government spending, federal government spending, residential fixed investment, and nonresidential fixed investment. Imports increased.
Consumer Confidence– Released 12/20/2023 – Consumer Confidence increased in December, up to 110.7 from 101.0 in November. Expectations increased from 77.4 to 85.6. The Expectations index increase reflects optimism in line with levels last seen in July.
Next week we get data on the Advance Estimate of 4th Quarter 2023 GDP, Durable Goods, New Residential Sales, and Personal Income.
Disclaimer
This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any stock, bond, currency or CFD contract.
Some information contained herein has been obtained from third party sources believed to be reliable, but has not been independently verified by us; its accuracy or completeness is not guaranteed. Our commentary is based on information considered to be reliable, but no representation is made that it is accurate or complete, and should not be relied upon as such.
The views expressed represent the opinions and beliefs at the time of this commentary and are not meant as a market forecast. These views are subject to change at any time based on market or other conditions and Good Life Advisors disclaims any responsibility to update such views. This information may not be relied on as advice or as an indication of trading intent on behalf of any portfolio. Portfolio investments may change at any time.
Economic and performance information referenced is historical and past performance does not guarantee future results. References to future returns are not promises or estimates of actual returns we may achieve, and should not be relied upon.
No investment strategy or risk management process can guarantee returns or eliminate risk in any market environment. Investing in securities involves risk of loss. Stock and Bond prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future.
While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Weekly Market Update | Week 3, 2024
Key Takeaways
It took two years but the S&P 500 made new closing all-time highs. The S&P added 1.25% on Friday, closing at 4839, higher than its Jan 2022 close. The Dow Jones also closed at new highs but the Nasdaq composite and Russell 2000 still have a ways to go.
US equities were mostly higher for the holiday-shortened week, with the Dow, S&P, and Nasdaq gaining but small-caps continuing to struggle in 2024 (Russell now down four consecutive weeks). The S&P on Friday set a new all-time closing high near 4840. Market leadership was narrow with tech driving the upside; the equal-weight S&P logged a weekly decline.
Magnificent Seven names were mostly higher, with NVDA the standout amid continued AI optimism. Semis and semicaps were broadly stronger, with other outperformers including P&C insurance, software, networking/communication, restaurants, hotels, and payments. Some of the laggards were autos, drug stores, utilities, energy, REITs, credit cards, and paper/packaging. The managed care space was largely lower after a warning by Humana.
Treasuries were weaker with a bit of curve flattening; the 10Y yield pushed back well above 4%. The dollar was higher after a flat performance in the prior week, with the greenback having strong performance on the yen cross. Gold was down 1.1%, continuing its difficult start to the year. Oil was somewhat higher, with WTI crude settling up 0.8% after dropping in the prior week’s trading.
The week’s big theme was the waning of expectations for the Fed to begin its rate cuts in March in the face of both stronger economic data and some pushback in the Fedspeak. December retail sales came in stronger than forecast (particularly for control-group sales), highlighting continued consumer strength despite pressures from inflation, rates, and the Q4 resumption of student-loan repayments.
There was also a big jump in January NAHB homebuilder sentiment and a stronger report for December housing starts. Friday also saw a broad improvement in UMich consumer sentiment alongside a further drop in year-ahead inflation expectations. There was, however, some offset from continued weakness in manufacturing indicators, with January’s NY Fed’s Empire survey hitting one of its lowest levels in series history.
On the Fed front, Governor Waller said there is no reason to move as quickly or cut as rapidly as in the past. Atlanta Fed President Bostic argued that progress on disinflation could stall if rate cuts came too soon, and continued to voice his thoughts that cuts are not likely to begin until Q3. These comments (among the last before the Fed enters its blackout period ahead of the 30-31 January FOMC meeting) combined with data supportive of robust economic growth sparked a shift in market pricing about a first Fed cut, with futures now pointing to 50-50 expectations for a March cut (vs ~77% just last week). This drove some market weakness, particularly on Tuesday and Wednesday.
However, the week also saw a big positive performance contribution from tech amid some positive earnings takeaways and ongoing AI optimism:
Overall, there were multiple bullish themes threaded into the week’s narrative, including continued expectation of Fed easing (whenever it may begin), more talk about QT tapering, ongoing disinflationary traction, labor-market strength, robust consumer spending, robust consumer sentiment, AI optimism, a lower bar into Q4 earnings, and the expected return of a buyback tailwind once earnings blackout periods end.
These had the better of the argument in this week’s trading, but there was still a lot of attention on the repricing of Fed rate-cut odds (driving tighter financial conditions), narrow market leadership, regulatory concerns against an otherwise improving M&A backdrop, stretched positive sentiment, weaker China growth prospects, and still-unsettled geopolitical considerations.
Next week will see the continuing ramp in Q4 earnings, with 75 S&P constituents on the calendar. Among the big names will be TSLA (post-close Wednesday), JNJ, PG, NFLX, INTC, ABT, TMUS, CMCSA, VZ, TXN, AXP, and T. The market will process $162B in Treasury auctions, with $60B of 2s on Tuesday, $61B of 5s on Wednesday, and $41B of 7s on Thursday.
The economic calendar is loaded toward the back half of the week with durable goods, new home sales, and the first read of Q4 GDP on Thursday; Friday will see December PCE data. There will be no Fedspeak with the bank in its blackout period ahead of the 30-31 January FOMC meeting.
Fixed Income
Yield Curve
Dec FOMC Statement September Fed Minutes Balance Sheet Reduction Plan Credit, Liquidity and Balance Sheet Federal Reserve Dot Plots
Treasury.gov yields FOMC Policy Normalization Statement Longer- Run Goals Jan 2022
Foreign Exchange Market
Energy Complex
The Baker Hughes rig count was up 1 this week. There are 620 oil and gas rigs operating in the US – Down 151 from last year.
Metals Complex
Employment Picture
Weekly Unemployment Claims – Released Thursday 1/18/2024 – In the week ending January 13, the advance figure for seasonally adjusted initial claims was 187,000 a decrease of 16,000 from the previous week’s revised level. The 4-week moving average was 203,250 a decrease of 4,750 from the previous week’s revised average.
December Jobs Report – BLS Summary – Released 1/5/2024 – The US economy added 216k nonfarm jobs in December and the Unemployment rate was unchanged at 3.7%. Average hourly earnings increased 15 cents to $34.27. Hiring highlights include +38k Healthcare, +52k Government,+21k Social Assistance, and +17k Construction.
Job Openings & Labor Turnover Survey – JOLTS – Released 1/3/2024 – The number of job openings changed little at 8.8 million on the last business day of November, the U.S. Bureau of Labor Statistics reported. Over the month the number of hires and total separations decreased to 5.5 million and 5.3 million, respectively. Within separations, quits (3.5 million) and discharges (1.5 million) changed little.
Employment Cost Index – Released 10/31/2023 – Compensation costs for civilian workers increased 1.1% for the 3-month period ending in September 2023. The 12-month period ending in September 2023 saw compensation costs increase by 4.3. The 12-month period ending September 2022 increased 5.0%. Wages and salaries increased 4.6 percent over the 12-month September 2023 and increased 5.1 percent for the 12-month period ending in September 2022. Benefit costs increased 4.1 percent over the 12-month period ending September 2023 and increased 4.9 percent for the 12-month period ending in September 2022. This report is published quarterly.
This Week’s Economic Data
Existing Home Sales – Released 1/19/2024 – The Existing home sales decreased in December following an increase in November which followed five consecutive months of declines. Existing home sales in December decreased 1.0% from November and fell 6.2% year over year. Existing home sales decreased to 3.78 million in December seasonally adjusted. The median price of exiting homes for sale increased to a record high of $389,800.
Housing Starts – Released 1/18/2024 – December housing starts came in at 1,460,000, 4.3% below the November estimate but is 7.6% above the December 2022 rate. Building permits were 1.9% above the November rate at $1,495,000 and 6.1% above the December 2022 rate.
Industrial Production and Capacity Utilization – Released 1/17/2024 – Industrial production increased 0.1% in December and declined 3.1% in the fourth quarter. Manufacturing increased 0.1%. Utilities output decreased 1.0%. Mining increased 0.9%. Capacity utilization was unchanged in December, a rate that is 1.1 percent below its long-run average.
Retail Sales – Released 1/17/2024 – Headline retail sales increased 0.6% in December and are up 5.6% above December 2022.
Recent Economic Data
Producer Price Index – Released 1/12/2024 – The Producer Price Index for final demand declined 0.1 percent in December, seasonally adjusted. Final demand decreased 0.1 percent in November. On an unadjusted basis, the index for final demand moved up 1.0 percent for the 12 months ended in December.
Consumer Price Index – Released 1/11/2024 – The Consumer Price Index for All Urban Consumers increased 0.3 percent in December on a seasonally adjusted basis, after increasing 0.1 percent in November. Over the last 12 months, the all items index increased 3.4 percent before seasonal adjustment.
U.S. Trade Balance – Released 1/9/2024 – The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced that the goods and services deficit was $63.2 billion in November, down $1.3 billion from $64.5 billion in October. November exports were $253.7 billion, $4.8 billion less than October exports. November imports were $316.9 billion, $6.1 billion less than October imports. The November decrease in the goods and services deficit reflected an decrease in the goods deficit of $0.6 billion to $89.4 billion and an increase in the services surplus of $0.7 billion to $26.2 billion.
Consumer Credit – Released 1/8/2024 – Consumer credit increased at a seasonally adjusted annual rate of 5.7 percent in November. Revolving credit increased at an annual rate of 17.7 percent, while nonrevolving credit increased at an annual rate of 1.5 percent.
PMI Non-Manufacturing Index – Released 1/5/2024 – Economic activity in the services sector expanded in December for the twelfth consecutive month as the Services PMI® registered 50.6 percent, 2.1 percentage points lower than November’s reading of 52.7 percent.
U.S. Construction Spending – Released 1/2/2024 – Construction spending during November 2023 was estimated at a seasonally adjusted annual rate of $2,050.1 billion, 0.4 percent above the revised October estimate of $2,042.5 billion. The November figure is 11.3 percent above the November 2022 estimate of $1,842.2 billion.
PMI Manufacturing Index – Released 1/2/2024 – The December Manufacturing PMI registered 47.4 percent, up 0.7 percent from November. Regarding the overall economy, it continued in contraction for a third month after one month of weak expansion preceded by nine months of contraction The New Orders Index remained in contraction territory at 47.1 percent, 1.2 percentage points lower than the figure of 48.3 percent recorded in November. The Production Index reading of 50.3 percent is a 1.8-percentage point increase compared to November’s figure of 48.5 percent.
Chicago PMI – Released 12/29/2023 – Chicago PMI moved back into contraction territory in December after expanding in November decreasing to 46.9 points down from 55.8 points in November. The contraction follows one month of expansion and follows 14 consecutive months of contraction in business activity in the Chicago region.
US Light Vehicle Sales – Released 12/29/2023 – U.S. light vehicle sales were at a seasonally adjusted annual rate (SAAR) of 15.319 million units in November.
Personal Income – Released 12/22/2023 – Personal income increased $81.6 billion (0.4 percent at a monthly rate) in November. Disposable personal income (DPI) increased $71.9 billion (0.4 percent). Personal consumption expenditures (PCE) increased $46.7 billion (0.2 percent).
New Residential Sales – Released 12/22/2023 – Sales of new single‐family houses in November 2023 were at a seasonally adjusted annual rate of 590,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 12.2 percent below the revised October rate of 672,000 but is 1.4 percent above the November 2022 estimate of 582,000. The median sales price of new houses sold in November 2023 was $434,700. The average sales price was $488,900. At the end of November, the seasonally adjusted estimate of new homes for sale was 451,000, a supply of 9.2 months at the current sales rate.
Durable Goods – Released 12/22/2023 – New orders for manufactured durable goods in November, up two of the last three months, increased $15.1 billion or 5.4 percent to $295.4 billion, the U.S. Census Bureau announced today. This followed a 5.1 percent October decrease. Excluding transportation, new orders increased 0.5 percent. Excluding defense, new orders increased 6.5 percent. Transportation equipment, also up two of the last three months, drove the increase, $14.3 billion or 15.3 percent to $107.8 billion.
Third Estimate of 3rd Quarter 2023 GDP – Released 12/21/2023 – Real gross domestic product (GDP) increased at an annual rate of 4.9 percent in the third quarter of 2023, according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.1 percent. The GDP in the “third” estimate is based on more complete source data than were available for the “second” and “advance” estimates. In the second estimate, the increase in real GDP was 5.2 percent. The update primarily reflected a downward revision to consumer spending. Imports, which are a subtraction in the calculation of GDP, were revised down. The increase in real GDP reflected increases in consumer spending, private inventory investment, exports, state and local government spending, federal government spending, residential fixed investment, and nonresidential fixed investment. Imports increased.
Consumer Confidence– Released 12/20/2023 – Consumer Confidence increased in December, up to 110.7 from 101.0 in November. Expectations increased from 77.4 to 85.6. The Expectations index increase reflects optimism in line with levels last seen in July.
Next week we get data on the Advance Estimate of 4th Quarter 2023 GDP, Durable Goods, New Residential Sales, and Personal Income.
Disclaimer
This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any stock, bond, currency or CFD contract.
Some information contained herein has been obtained from third party sources believed to be reliable, but has not been independently verified by us; its accuracy or completeness is not guaranteed. Our commentary is based on information considered to be reliable, but no representation is made that it is accurate or complete, and should not be relied upon as such.
The views expressed represent the opinions and beliefs at the time of this commentary and are not meant as a market forecast. These views are subject to change at any time based on market or other conditions and Good Life Advisors disclaims any responsibility to update such views. This information may not be relied on as advice or as an indication of trading intent on behalf of any portfolio. Portfolio investments may change at any time.
Economic and performance information referenced is historical and past performance does not guarantee future results. References to future returns are not promises or estimates of actual returns we may achieve, and should not be relied upon.
No investment strategy or risk management process can guarantee returns or eliminate risk in any market environment. Investing in securities involves risk of loss. Stock and Bond prices can decline significantly in response to adverse market conditions, company-specific events, and other domestic and international political and economic developments. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future.
While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Data Sources:
Conference Board Economic Indicators Bureau of Economic Analysis (BEA) Congressional Budget Office (CBO) U.S. Bureau of Labor Statistics (BLS) Federal Reserve Economic Data (FRED Charts)
CME Fed Watch U.S. Treasury – Yields U.S. Census Bureau Institute for Supply Management (ISM) Weekly DOL Employment Data BLS Monthly Jobs Report JOLTS All capital in one visualization 2020
US Energy Admn (EIA) BLS Consumer Price Index CPI BLS Producer Price Index PPIAtlanta Fed GDPNOW NY Fed Nowcast GDP US Census Bureau Housing Starts U.S. Energy Admn
Consumer Credit USCB Retail Sales Construction Spending Federal Reserve Dot Plots 2017 NY Empire Index Philadelphia Federal Reserve P/E Ratio Data -Yardeni Research
Technical Analysis Info: Koyfin.com StockCharts.com – Financial Charts Exponential vs Simple Moving Average
Other links: 1973 Arab Oil Embargo Hunt Brothers Silver Asian Contagion Long-Term Capital bailout
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