Stocks ended the week mixed with most indices lower but the small cap Russell 2000 index gaining. The Senate passed a one week stopgap spending bill to avert a government shutdown and to provide more time to reach an agreement on a longer term spending bill and an aid/stimulus package. Negotiations continue but difference remain, mainly on aid to states and liability protections.
Treasury yields fell with the 30-year bond yield closing at 1.624% and the 10-Year note at 0.887%. Crude oil rose to $46.61 a barrel while natural gas rose to $2.595 per MMBTUs on mild temperatures. The U.S. dollar index fell to 90.97 and gold prices were nearly unchanged at $1842 an ounce.
In the economic numbers this week:
- China’s trade surplus hit a record high of $75.4BN in November as exports surged 21% and imports rose only 4.5%.
- China reported that the consumer-price index in November was 0.5% lower than last November. This was mainly due to a 2.0% drop in food prices which were elevated last year due to the African swine fever. Pork prices have fallen 12.5% in November from a year earlier.
- The European Central Bank extended two key emergency programs into 2022. Bond purchases increased by over a third. For 2020 bond purchases will be about $3.6TN.
- The U.K. reported its gross domestic product rose 0.4% in October but is still 7.9% below February.
- The Labor Department reported:
- A seasonally adjusted 835,000 workers filed initial claims for unemployment in the week ending December 4th up 137,000 from a revised 716,000 the week before as virus shutdowns resume.
- The four week moving average of initial claims, designed to smooth out weekly volatility, rose 35,500 to 776,000.
- Continuing claims for regular unemployment rose from 5.5MM to 5.8MM in the week ending November 28th.
- A broader measure of claims including extended benefits, pandemic assistance and other programs fell from 20.2MM to 19.0MM as of November 21th.
- For the full report go here: https://www.dol.gov/ui/data.pdf .
- The consumer-price index rose 0.2% in November. The biggest increases were in energy, airfares and apparel. Core prices, excluding volatile food and energy also rose 0.2%. From a year earlier consumer prices have risen 1.2% and core prices have risen 1.6%.
- Wholesale prices rose 0.1% in November, down from 0.3% in both September and October. From a year ago, wholesale prices have risen 0.8% down from 1.1% in February.
- The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf . Also, the EIA reported in the past week:
- Field production of crude oil was unchanged at 11.1MM barrels per day.
- Natural gas storage fell 91BN cubic feet and is above the average level at this time of year during the past five years.
- Baker Hughes reported the number of active oil rigs rose 12 to 258. The number of active natural gas rigs rose 4 to 79.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik A Smith AIF®
President Managing Partner
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
Visit our Website: www.genfinplan.com
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly.