Stocks continued to rally this week on optimism for future economic growth. Treasury rates continued to climb as did the U.S. dollar. Oil finished slightly lower and gold prices continued to drop based on higher interest rates and a stronger dollar. The Euro currency dropped the most against the dollar after the European Central bank announced an extension of its bond buying program from March of 2017 through the end of the year. However, the ECB’s bond purchases will be at a slower pace of 60BN Euros per month versus 80BN Euros per month, in other words, tapering. This coming week we will have the Federal Reserve meeting and the likelihood of a long anticipated rate hike. While the odds of a .25% rate hike are over 90%, traders will be focusing on signs of the rate of future rate hikes.
In the numbers this week:
- The Energy Information Administration reported that in the prior week:
- Crude oil inventories fell 2.4MM barrels
- Gasoline inventories rose 3.4MM barrels
- Crude oil production fell 2,000 barrels.
- Baker Hughes reported that oil drilling rigs rose by 21 to 498, the biggest monthly increase since July 2015. Still the U.S. is far below the 1609 oil rigs that operated in October 2014. Gas drilling rigs rose 6 to 125.
- The Commerce Department reported that the U.S. trade gap expanded 17.8% in October. This was due to both a rise in imports and a fall in exports. This follows a sharp decline in August and September that was based mostly on high soybean exports. The biggest contributors to the decrease in exports was due to falling soybean, corn and consumer goods exports. The rise in imports included pharmaceuticals, cell phones and capital goods.
- The Institute for Supply Management reported that its index of non-manufacturing (services) activity rose to 57.2 in November from 54.8 in September, a sharp acceleration.
- The Labor Department reported
- Initial claims for unemployment fell 10,000 to 258,000.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik Smith
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.