Jobs, Consumer Sentiment, & China Ag Move Drive Broad Markets! — Vista Partners Daily Market Recap & Weekly Wrap – 12/6/19

The markets on Friday moved up strongly throughout the day as risk appetite increased post certain economic reports. The November nonfarm payrolls report jumped by 266k while private-sector payrolls rose by 254k as the unemployment rate was 3.5%; all results were better than expected. Also, the average hourly earnings increased by +.2%. The preliminary December reading for the University of Michigan Index of Consumer Sentiment moved up to 99.2 from 96.8, a 7-month high. The US-China trade war added fuel too as China announced that it began to exempt some U.S. agricultural purchases from tariffs.  Risk appetite was back on and the markets moved higher. The S&P 500 ended the day up +.91% as the S&P 500 as the energy sector (+2%) was the leader today while the utilities sector (-.2%) was at the bottom of the pack and in negative territory. The Dow Jones Industrial Average ended up 1.22%, the Nasdaq Composite gained  +1%, & the Russell 2000 rose +1.18% at the close of trading. The “fear gauge” Vix (TVIX) dropped to $63.65/share at the close off -6.78% as confidence reigned today.

Markets This Week

Overall the markets throughout the week moved somewhat cautiously until Friday’s move as it stomached the day-in-day-out drama of the US-China trade war rhetoric game as Q3 earnings reports slowed down.

The S&P 500 ended this week +.2% closing at 3145.91 & is up +25.5% YTD. The following S&P 500 sectors led to its positive move this week: energy (+1.5%), consumer staples (+0.9%), health care (+0.9%), & financials (+0.7%).

The Dow lost -.1% this week ending at 28,015.06 and is up +20.1% YTD.

The Tech-heavy Nasdaq moved down -.1% closing at 8656.53 & is up +30.5% YTD.

The Russell 2000 (“the little guys”) moved up by +.6% this week ending at 1,633.84 and remains up +20.5% YTD.

Economic Reports

On Monday, the ISM Manufacturing Index report for November confirmed a 48.1% reading vs. a 48.3% reading for October still south of the Mendoza line for expansion. The total construction spending report showed a decrease of -.8% month/month in October.

On Tuesday, we did not receive any economic reports of significance.

On Wednesday, we received the ISM Non-Manufacturing Index report dropped to 53.9% in November. The ADP Employment Report for November also confirmed that ~67k positions were added to private-sector payrolls. The weekly MBA Mortgage Applications Index decreased by -9.2%.

On Thursday, the Initial claims report for the week ending November 30 showed a decrease of 10k to 203k while continuing claims for the week ending November 23 moved higher by 51k to 1.693M. The Factory Orders report for October confirmed it increased by .3%.

On Friday, we received the November nonfarm payrolls report which jumped by 266k while private-sector payrolls rose by 254k as the unemployment rate was 3.5%; all results were better than expected. Also, the average hourly earnings increased by +.2%. The Wholesale inventories report also showed a rise of +.1% month/month in October while wholesale sales decreased by -.7% in October. Consumer credit moved higher by $18.90B in October.

Next Week

We will receive the following significant economic data next week: The NFIB small business optimism index report on Tuesday, the consumer inflation report on Wednesday and the November retail sales report will hit on Friday.

The Federal Reserve is widely expected to leave interest rates alone on Wednesday when it meets.

Investing & Inspiration

“Wide diversification is only required when investors do not understand what they are doing.” – Warren Buffett