Stocks posted a solid week of returns for the week, pulling all but one of the major benchmark indexes into positive territory for the year to date. A strong labor report helped push stocks higher at the end of last week, while somewhat positive reports followed discussions with Chinese president Xi which helped quell investors’ concerns over the ongoing tariff war. Small caps fared the best last week, led by the Russell 2000. Global stocks also reversed course as the Global Dow climbed over 3.0%. The Nasdaq, S&P 500, and the Dow each posted strong returns by last week’s end. Not surprisingly, long-term bond prices fell, driving yields higher. The price of crude oil (WTI) fell notably last week and the price of gold (COMEX) lost value for the first time in several weeks.
LAST WEEK’S ECONOMIC HEADLINES
- October saw 250,000 new jobs added while the unemployment rate remained at 3.7% while the labor force participation rate increased.
- The trade deficit continued to expand in September.
- Consumers’ income rose in September, while spending went up. Inflation was steady as prices for consumer goods and services increased 0.1%.
- Reaching a five-month high, a spurt in new orders helped drive manufacturing in October.
- The October 2018 Manufacturing ISM® Report On Business®, not atypically, differed in its assessment of manufacturing conditions compared to the prior bullet’s survey results. The ISM® report had new orders, as well as production and employment, decrease. Oftentimes, the difference between the surveys lies in the number of purchasing managers who respond to each survey and how the responses are weighted.
EYE ON THE WEEK AHEAD
The Federal Open Market Committee meets this week. Speculation is that the Committee will maintain interest rates at their current level, although that is not a certainty.
Have a great week!