Markets had a strong pullback. After an amazing upward result two weeks ago, markets pulled back in farther than the prior week’s advance. Not even statements from St. Louis Fed President Jim Bullard (a non-voter in next week’s final Fed meeting of the year), that the expected rate hike might be delayed; nor a market holiday to observe President Bush’s funeral; were enough to stem the negative slide last week.
My model’s status: after Monday’s results, it looked like we were headed back to positive territory in the short-term. But Tuesday’s and Friday’s results took all of that away. My model says we are now at 1-3, and the short-term trend is negative again.
The November jobs number disappointed. The expected range was somewhere between 150,000-220,000 jobs. The consensus was for 190,000 new jobs, but the actual number came in at 155,000.
The U3 unemployment number remained at 3.7%, as expected.
The final Beige Book of 2018 saw the Cleveland District finish the year with modest growth. Demand was strong in banking, manufacturing, and non-financial services. Retail sales were up slightly, while housing demand softened. Wage pressure was widespread, seeing an increase in wages as well as signing and retention bonuses being offered to keep staff in place. There was also a noticeable increase in the cost of materials, but manufacturers seemed to have absorbed those increases.
The economic focus of the week: Will the market’s pullback continue? Or will buyers come back into the market and provide some necessary support? We don’t have long to wait to find out.
Indicator focus: November’s Producer Price Index (Tue); November’s Consumer Price Index (Wed); and November’s retail sales and industrial production (Fri).
Have a great week.
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.
Securities offered through Securities America, Inc., member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Parker Wealth Management and Securities America not affiliated.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. Yahoo! Finance, the Wall Street Journal, Investor’s Business Daily and Barron’s are several of the sources used for financial information.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Consult your financial professional before making any investment decision. You cannot invest directly in an index. Past performance does not guarantee future results. No strategy can assure a profit or protect against a loss. Investments in the securities markets involve risk, such as loss of your principal.