You are here

Weekly Update

December 6, 2017

The Economy

  • An upward revision to third-quarter gross domestic product (GDP) produced a better-than-expected preliminary reading of 3.3% annualized growth, thanks to nonresidential fixed investments and state and local government spending, as well as a holiday-related uptick in inventory investment. Federal Reserve (Fed) watchers believe that the report should keep the central bank on track for this year’s third interest-rate increase at its meeting later this month.

  • October new-home sales jumped by 6.2% to an annualized rate of 685,000, a 10-year high. Analysts attributed the gains to strong labor and equity markets despite limited supply.

  • Consumer confidence increased for the fifth consecutive month and surged to a 17-year high in November, driven by strong employment and stock-market expectations, according to the Conference Board.

  • The Institute for Supply Management’s manufacturing purchasing managers’ index (PMI) weakened in November but remained in solid expansion territory due to new export orders and employment. A similar report from Markit also showed strength in new orders and emerging inflationary pressures.

  • Initial jobless claims slid by 2,000 to 238,000 in the week ending November 25. The more-stable four-week moving average climbed by 2,250 to 242,250, the second straight upward move. Continuing claims rose to 1.96 million in the week ending November 18. Economists expect the historically tight labor market to boost wage growth as companies pursue talented workers.

  • Personal income and outlays both grew modestly in October. Income expanded by 0.4% for the month, with wages and salaries rising by 0.3%, while consumer spending advanced by 0.3%. Core inflation (which excludes food and energy and is the Fed’s primary inflation index) inched 0.2% higher for the period; the year-over-year reading was unchanged at 1.4%.

  • Construction spending climbed by 1.4% in October and 2.9% year over year. Public construction projects moved 3.9% higher, the biggest gain in two years; federal government construction spending jumped by 11.1%.

  • The trade deficit widened in October to $68.3 billion. Exports eased by 1.0% (due to weakness in food products and capital goods), while imports increased by 1.5% (primarily within capital goods and industrial supplies). A larger trade deficit generally has a negative impact on economic growth.

  • Economic sentiment in the eurozone hit a 10-year high in November. The headline index gained 0.5 points as confidence notably improved across almost all sectors, consistent with a continuing economic recovery.

  • Activity in China’s manufacturing sector expanded at a slower pace during November, according to a PMI reading. A stronger reading in output was offset by weaker readings in employment.

    U.S. Economic Calendar

  • December 4: Factory Orders

  • December 5: International Trade, PMI Services, ISM Non-Manufacturing

  • December 6: Mortgage Applications, Productivity and Costs

  • December 7: Jobless Claims

  • December 8: Employment Situation, Consumer Sentiment

Stocks

  • Global equities were up this week. Developed markets outpaced emerging markets.
  • U.S. equity sectors were all positive. Telecommunications and information technology led, while consumer staples and utilities lagged. Growth stocks had the edge over value stocks and small-company stocks beat large-company stocks.

Bonds

  • Global bond markets were lower this week. Corporate bonds lagged, followed by global government bonds. High-yield bonds outperformed.
  • Treasury yields moved higher early in the week after upbeat economic data, but fell back after reports that a former Trump adviser would cooperate with the FBI in its ongoing Russia inquiry.

 

Disclaimer:

This information is not meant as a guide to investing, or as a source of specific investment recommendations, and Gibraltar Private Bank & Trust makes no implied or express recommendations concerning the manner in which any client’s accounts should or would be handled, as appropriate investment decisions depend upon the client’s investment objectives. The information is general in nature and is not intended to be, and should not be construed as, legal or tax advice. In addition, the information is subject to change and, although based upon information that Gibraltar Private Bank & Trust considers reliable, is not guaranteed as to accuracy or completeness. Gibraltar Private Bank & Trust makes no warranties with regard to the information or results obtained by its use and disclaims any liability arising out of your use of, or reliance on, the information.

Investment Product: Not FDIC Insured • No Bank Guarantee • May Lose Value • Not a Deposit • Not Insured by Any Federal Government Entity

Disclosures:

Index returns are for illustrative purposes only and do not represent actual fund performance.

Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

This material is provided by SEI Investments Management Corporation (SIMC) for educational purposes only and is not meant to be investment advice. The reader should consult with his/her financial advisor for more information. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. There are risks involved with investing, including possible loss of principal. SIMC is a wholly owned subsidiary of SEI Investments Company.

 

 

Member FDIC •  Equal Housing Lender