Market Insights 11/26/2019

U.S. stocks continued to rack up record highs, courtesy of lingering optimism of a “phase one” U.S.-China trade deal.

Consumer Confidence unexpectedly slipped and Richmond manufacturing output surprisingly slipped into contraction, though the trade deficit unexpectedly narrowed and new home sales topped forecasts.

Treasury yields and the U.S. dollar dipped. Gold and crude oil prices rose. Asia finished mixed and Europe traded higher.

The Markets…

The Dow Jones Industrial Average rose 55 points (0.2%) to 28,122

The S&P 500 Index gained 7 points (0.2%) to 3,141

The Nasdaq Composite advanced 15 points (0.2%) to 8,648

In moderately-heavy volume, 1.6 billion shares were traded on the NYSE and 2.4 billion shares changed hands on the Nasdaq

WTI crude oil increased $0.40 to $58.41 per barrel and wholesale gasoline was up $0.03 at $1.70 per gallon

The Bloomberg gold spot price was $7.13 higher at $1,462.46 per ounce

The Dollar Index—a comparison of the U.S. dollar to six major world currencies—dipped 0.1% to 98.24

Consumer Confidence unexpectedly slips to headline heavy economic docket

The Conference Board’s Consumer Confidence Index surprisingly fell to 125.5 in November, from October’s upwardly-revised 126.1 level, versus the Bloomberg estimate of a rise to 127.0. The index sits at the lowest level since June as the Present Situation Index dropped, more than offsetting an improvement for the Expectations Index of business conditions for the next six months.

New home sales declined 0.7% month-over-month in October to an annual rate of 733,000 units, but September’s figure was upwardly-revised to a 738,000 unit pace and the level easily topped the 705,000 unit forecast. The median home price was down 3.5% y/y at $316,700. New home inventory ticked higher to a 5.3 months of supply at the current sales pace from 5.2 months in September.

Treasuries rose, with the yields on the 2-year and 10-year notes declining 2 basis points to 1.58% and 1.74%, respectively, while the 30-year bond rate decreased 3 bps to 2.17%.

The rest of the week’s worth of data will be condensed into tomorrow’s fully-loaded economic calendar ahead of the Thanksgiving holiday break. Weekly mortgage applications and jobless claims, pending home sales, the Chicago PMI and first revision (two) to Q3 GDP are all on the docket.

Europe mostly higher as global markets eye data and U.S.-China trade

European equities finished mostly higher, following a relatively upbeat December read on German consumer sentiment and with the global markets focusing on U.S.-China trade talks to see if a “phase one” deal looks likely as a December 15th deadline looms for the implementation of further tariffs on Chinese goods. Optimism of an agreement has been a main catalyst to the global stock market rise as of late and the string of record highs in the U.S and abroad.

The U.K. FTSE 100 Index, France’s CAC-40 Index and Spain’s IBEX 35 Index ticked 0.1% higher, Italy’s FTSE MIB Index advanced 0.3%, and Switzerland’s Swiss Market Index traded 0.4% to the upside, but Germany’s DAX Index dipped 0.1%.

Stocks in Asia finished mixed on the heels of yesterday’s global advance that saw the U.S. markets register a fresh round of record highs. U.S.-China trade remains a key focus for the markets as headlines suggest the two sides continue to talk ahead of the December 15th deadline for further implementation of tariffs on Chinese goods. Optimism appears to remain intact regarding a “phase one” agreement between the two largest economies, bolstered by China saying yesterday that it will raise penalties on violations of intellectual property rights, which is a key contention point pertaining to a comprehensive trade agreement.

China’s Shanghai Composite Index finished flat and the Hong Kong Hang Seng Index dipped 0.3%, trimming some of yesterday’s rally that was fostered by district council elections in the region that resulted in a landslide victory for pro-democracy candidates as Hong Kong continues to deal with escalated unrest.

Japan’s Nikkei 225 Index rose 0.4%, with the yen slipping a bit, while South Korea’s Kospi Index dipped 0.1%. Australia’s S&P/ASX 200 Index advanced 0.8% and India’s S&P BSE Sensex 30 Index declined 0.2%.