The Daily Difference: Market Update

Jobs: Last Wednesday’s jobless claims number came in at 316k, below the consensus estimate of 330k. Although these numbers signal an improvement, they are not robust due to effects of the government shutdown, computer glitches in California over the last few months, and seasonality (holiday hiring and a shorter shopping season due to the late Thanksgiving). Manufacturing: Markit Economics' composite reported a 10-month high of 54.7 vs. a consensus estimate of 54.2 and October’s reading of 51.8. The most significant component was new orders, rising to 56.2, despite a weak new export orders number of 51.4.  Although foreign demand is slim, we seem to be consuming enough at home to give the manufacturing sector a boost.

Consumer spending: An extremely large input to GDP, consumer spending will likely by closely watched this holiday season. Many expected this weekend to top past Thanksgiving weekends as a result of the later holiday and the introduction of Thanksgiving day sales. Unfortunately, despite the additional day of shopping, sales fell 2.9% year over year.  Furthermore, many analysts are speculating a higher proportion of sales went to “door-busters,” which could put further pressure on margins. We expect to see some volatility in the mid cap retail space through the end of the year!

Coming later this week:

·         Wednesday: ADP Employment, the Fed’s Beige Book, and New Home Sales

·         Thursday: GDP and Jobless Claims

·         Employment, Personal Income, and Consumer Sentiment