Thursday, November 26, 2015
- Happy Thanksgiving! Traders are enjoying their time off today with an upcoming week packed with major announcements, decisions and financial drama.
- Monday - The IMF is expected to grant China's yuan reserve currency status. The decision will elevate the renminbi and China's influence in the global economy. An open central bank meeting will also determine how the Fed operates under new Dodd-Frank rules governing its emergency powers.
- Wednesday - Fed Chairwoman Janet Yellen will speak before the Economic Club of Washington.
- Thursday - The Governing Council of the ECB meets in Frankfurt, where it is expected to expand its easing program. Janet Yellen is also scheduled to testify before the Joint Economic Council.
- Friday - The U.S. November jobs report is the highlight of the week since it's the last big piece of data before the Fed's policy meeting on Dec. 15-16. The figures will come as OPEC convenes in Vienna, which will likely set the future climate for oil prices.
- More than a half-dozen Fed officials are also scheduled to speak during the week, including Charles Evans, Dennis Lockhart, John Williams, Loretta Mester, Patrick Harker, James Bullard and Narayana Kocherlakota.
Wednesday, November 25, 2015
- Stocks finished up unchanged in a calm pre-Thanksgiving trading day, as the Dow Jones Industrial Average eked out a 1-point gain to end at 17,813, and the S&P 500 fell just a quarter-point to 2,088.87. Nasdaq stocks rose 0.3%.
- A heavy data dump in the morning brought generally positive news, in a last pre-break indicator that the economy may be strong enough to withstand the first Fed rate hike in years. New home sales rose nearly 7% but came in just short of expectations, while durable goods orders rose 3% vs. 1.5% expected.
- Personal income (+0.4%) was as expected, but a bare gain in personal spending was below expectations for a 0.3% increase.
- Oil's rig count declined for the second straight week, while oil inventories were up. Crude gained 0.5% to $43.10.
- The FHFA won't hike the limits in most markets on mortgages backed by Fannie Mae (OTCQB:FNMA) and Freddie Mac (OTCQB:FMCC) beyond $417K - it's the 11th consecutive year that number has been in place.
- Primo areas like San Jose, San Francisco, and New York will keep their limit of $625K, while 39 other counties will see increases of $5.75K-$34.5K.
- It might be good news for roughed-up Redwood Trust (RWT +2.1%), which packages non-conforming mortgages. Through the end of September, jumbo mortgages made up nearly 19% of the market, according to Inside Mortgage Finance - up from a low of 5.5% in 2009 and the highest market share since 2006.
- The news is also something builders in high-cost areas are going to have to deal with. Moving a community just a little bit can have quite the effect - in San Bernardino County, the $417K cap is in place, but in neighboring L.A. County, the limit moves to $625K.
- The GDPNow model sees Q4 GDP growth of just 1.8%, that's down from 2.3% forecast just one week ago. It also stands against the positively rosy 2.8% median guess of the Blue Chip consensus.
- Behind the drop the Atlanta Fed estimate was this morning's weaker-than-anticipated personal income and outlays report for October.
- A flurry of U.S. economic data will be crammed into the market session today, as trading activity slows before a long Thanksgiving weekend.
- Coming up: Durable Goods, Jobless Claims, Personal Income, New Home Sales, Consumer Sentiment and EIA Petroleum Inventories.
- The figures come on the back of a solid revision to third quarter GDP and could provide more evidence that the economy is strong enough to withstand a rate hike in December.
- U.S. equity-index futures are all up by 0.3%.
Tuesday, November 24, 2015
- In July, just five of the regional Fed banks asked for a 25 basis point hike in the discount rate, and in September that rose to eight. Last month, the Boston Fed joined the rate hike crowd, bringing the total to nine.
- The discount-rate vote often indicates the preference of the Fed bank presidents who rotate as voters on the FOMC. Boston Fed President Rosengren will be a voter in 2016.
- Preferring no change in the rate were the New York and Chicago banks, while Minneapolis again requested a 25 basis point cut in the discount rate.
- November State Street Investor Confidence Index: -7.2 to 106.8 vs. 114.0 (revised) in October and 116.6 in September.
- The reading for Asia was down 9.3 points to 100.7, while the North American index dropped 11.9 points to 112.9. Europe was a bright spot with a 6.3 increase to 96.5.
- Nov Consumer Confidence: 90.4 vs. 99.6 consensus; 99.1 (revised) in Oct.
- “The decline was mainly due to a less favorable view of the job market. Consumers’ appraisal of current business conditions, on the other hand, was mixed" said Lynn Franco, Director of Economic Indicators at The Conference Board.
- Reacting not to in-line Q3 GDP numbers (the government's 2nd estimate has growth at 2.1%), but instead to Turkey's downing of a Russian warplane, Europe down nearly 2%, and U.S. stock index futures at session lows, off 0.8%, the 10-year Treasury yield is lower by three basis points to 2.21%.
- The yield on the benchmark has now returned to nearly the level it was at prior to the October employment report - which more or less cemented the fact of a December rate hike.
- TLT +0.3%, TBT -0.6%
Visit Seeking Alpha’s new Earnings Center
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs