JOBS REPORT GIVES THE FED A GREEN LIGHT
The economy created 211,000 jobs in November – a healthy hiring total that could prompt the Federal Reserve to tighten for the first time since 2006. Job growth has averaged 218,000 over the past three months (the Labor Department just revised October and November job gains upward by a total of 35,000 hires). Unemployment remained at 5.0% in November while underemployment (the U-6 rate) ticked up to 9.9%. Yearly wage growth was at 2.3%. Economists polled by Briefing.com expected 196,000 November payroll additions.1,2
SERVICE SECTOR GROWS, FACTORY SECTOR SHRINKS
According to the Institute for Supply Management, U.S. manufacturing contracted last month. The ISM factory PMI came in at a troubling 48.6, down from 50.1 in October (anything over 50 denotes growth). The Institute’s service sector PMI declined 3.2 points in November, but its 55.9 mark indicated solid expansion.2
PENDING HOME SALES INDEX IMPROVES
Housing contract activity increased 0.2% in October, representing a turnaround for the pending home sales index maintained by the National Association of Realtors. The index had retreated 2.3% in September.2
OIL SETTLES AT $39.97
Light sweet crude closed below the $40 level Friday, losing 2.7% for the day. Gold, on the other hand, gained $22.90 on the COMEX Friday to close at $1,084.10.3
A FRIDAY RALLY LEADS TO A WINNING WEEK
Two things turned a down week into a slightly positive one on Wall Street: the latest jobs report and European Central Bank president Mario Draghi’s comment that the ECB’s stimulus effort had “no particular limit.” The Dow rallied 369.96 Friday. Across five trading days, the Nasdaq gained 0.29%, the Dow 0.28% and the S&P 500 0.08%. The Friday settlements: Nasdaq, 5,142.27; Dow, 17,847.63; S&P, 2,091.69.3
THIS WEEK: Diamond Foods and H&R Block present earnings Monday. Tuesday offers earnings news from AutoZone, Casey’s General Stores, Dave & Buster’s, Krispy Kreme, Smith & Wesson and Toll Brothers. Wednesday brings earnings from Costco, Lululemon Athletica, Men’s Wearhouse and Pep Boys. In addition to a new initial jobless claims report, Thursday will also see earnings announcements from Adobe and Restoration Hardware. The November PPI, November retail sales numbers and the initial December University of Michigan consumer sentiment index will all be released on Friday.
About the Independent Financial Advisor
Robert Pagliarini, PhD, CFP®, EA has helped clients across the United States manage, grow, and preserve their wealth for the past 25 years. His goal is to provide comprehensive financial, investment, and tax advice in a way that was honest and ethical. In addition, he is a CFP® Board Ambassador, one of only 50 in the country, and a real fiduciary. In his spare time, he writes personal finance books, finance articles for Forbes and develops email and video financial courses to help educate others. With decades of experience as a financial advisor, the media often calls on him for his expertise. Contact Robert today to learn more about his financial planning services.