Market Matters…
|
Market/Index |
Year Close (2012) |
Qtr Close (09/30/13) |
Previous Week (11/22/13) |
Current Week (11/29/13) |
YTD Change |
Week Change |
|
Dow Jones Industrial |
13,104.14 |
15,129.67 |
16,064.77 |
16,086.41 |
22.76% |
0.13% |
|
NASDAQ |
3,019.51 |
3,771.48 |
3,991.65 |
4,059.89 |
34.46% |
1.71% |
|
S&P 500 |
1,426.19 |
1,681.55 |
1,804.76 |
1,805.81 |
26.62% |
0.06% |
|
Russell 2000 |
849.35 |
1,073.79 |
1,124.92 |
1,142.89 |
34.56% |
1.60% |
|
Global Dow |
1,995.96 |
2,310.26 |
2,441.94 |
2,450.16 |
22.76% |
0.34% |
|
Fed Funds |
0.25% |
0.25% |
0.25% |
0.25% |
0.00% |
0.00% |
|
10 yr Treasury (Yield) |
1.76% |
2.61% |
2.75% |
2.75% |
0.99% |
0.00% |
It’s beginning to look a lot like… Thanksgivukkah. In a fluke of the calendar, Chanukah and Thanksgiving coincide this year so many Jewish people enjoyed latkes (traditional potato pancakes) with their turkey and dressing (all kosher, of course). Normally associated more with Christmas in both secular theme (gift giving) and timing, Chanukah comes very early this year which creates quite the conundrum for retailers. Some expect a boon for the holiday season as Chanukah lasts eight days (nights) and last-minute shoppers will be able to take advantage of the typical Black Friday (and beyond) discounting when buying gifts for those final days. Others fear that the traditional holiday shopping season (day after Thanksgiving until Christmas) will suffer as Chanukah is virtually removed from the equation as most of those purchases will have been made in advance.
On the whole, the jury is still out on the ultimate success of the season. While lower gasoline prices mean an extra buck or two in the pocketbooks for holiday gift buying, the economy remains soft, consumer confidence is down, and promotions and heavy discounts threaten margins throughout the holidays. Because of the uncertainty and concern, more retailers than ever opened their doors early (on Thanksgiving itself) to holiday shoppers. Wal-Mart, Toys-R-Us, and Best Buy were joined by Macy’s and outlets Last Call ( Neiman ’s) and Off 5th ( Saks ) as stores offering shoppers the opportunities to work off their feasts with a bout of shopping. (Neiman’s and Saks were not opened.) While others like Nordstrom, Dillard’s, and Ace Hardware have tried to take advantage of family values and sentimentality by becoming outspoken against the practice, the National Retail Federation predicts that 33 million folks made purchases on Turkey Day, either online or in stores, which will represent about 25% of the weekend’s shoppers. While the crowds may have been smaller, some retailers that choose to open offered critical specials that may not still be available on the following day (and beyond).
In other retail news (in case anyone was paying attention), Tiffany’s posted better-than-expected earnings and raised its outlook for the year, while both Barnes & Noble and Chico’s reported revenues that were shy of forecasts. Transactions also topped the slow news week as Men’s Warehouse now has its site on rival men’s retailer Jos A Banks to the tune of $15 billion, just a few weeks removed from being on the other end of that proposed deal. AMR (American) and US Airways moved closer to merger (and forging the biggest airline) as a judge approved the proposed anti-trust settlement.
The big market news-du-jour found the Nasdaq passing the 4000 mark for the first time in 13 years as the tech-heavy index continued to best the annual (also stellar) performances of both the Blue Chip Dow and benchmark S&P 500. Oil prices dropped as key players continued to engage Iran about its nuke activity and a proposed agreement could begin to loosen the strict sanctions and allow more Iranian crude back onto the market. Enjoy the bird and the extended holiday (and Thanksgivukkah where applicable).
Economic Calendar
|
Date |
Release |
Comments |
|
November 26 |
Housing Starts (10/13) |
Incomplete data due to gov shutdown |
|
Consumer Confidence (11/13) |
Lowest reading since April |
|
|
November 27 |
Jobless Claims (11/23/13) |
6th decline in 7 weeks |
|
Durable Goods Orders (10/13) |
Dropped in October as factories closed during shutdown |
|
|
Leading Indicators (10/13) |
4th straight monthly increase |
|
|
The Week Ahead |
||
|
December 2 |
ISM – Manu (11/13) |
|
|
Construction Spending (10/13) |
||
|
December 4 |
Trade Balance (10/13) |
|
|
New Home Sales (11/13) |
||
|
ISM – Services (11/13) |
||
|
Fed Beige Book |
||
|
December 5 |
Jobless Claims (11/30/13) |
|
|
GDP – 3rd quarter revised |
||
|
Factory Orders (10/13) |
||
|
December 6 |
Unemployment Rate (11/13) |
|
|
Nonfarm Payroll (11/13) |
||
|
Personal Income/Spending (10/13) |
||
|
Consumer Credit (10/13) |
Tis the season…The National Retail Federation forecasts that 140 million folks will hit the malls (interwebs) between Thanksgiving and the end of the initial holiday shopping season weekend, down from 147 million in 2012. Further, the retail group sees just a slight pickup in sales growth in November and December from last year’s activity during the same months. Investment behemoth Morgan Stanley issued an even more dire forecast, predicting the poorest season for holiday sales since 2008. (If only Wall Street would start paying competitive bonuses again, maybe the sales numbers would look better?) During the week, two contrasting confidence releases produced confusing results which added to the uncertainty of the season. The Conference Board’s consumer confidence index surprisingly fell to its lowest reading since April, though the Thomson-Reuters /University of Michigan sentiment index rose from its preliminary report. (Perhaps analysts need to spend less time dissecting the numbers and more time shopping.)
In other news, housing again took center stage as building permits jumped in October to the highest level in over five years and the S&P/ Case Shiller price index climbed 13.3% in September. The housing starts release was delayed because of a collections’ problem stemming from the gov shutdown and most analysts expect the December release to finally reflect the truer picture. The shutdown was also blamed for the drop in durable goods orders as many factories were forced to close plants (temporarily) to accommodate the slowdown in activity. Jobless claims fell for the sixth time in the past seven weeks, another solid showing for labor, though naysayers were quick to point out the traditional volatility and seasonal adjustments to these end of the year releases, not to mention the challenges from accounting for private and gov layoffs and furloughs. Again, the next few months’ numbers should finally weed out any discrepancies caused by the budget fallout (though another early 2014 shutdown lurks on the horizon).
On the Horizon… Thanksgiving represents the true homestretch of the year and once folks return to work next week with full bellies and lighter pocketbooks (hopefully), they will be greeted with a rather hectic week on the economic calendar. Labor, manufacturing, housing, and a Fed Beige Book…all highlight the busy week and analysts will be dissecting more than normal as the Fed meeting follows mid-month. The bond buying rhetoric will begin in earnest as policymakers and Fed watchers debate the strength of the economy and its ability to withstand a reduction in the bond buying program. For now, just pass the leftover bird and turn up the volume on the football game.
© Brounes & Associates
