Julex Market Weekly 12-01-2013 | US Stocks Rose Slightly During Thanksgiving Week

Top Stories Last Week

• US Stocks Rose During Thanksgiving Week

US stocks rose slightly during Thanksgiving week. S&P index rose 0.1%, and MSCI EAFE index climbed 0.1%. The MSCI Emerging Market was up 0.3%. Gold rose 0.7%, and the SPGC commodity index increased by 0.1%. The bond markets gained slightly as well. Barclays US Treasury index was flat, while US high yield bonds gained 0.3%.

• US Durable Goods Orders Dropped 2% in October

Businesses spent less in October on machinery, computers and most other items, lowering orders for U.S. long-lasting factory goods. The orders for durable goods dropped 2% in October from September. That follows a 4.1% increase in September from August. The orders for commercial aircraft plunged nearly 16% last month, accounting for most of the decline. But orders also fell 1.2% in a closely watched category, such as core capital goods, which excludes volatile transportation and defense orders. That was the second straight drop. The orders excluding transportation declined 0.1%, which is worse than what economists had expected.

• European Inflation Rate Rose More Than Expected

The news on inflation and unemployment rate will ease some pressure on the European Central Bank to act again shore up the eurozone economy. The unemployment was down for the first time since early 2011 and that inflation edged higher in November, dampening fears that the eurozone is about to face a deflation. The inflation rate rose to 0.9% in the year to November from October’s 0.7%, slightly higher than market expectations for a 0.8% increase. Still, inflation remains well below the ECB’s target of just under 2%. It was a sharp fall in October to a near four-year low that spurred the central bank this month to cut its main interest rate to a record low of 0.25%.

• US Consumer Confidence Fell in November

U.S. consumers’ confidence in the economy fell in November to the lowest level in seven months, dragged down by greater concerns about hiring and pay in the coming months. The Conference Board said that its index of consumer confidence dropped to 70.4 from 72.4 in October. The October reading was higher than initially reported, but still well below the 80.2 reading in September. November’s drop comes after the 16-day partial government shutdown caused confidence to plunge in October. The declines in both months were driven by falling expectations for hiring and the economy over the next six months.

• US Housing Prices Rose at the Fastest Rate Since 2006

In September, U.S. home prices rose at their fastest rate since February 2006, the peak of the housing bubble, beating economists’ expectations. The S&P/Case-Shiller Home Price Index of single-family homes in the 20 major metro areas collectively rose 13.3% (not seasonally adjusted) year-over-year, a 0.7% gain (not seasonally adjusted) over August. That’s down from a 1.3% (not seasonally adjusted) climb in August. Twelve markets posted double-digit increases. Average home prices are back to their mid-2004 levels, and about 20% below their mid-2006 peak.

Top Stories to Watch This Week

• US Employment Report

US employers are likely to add 185K jobs and unemployment rate will drop to 7.2%, according to economists’ survey.

• US ISM and China PMI

Manufacturing activities in both US and China are expected to continue their expansion.

• ECB, BOE, RBA and BOC Monetary Policy Meetings

European Central Bank, Bank of England, Reserve Bank of Australia and Bank of Canada will hold policy meetings this week. It is widely expected all of them will keep monetary policies intact.