Market Indexes: All 4 indexes retreated this week, ending a 5-week streak of weekly advances, as inflation fears, Fed tapering, and lower consumer sentiment gave investors pause.
Volatility: The VIX fell -1% this week, ending the week at $16.29.
High Dividend Stocks: These high dividend stocks go ex-dividend this coming week: Artisan Partners Asset Management (NYSE:APAM), Oxford Square Capital (NASDAQ:OXSQ), Sabra Healthcare REIT (NASDAQ:SBRA), PennantPark Floating Rate Capital (NASDAQ:PFLT), Gladstone Investment (NASDAQ:GAIN), Gladstone Commercial (NASDAQ:GOOD), and LTC Properties (NYSE:LTC).
Market Breadth: 11 DJIA stocks rose this week, vs. 11 last week. 52% of the S&P 500 rose, vs. 62% last week.
FOREX: The US $ gained vs. most other major currencies again this week.
Economic News
“The producer price index for final demand rose 0.6% last month after climbing 0.5% in September, the Labor Department said on Tuesday. That reversed the slowing trend in the monthly PPI since spring. In the 12 months through October, the PPI increased 8.6% after a similar gain in September.
"More than 60% of the increase in the PPI last month was due to a 1.2% rise in the prices of goods, which followed a 1.3% jump in September. A 6.7% surge in gasoline prices accounted for a third of the rise in goods prices. There were increases in the prices of diesel, gas and jet fuel as well as plastic resins.
"Wholesale food prices dipped 0.1% as the cost of beef and veal tumbled 10.3%. Prices for light motor trucks fell as the government introduced new-model-year passenger cars and light motor trucks into the PPI. Exorbitant motor vehicle prices have accounted for much of the surge in inflation as a global semiconductor shortage linked to the nearly two-year long COVID-19 pandemic has forced manufactures to cut production, leaving virtually no inventory. ” (Reuters)
“U.S. consumer prices accelerated in October as Americans paid more for gasoline and food, leading to the biggest annual gain in 31 years, more signs that inflation could stay uncomfortably high well into 2022 amid snarled global supply chains. Inflation pressures are also brewing in the labor market, where an acute shortage of workers is driving wages higher.
"The number of Americans filing claims for unemployment benefits fell to a 20-month low last week. The consumer price index jumped 0.9% last month after climbing 0.4% in September, the Labor Department said. The largest gain in four months hoisted the annual increase in the CPI to 6.2%. That was the biggest year-on-year rise since November 1990 and followed a 5.4% advance in September.
"Food prices advanced 0.9%, mostly driven by meat, eggs, fish, vegetables, cereals, and bakery products. It also cost more to eat away from home. But prices for alcoholic beverages fell. Excluding the volatile food and energy components, the CPI gained 0.6% last month after climbing 0.2% in September.
"The so-called core CPI was boosted by rents, with owners’ equivalent rent of primary residence, which is what a homeowner would receive from renting a home, rising a solid 0.4%.The cost of hotel and motel accommodation rose 1.5%.
"Prices for used cars and trucks rebounded 2.5% after declining for two straight months. New motor vehicle prices increased 1.4%, marking the seventh consecutive month of gains. A global semiconductor shortage has undercut motor vehicle production. Healthcare costs increased 0.5%, the largest gain in 17 months.
"Consumers also paid more for household furnishings, recreation and grooming. The costs of motor vehicle insurance and apparel were unchanged. Air fares fell 0.7%.The so-called core CPI jumped 4.6% on a year-on-year basis, the largest increase since August 1991, after being steady at 4.0% for two straight months.” (Reuters)
“The University of Michigan’s Consumer Sentiment Index dropped to 66.8 in its preliminary November reading, the lowest level since November 2011, from October’s final reading of 71.7.” (Reuters)
Week Ahead Highlights: There will be several Housing-related reports due out this week, including the Homebuilders Index, Building Permits, and Housing Starts. Walmart (NYSE:WMT), Target (NYSE:TGT), Home Depot (NYSE:HD), and Macy’s (NYSE:M) are among the high profile retailers expected to report next week.
The Coming Week’s US Economic Reports
Sectors: Basic Materials led this week, with Consumer Discretionary lagging.
Futures: WTI crude fell -0.5% this week, ending at $80.69.
