U.S. and World News
- The United States reported a record 180,000 new cases of coronavirus yesterday, prompting the CDC to urge Americans to stay home for the Thanksgiving holiday. Also, the level of hospitalizations has doubled in the past two weeks, causing the level of deaths to increase as well. Several individual states throughout the week have put in place additional restrictions that include curfews for non-essential businesses, a ban on gatherings with people outside of your household, and capacity limits for retailers. Additional positive vaccine data rolled in this week from Moderna and Astrazeneca as Pfizer submits its application to the FDA for their emergency-use designation. Dr. Anthony Fauci has expressed concern about skepticism as it relates to vaccines, he told reporters this week that “if we have an effective vaccine and 50% of the population refuses to take it, you still have a considerable public-health challenge”. Pfizer CEO Albert Bourla stated that the first doses of the vaccine could be distributed within hours of approval.
- On Thursday evening, Treasury Secretary Mnuchin requested that the Federal Reserve let five of the nine credit facilities put in place as part of the CARES act expire on December 31st. Secretary Mnuchin stated that the facilities have “clearly achieved their objective” and bond issuance volumes have returned to their pre-COVID-19 levels. The Federal Reserve issued a statement reading “The Federal Reserve would prefer that the full suite of emergency facilities established during the coronavirus pandemic continue to serve their important role as a backstop for our still-strained and vulnerable economy.” Mr. Mnuchin also argued that the funds need to be reallocated to the people that need it, and not to buy bonds, referring to the approximately $455 billion remaining from the CARES Act.
- Markets pulled back this week. The S&P 500 fell -0.73% and closed at 3,558. The Dow Jones lost -0.65% and closed at 29,264. Year-to-date, the S&P 500 is up 11.95% and the Dow Jones is up 4.69%.
- Yields fell this week. The 5 year and 10 year U.S. Treasury Notes are yielding 0.37% and 0.83%, respectively.
- The spot price of WTI Crude rose this week. Prices rose 5.03% and closed at $42.15 per barrel. Year to date, Oil prices are down -30.97%.
- The spot price of Gold fell by -0.89% and closed at $1,872.35 per ounce. Year to date, Gold prices are up 23.40%.
- Initial jobless claims rose to 742,000 and the four-week moving average of claims fell by 14,000 to 742,000. Claims fell by 22,000 in Illinois, 9,000 in Florida, and by 8,000 in Washington. Claims rose by 32,000 in Louisiana, 10,000 in Massachusetts, and by 6,000 in Texas
- The Philadelphia Fed manufacturing index fell by 6.0 points to 26.3 versus expectations for a reading of 22.5
- Retail sales rose by 0.3% versus expectations for an increase of 0.5%
- Retail sales ex-auto & gas rose by 0.2% versus expectations for an increase of 0.6%
- Import prices ex-petroleum was flat versus expectations for an increase of 0.3%
- Industrial production rose by 1.1% versus expectations for an increase of 1.0%
- Business inventories rose by 0.7% versus expectations for an increase of 0.6%
- The level of housing starts rose by 4.9% to a seasonally-adjusted-annualized-rate of 1.53 million versus expectations for an increase of 3.2%
- Existing home sales rose by 4.3% to a seasonally-adjusted-annualized-rate of 6.85 million units versus expectations for a decline of -1.1%
Fact of the Week
- If a trade bought the SPY ETF at the open and sold it at the close every day since the start of 1993, they would be down 10% over the 27 year period. If, instead, they had purchased the SPY ETF at the beginning of 1993 and reinvested the dividends, they would be up over 1270% (Source; Bespoke Research, Bloomberg).
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