Friday, December 9, 2016

Investors Not Feeling This Market

The stock market has been pretty strong over the past month. Since the election, the S&P 500 index is up 3.8 percent, while the Dow is up 5.5 percent and the Nasdaq up 3.2 percent. But individual investors don't seem to quite believe in it. 

While sentiment on the part of individual investors definitely has seen an uptick since the election, in the last two weeks, that positive momentum has stalled. In AAII's sentiment survey, optimism is  down over six percentage points from where it was two weeks ago even as equities have been rallying to record highs. In this week’s sentiment survey, individual investor bullish sentiment slipped to 43.1 percent. 

That means despite the strong showing, less than half of all investors feel optimistic about this market. In fact, the last time more than half of individual investors were bullish was 101 weeks ago at the start of 2015.

Thursday, December 8, 2016

Time to Eat at Home

Here's an interesting snapshot of our current economy: Traffic at U.S. fast-food restaurant fell 1 percent in the third quarter, the sector’s first traffic decline in five years, according to the industry tracker NPD Group. Total restaurant visits were also down 1 percent.

One reason for this is that eating out has become more expensive even as the cost of at-home dining has fallen. The average restaurant bill has climbed 21 percent in the past decade.

Meanwhile, the cost of food purchased for home use — that is, groceries — has fallen 2.4 percent in the past year, according to the October consumer price index. That’s the biggest decline over a 12-month period since the end of the Great Recession in 2009. The NPD has estimated than 82 percent of all meals are now consumed at home.

Wednesday, December 7, 2016

The End of the Oil Glut?

Is the oil glut over? Oil future prices ended the day on Monday at a more than one-year high. West Texas Intermediate crude oil for January delivery rose 11 cents to $51.79 a barrel, marking the highest finish for oil since July 2015.

The primary cause: OPEC's agreement to curb member production to no more than 32.5 million barrels a day is set to begin January 1. Key oil producers who aren’t members of OPEC also agreed to cut back their output by 600,000 barrels a day, with Russia taking on half that reduction.

OPEC's output set another record high in November, rising to 34.19 million barrels per day from 33.82 million in October. Russia reported average oil production in November of 11.21 million barrels per day, its highest in nearly 30 years.

Monday, December 5, 2016

Holiday Shopping by State

The holiday shopping season is off to a pretty good start here in the Garden State. According to Adobe Digital Insights, shoppers spent $539 million in New Jersey over the long weekend between Thanksgiving and Cyber Monday.

That ranks seventh in the nation. The top ten states for holiday spending in that time frame:
  1. California, $1.7 billion
  2. New York, $1.1 billion
  3. Texas, $788 million
  4. Florida, $680 million
  5. Illinois, $645 million
  6. Pennsylvania, $599 million
  7. New Jersey, $539 million
  8. Ohio, $440 million
  9. Georgia, $387 million
  10. North Carolina, $383 million

Friday, December 2, 2016

November Jobs Report

The economy added 178,000 jobs in November, and the headline unemployment rate declined by three ticks to 4.6 percent, the U.S. Bureau of Labor Statistics reported this morning. That's right in line with recent trends: Over the past three months, job gains have averaged 176,000 per month.

The strongest sector continues to be employment in professional and business services, which rose by 63,000 in November and has risen by 571,000 over the year. Over the month, accounting and bookkeeping services added 18,000 jobs.

Health care employment rose by 28,000 in November; over the past 12 months, health care has added 407,000 jobs. Employment in construction continued on its recent upward trend in November,  adding 19,000 jobs. Over the past three months, construction has added 59,000 jobs, largely in residential construction.

Thursday, December 1, 2016

A Strong November

November turned out to be a very solid month all across the markets. For the month, the Dow gained 5.4 percent, which was its best monthly performance since March. The S&P 500 Index rose 3.4 percent and the Nasdaq rose 2.6 percent, representing the best month for both those indexes since July.

Both the Dow and the S&P 500 also hit new intraday records in yesterday's trading session. But they both fell back from those levels before the day was over.

The biggest winner for the month was the Russell 2000. The small-cap index rose by a whopping 11 percent in November, marking its best month since October 2011.

Wednesday, November 30, 2016

Third Quarter GDP Bumps Up

Some strong economic news: Gross domestic product expanded at a 3.2 percent annual rate in the Commerce Department’s second reading for the third quarter, released yesterday. That's up from an initial estimate of 2.9 percent, and is the strongest pace since the second quarter of 2014.

Consumer spending rose 2.8 percent in the quarter, higher than the original estimate of 2.1 percent and the strongest rate since 2002. The consumer sector accounts for two-thirds of the economy, and has been a strong factor in economic growth for several quarters.

Also helping out: Corporate profits soared 6.6 percent in the third quarter, following on the heels of a 0.6 percent decline in the second quarter. After-tax profits rose 7.6 percent from the second quarter.