Dow advanced 100, advancers over decliners about 3-1 & NAZ gave back 27. The MLP index crawled up 1+ to the 254s & the REIT index was steady, holding near 356. Junk bond funds slid lower & Treasuries saw selling, bringing higher yields (more below). Oil fell chump change in the 76s & gold was up 6 to 1999 (more on both below).
AMJ (Alerian MLP Index tracking fund)
Online spending on Thanksgiving Day jumped 5.5% compared to a year ago, according to Adobe Analytics, a reflection of holiday shoppers who are buying more of their gifts online & responding to discounts. E-commerce sales totaled $5.6B on the holiday. That's nearly twice as much as the $2.87B that consumers spent on Thanksgiving in 2017, according to the company's analysis. For Black Friday, online spending is expected to climb even higher & bring in an expected $9.6B, up 5.7% year over year. Still, it's too soon to say if the pop will be enough to propel a strong season overall. Holiday shoppers are expected to spend 3-4% more year over year in Nov & Dec, according to the National Retail Federation’s (NRF) forecast. That would be a significant slowing from the holiday sales growth seen during the pandemic & a return to more typical growth levels prior to the Covid crisis. Adobe's data covers more than 1T visits to US retail websites, 100M unique items & 18 total product categories. It does not cover in-store purchases, where the majority of US holiday purchases still take place. Last year, about 70% of total holiday sales took place in physical retail locations, according to the NRF.
Thanksgiving Day online sales jump as discounts motivate holiday shoppers
Inflation may be decreasing in the US, but Americans expect it to surge again, according to fresh data. The University of Michigan's latest consumer survey found consumer sentiment fell for the 4th month in a row in Nov, while households' inflation expectations climbed for the 2nd straight reading. According to the findings, consumers see inflation accelerating to 4.5% over the next year, up from 4.2% in Oct & 3.2% in Sep. Over a 5-year horizon, consumers now see inflation running at 3.2% on average, up from 3.0% in Oct & 2.8% in Sep. That is the highest since a matching reading of 3.2% in 2011. Households' long-term inflation outlook has not been higher than that since 2008, when it reached 3.4% as the financial crisis was beginning to unfold. "These expectations have risen in spite of the fact that consumers have taken note of the continued slowdown in inflation," Joanne Hsu, director of the survey, said. "Consumers appear worried that the softening of inflation could reverse in the months and years ahead." The Labor Dept reported last week that the consumer price index, a broad measure of the price of everyday goods including gasoline, groceries & rents, was unchanged in Oct from the previous month. Prices climbed 3.2% on an annual basis. But when compared with Jan 2021, shortly before the inflation crisis began, prices remain up a stunning 17.6%. Inflation has created severe financial pressures for most US households, which are forced to pay more for everyday necessities like food & rent. The burden is disproportionately borne by low-income Americans, whose already-stretched paychecks are heavily impacted by price fluctuations.
US consumer sentiment drops again on inflation fears
Treasury yields were broadly higher as markets reopen following the Thanksgiving break. The benchmark 10-year Treasury yield was 5 basis points higher at 4.466%, pulling away from the 2-month low reached before the holiday & the 2-year note yield rose by 2 basis points to 4.933%. Yields & prices move in opposite directions & 1 basis point equals 0.01%. Investors are continuing to assess the outlook for interest rates & the economy after the Federal Reserve's latest meeting minutes gave no indication of rate cuts in the near future. Markets are pricing in a 99.5% chance of rates being held in the current 5.25-5.50% range at the final Fed meeting in Dec, according to CME Group's FedWatch tool. Fri, which is a shortened trading day, will provide insight into US business activity across services & manufacturing with the release of S&P Global flash purchasing managers' index figures.
Treasury yields nudge higher after Thanksgiving holiday
Gold was on track to notch a 2nd weekly gain, supported by $ weakness as markets continued to price in expectations for looser monetary policy in the world's biggest economy next year. Bullion edged higher to trade just below the key level of $2000 an ounce, with strength buoyed by a sharp drop in the $ this month. Weakening US economic data & inflation has added to expectations the Federal Reserve will rapidly shift to rate cuts next year. Lower rates are positive for gold, which doesn't pay interest, while a weaker $ makes bullion less expensive for buyers in foreign currencies. The shift in the outlook has helped stem outflows from bullion-backed exchange-traded, which has been a persistent headwind to prices for months. Late investors will look to US purchasing managers indices as a gauge for the health of the economy. Weaker-than-expected readings could bolster bets on rapid rate cuts by the Fed next year. Spot gold is up chump change to $1994 an ounce, taking its weekly gain to 0.7%. The Bloomberg Dollar Spot Index was little changed, & is down 2.7% so far this month.
Gold Heads for Weekly Gain as Markets Bet on Fed Pivot in 2024
Oil held a decline after the OPEC+ alliance was forced to delay a critical meeting amid a dispute over output quotas, casting a pall of uncertainty over the group's production policy for next year. Global benchmark Brent was steady above $81 a barrel after dropping 1.3% over the previous 2 sessions, while US counterpart West Texas Intermediate was below $77 a barrel following the US Thanksgiving break. Saudi Arabia, the de facto leader of the OPEC+ members. The meeting initially planned for this weekend has been pushed back to Nov 30 & it'll be an online session instead of in-person. Crude is on course for a back-to-back monthly loss, with prices down about 16% from a high in late Sep. The drop has been driven by signs of increased supplies from non-OPEC+ countries, rising US stockpiles & the fading of the premium generated by the Israel-Hamas war. Meanwhile, the International Energy Agency sees the market tipping back into surplus next year. Brent for Jan settlement added pennies to $81.51 a barrel & WTI for Jan delivery was at $76.60 a barrel, 0.7% below the Wed close.
Oil Holds Decline as OPEC+ Dispute Clouds Outlook for ProductionDow is near the close, up 400 in this shortened week, & is up 2200 YTD. Next week serious trading resumes with a lot going on around the globe. Enjoy the holding weekend. 😀😀Dow Jones Industrials
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