Market Perspective for November 18, 2019

Equities were mixed on Monday. The S&P 500 set a new all-time high after gaining 0.05 percent. Consumer staples were the best performing sector. SPDR Consumer Staples (XLP) increased 0.52 percent. SPDR Consumer Discretionary (XLY) and SPDR Communication Services (XLC) both increased 0.35 percent.

The National Association of Homebuilders’ confidence index fell one point to 70 in November, yet still near multi-year highs. More housing data is due this week with October housing starts, building permits and existing home sales. iShares U.S. Home Construction (ITB) gained 1.02 percent on Monday.

iShares Edge MSCI Minimum Volatility USA (USMV) increased 0.25 percent on Monday.

iShares MSCI EAFE (EFA) gained 0.12 percent, while iShares MSCI Emerging Markets (EEM) fell 0.12 percent.

The minutes of the last Federal Reserve meeting are out on Wednesday. Fed Chairman Powell met with President Trump at the White House today.

Friday brings flash manufacturing PMIs and the University of Michigan’s consumer sentiment index. Analysts expect an uptick in PMIs and a small dip in consumer sentiment.

China signaled pessimism about trade talks after violent clashes with Hong Kong university students. A bill supporting the protestors is circulating in the Senate. China has indicated interference in Hong Kong could sink trade negotiations. The central bank cut interest rates in China after another bank needed rescue. It was the fifth bank bailed out this year and the third in the past month.

The U.S. Dollar Index fell 0.19 percent to start the week. Although the dollar has been stuck in neutral versus major currencies such as the euro, yen and Chinese yuan, it is threatening to breakout versus Latin American currencies.

Retailers look to build on their strong open to earnings season following Wal-Mart’s (WMT) positive report. Headliners this week include Target (TGT), The Home Depot (HD), TJX Companies (TJX), Kohls (KSS), Lowes (LOW),Urban Outfitters (URBN), Macy’s (M), Ross Stores (ROSS), Nordstrom (JWN), Gap (GPS), L Brands (LB), BJ’s Wholesale Club (BJ) and Foot Locker (FL).

Also reporting this week are Medtronic (MDT), Copart (CPRT), Jack in the Box (JACK), Pinduoduo (PDD), Intuit (INTU), Splunk (SPLK) and J.M. Smucker (SJM).


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