Market Perspective for November 9, 2018

The Dow Jones Industrial Average led the stock market rally this week with a 3.02-percent gain. SPDR Healthcare (XLV) rose 4.13 percent. SPDR Utilities (XLU) and SPDR Consumer Staples (XLP) increased 3.22 and 3.12 percent, respectively.

Economic expansion continued in October. Services PMIs reflected a consistently high growth rate. Weekly jobless claims were 214,000, down 1,000 from the prior week and still close to four-decade lows.

Job openings came down slightly in September, from 7.3 million to 7.0 million. This still exceeds the number of unemployed Americans by more than 1 million.

Consumer sentiment eased in early November, but it beat expectations and income expectations increased.

Odds of a December rate hike ended the week at 76 percent. Libor and 3-month Libor both rose this week as investors start pricing in the hike. The 2-year treasury yield climbed towards 3 percent.

Crude oil sold off sharply this week and lost the $60 level on Friday before recovering it. Crude has lost 22 percent from its early October peak of $77 per barrel. Natural gas spiked nearly 15 percent this week as traders anticipate a stretch of cold weather.

The U.S. Dollar Index rallied 0.4 percent this week. It gained against emerging-market currencies as well. iShares MSCI Emerging Markets (EEM) hit resistance with a 2.52-percent decline on the week and lost 5 percent from Wednesday high to Friday low. iShares MSCI EAFE (EFA) gained 0.11 percent. SPDR S&P 500 (SPY) advanced 2.18 percent.

Disney (DIS) delivered strong earnings this week and announced its new streaming service, Disney+. The service, a combination of its Hulu assets along with its large category of film and television, will expand and launch overseas next year. The news sent Netflix (NFLX) down 1.82 percent on the week.


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