Month: November 2021

The Markets (as of market close November 26, 2021)

Thanksgiving week proved to be a tumultuous one for investors. Each of the benchmark indexes listed here ended the week in the red following news of a new COVID variant in South Africa. In response, several countries, including the United States, initiated travel bans and tightened border controls. Crude oil prices fell 13.5% in the week as the new coronavirus strain sparked fears that lockdowns would hurt global demand. The yield on 10-year Treasuries fell 10 basis points to close below 1.55% for the first time in several sessions.

A selloff in tech shares pulled the Nasdaq down 1.3% to open the week last Monday. The Russell 2000 fell 0.5%, the S&P 500 dipped 0.3%, and the Global Dow lost 0.1%. The Dow inched up 0.1%. Treasury yields advanced nearly 600 basis points to close at 1.62%. Crude oil prices increased 0.5% to $76.35 per barrel. The dollar rose, while gold prices slipped. The market sectors were mixed, with energy, financials, consumer staples, and utilities climbing higher, while communication services, information technology, consumer discretionary, real estate, and health care fell.

The Nasdaq (-0.5%) fell for the second consecutive day last Tuesday as tech stocks continued to tumble. Energy and financials led the market sectors, helping to push the S&P 500 up 0.2%. The Russell 2000 inched 0.2% lower, while the Dow (0.6%) and the Global Dow (0.2%) advanced. Ten-year Treasury yields rose, as bond prices fell. Crude oil prices increased ahead of a move by several countries, including the United States and China, to tap their strategic oil supplies. The dollar was mixed.

Gains in real estate and energy stocks helped drive the S&P 500 higher last Wednesday. The Nasdaq reversed course and led the benchmark indexes listed here, while the Global Dow and the Russell 2000 also posted gains. The Dow was unchanged on the day. Ten-year Treasury yields and crude oil prices dipped lower. The dollar advanced. Investors got mixed reports last Wednesday. The Federal Reserve released the minutes from its early November meeting and noted that it “would not hesitate to take appropriate actions to address inflation pressures.” Since that meeting, inflation has continued to rise, which could prompt the Fed to quicken the pace of tapering its bond purchasing program. On the other hand, consumer spending rose in October from a month earlier. But the biggest news was that the number of weekly claims for unemployment benefits dipped to its lowest level since 1969 (see below).

Stocks tumbled on Black Friday, the major shopping day after Thanksgiving, as investors reacted to news of another coronavirus variant identified in South Africa. Each of the benchmark indexes listed here fell by at least 2.0%, led by the Russell 2000 (-3.7%), followed by the Global Dow (-2.7%), the Dow (-2.5%), the S&P 500 (-2.3%), and the Nasdaq (-2.2%). Crude oil prices suffered one of the largest single-day plunges, dropping 13.1% to close the day at $68.15 per barrel. Ten-year Treasury yields fell to 1.48%. The dollar dipped lower. The market fallout was widespread, with each of the market sectors closing in the red. Energy (-4.0%) and financials (-3.3%) fell the furthest.

The national average retail price for regular gasoline was $3.395 per gallon on November 22, $0.004 per gallon less than the prior week’s price but $1.293 higher than a year ago. Gasoline production increased during the week ended November 19, averaging 10.1 million barrels per day. U.S. crude oil refinery inputs averaged 15.6 million barrels per day during the week ended November 19 — 243,000 barrels per day more than the previous week’s average. Refineries operated at 88.6% of their operable capacity, up from the prior week’s level of 87.9%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 11/26	Weekly Change	YTD Change
DJIA	30,606.48	35,601.98	34,899.34	-1.97%	14.03%
Nasdaq	12,888.28	16,057.44	15,491.66	-3.52%	20.20%
S&P 500	3,756.07	4,697.96	4,594.62	-2.20%	22.33%
Russell 2000	1,974.86	2,363.59	2,245.94	-4.98%	13.73%
Global Dow	3,487.52	4,057.43	3,962.95	-2.33%	13.63%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.58%	1.48%	-10 bps	57 bps
US Dollar-DXY	89.84	96.04	96.09	0.05%	6.96%
Crude Oil-CL=F	$48.52	$78.76	$68.15	-13.47%	40.46%
Gold-GC=F	$1,893.10	$1,861.20	$1,785.50	-4.07%	-5.68%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Gross domestic product increased at an annual rate of 2.1% in the third quarter of 2021, according to the second estimate released by the Bureau of Economic Analysis (BEA). GDP expanded at an annualized rate of 6.7% in the second quarter. The deceleration in GDP in the third quarter compared to the second was significantly impacted by a slowdown in personal consumption expenditures, which rose 1.7% in the third quarter compared to 12.0% in the second quarter. A few areas that increased in third-quarter GDP included private inventory investment (11.6% vs. -3.9% second quarter) and state and local government spending (4.7% vs. 0.2% second quarter). The personal consumption price index rose 5.3% in the third quarter.
• According to the latest data from the BEA, prices consumers spend on goods and services rose 0.6% in October and is up 5.0% over the past 12 months. Personal income increased 0.5%, while disposable personal income rose 0.3%. Consumer spending increased 1.3% in October.
• New orders for long-lasting durable goods fell for the second consecutive month in October, dropping 0.5%, following a 0.4% dip in September. Transportation equipment continued to be a drag on new orders, falling 2.6% in October after decreasing 2.8% the previous month. Excluding transportation, new orders for durable goods actually advanced 0.5%. Excluding defense, new orders rose 0.8% in October. Some items of note include new orders for communications equipment, which rose 7.9%; motor vehicles and parts advanced 4.8%; and new orders for electrical equipment, appliances, and components increased 1.2%. On the other hand, new orders for nondefense aircraft and parts fell 14.5%, defense aircraft and parts dropped 21.8%, and defense capital goods decreased 20.1%.
• The trade deficit for goods (excluding services) was $82.9 billion in October, down $14.1 billion, or 14.6%, from the September figure. Exports rose by $15.3 billion, or 10.7%, while imports increased $1.1 billion, or 0.5%. The jump in exports was spread across several sectors, led by industrial supplies (16.6%) and automotive vehicles (14.4%). Imports were driven higher by a 5.7% increase in automotive vehicles.
• According to the latest survey from the National Association of Realtors®, sales of existing homes rose 0.8% in October, following a 7.0% jump in September. Nevertheless, existing home sales were 5.8% lower than the October 2020 total. Housing inventory dipped 0.8% in October, representing a 2.4-month supply at the current sales pace. The October median existing-home price was $353,900, up slightly from the $351,200 price in September. Year over year, the median existing-home price was 13.1% over the October 2020 price. Sales of existing single-family homes climbed 1.3% last month but were down 5.8% from October 2020. The median existing single-family home price was $360,800 ($357,900 in September), up 13.5% from October 2020. The inventory of existing single-family homes for sale in October represented a 2.3-month supply, unchanged from the September figure.
• Sales of new single-family homes also rose in October, increasing 0.4% over the September rate. New home sales were 23.1% below the October 2020 pace. The median sales price of new houses sold in October was $407,700. The average sales price was $477,800. Inventory sits at a supply of 6.3 months at the current sales pace.
• For the week ended November 20, there were 199,000 new claims for unemployment insurance, a decrease of 71,000 from the previous week’s level, which was revised up by 2,000. This is the lowest level for initial claims since November 15, 1969, when it was 197,000. While encouraging, the drop in jobless claims may be attributable to several factors. Seasonal hires for the holiday shopping season increased the number of hires. This data was released a day early to accommodate Thanksgiving and is likely to be revised next week. And, customary layoffs related to end-of-year cost cutting are being replaced by businesses retaining employees in lieu of unfilled job openings. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended November 13 was 1.5%, a decrease of 0.1 percentage point from the previous week’s revised rate. The advance number of those receiving unemployment insurance benefits during the week ended November 13 was 2,049,000, a decrease of 60,000 from the prior week’s level, which was revised up by 29,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, last year at this time, there were 762,000 initial claims for unemployment insurance, and the rate for unemployment claims was 4.2%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended November 6 were the Virgin Islands (3.0%), Alaska (2.7%), the District of Columbia (2.7%), Puerto Rico (2.7%), California (2.6%), New Jersey (2.5%), Hawaii (2.1%), Nevada (2.1%), Illinois (1.9%), and New York (1.8%). The largest increases in initial claims for the week ended November 13 were in California (+4,690), Massachusetts (+2,269), Pennsylvania (+1,994), Minnesota (+1,202), and Wisconsin (+907), while the largest decreases were in Kentucky (-8,712), Tennessee (-4,001), Ohio (-3,315), Michigan (-3,230), and Illinois (-1,184).

Eye on the Week Ahead

The purchasing managers’ manufacturing and services reports for November are available this week. Respondents have noted that while the manufacturing and services sectors continue to expand, each area has been impacted by supply bottlenecks and labor shortages. Those issues are expected to remain through the year, which will further drive cost inflation. The November employment figures are also out at the end of this week. Over 500,000 new jobs were added in October, and hourly wages rose by 0.4%.

The Markets (as of market close November 19, 2021)

Stocks closed last week mixed, with the Nasdaq and the S&P 500 posting gains, while the Russell 2000, the Global Dow, and the Dow fell. Another round of strong corporate earnings data was enough to overcome investor concerns that rising inflation might accelerate the withdrawal of economic stimulus, while a resurgence of COVID-19 cases in Europe could lead to more lockdowns, stalling economic recovery. Ten-year Treasury yields ended the week where they began. Crude oil prices declined more than 2.5% to $78.76 per barrel. The dollar rose, while gold prices dipped lower. Consumer discretionary led the market sectors, advancing 3.8%, while information technology rose 2.4%. Energy fell 5.2%.

Stocks closed marginally lower to begin the week last Monday. The Russell 2000 dipped 0.5%, while the remaining benchmark indexes listed here fell by less than 0.1%. Ten-year Treasury yields increased to close at 1.62%. The dollar and crude oil prices advanced slightly. The market sectors were also mixed, with energy and utilities showing strength, while information technology, health care, and materials lagged.

Last Tuesday, equities rose following strong economic data. The majority of the benchmark indexes listed here posted solid gains after strong retail sales figures, a solid industrial production report, and favorable corporate earnings results. Only the Global Dow dipped lower, while the Nasdaq (0.8%), the S&P 500 (0.4%), the Russell 2000 (0.2%), and the Dow (0.2%) gained. Crude oil prices declined, while the dollar and 10-year Treasury yields climbed higher.

Last Tuesday’s momentum for stocks didn’t carry over to Wednesday, as each of the benchmark indexes ended the day in the red. The Russell 2000 led the decline, falling 1.2%, followed by the Dow (-0.6%), the Nasdaq (-0.3%), the S&P 500 (-0.3%), and the Global Dow (-0.3%). Along with rising inflation, housing starts slowed in October as builders wrestled with rising material prices and labor shortages. Ten-year Treasury yields and the dollar fell. Crude oil prices dipped below $80.00 per barrel, closing the day at around $78.00 per barrel. Consumer discretionary, real estate, and health care were the only sectors to advance. Energy (-1.7%) and financials (-1.1%) fell the furthest.

Consumer discretionary and information technology shares helped push the Nasdaq (0.5%) and the S&P 500 (0.3%) higher last Thursday. The Russell 2000 (-0.6%), the Global Dow (-0.4%), and the Dow (-0.2%) fell. Treasury yields and the dollar slid, while crude oil prices advanced marginally.

Wall Street was driven lower last Friday as economically sensitive market sectors, such as energy, financials, and health care, fell. Among the benchmark indexes listed here, only the Nasdaq was able to post a gain. The Russell 2000 and the Global Dow dipped 0.9%, while the Dow dropped 0.8%. The S&P 500 inched slightly lower by the close of trading. Ten-year Treasury yields and crude oil prices decreased, while the dollar advanced.

The national average retail price for regular gasoline was $3.399 per gallon on November 15, $0.011 per gallon less than the prior week’s price but $1.288 higher than a year ago. Gasoline production decreased during the week ended November 12, averaging 9.9 million barrels per day. U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ended November 12 — 32,000 barrels per day more than the previous week’s average. Refineries operated at 87.9% of their operable capacity, up from the prior week’s level of 86.7%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 11/19	Weekly Change	YTD Change
DJIA	30,606.48	36,100.31	35,601.98	-1.38%	16.32%
Nasdaq	12,888.28	15,860.96	16,057.44	1.24%	24.59%
S&P 500	3,756.07	4,682.85	4,697.96	0.32%	25.08%
Russell 2000	1,974.86	2,411.78	2,363.59	-2.00%	19.68%
Global Dow	3,487.52	4,134.92	4,057.43	-1.87%	16.34%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.58%	1.58%	0 bps	67 bps
US Dollar-DXY	89.84	95.11	96.04	0.98%	6.90%
Crude Oil-CL=F	$48.52	$80.84	$78.76	-2.57%	62.32%
Gold-GC=F	$1,893.10	$1,868.00	$1,861.20	-0.36%	-1.69%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Retail sales continued to climb in October, increasing 1.7% after rising 0.8% (revised higher) in September. Retail sales have advanced 16.3% since October 2020. Retail trade sales rose 1.9% in October and are up 14.8% for the year. Gasoline station sales increased 3.9% in October and 46.8% from October 2020, while food services and drinking places were flat in October but have increased 29.3% from last year. This data seems to indicate that consumers are willing to spend, even at higher prices.
• Import prices rose 1.2% last month, the largest monthly increase since May 2021. Prices for imports have risen 10.7% since October 2020, the largest 12-month increase since the year ended in June 2021. Contributing to the import price increase was an 8.1% jump in petroleum prices. Natural gas prices advanced 19.7% in October. Overall, import fuel prices increased 86.7% over the past 12 months. Petroleum prices have risen 86.1% for the year, while natural gas prices have risen 134.0%. Export prices advanced 1.5% in October, the largest one-month increase since May 2021. Export prices have increased 18.0% over the 12 months ended in October. Agricultural export prices (1.0%) and nonagricultural prices (1.5%) increased in October.
• Industrial production rose 1.6% in October after falling 1.3% in September. Much of the October increase was reflective of the recovery from the effects of Hurricane Ida. Manufacturing output rose 1.2% last month, while factory output moved up 0.6%. Overall, total industrial production in October was 5.1% above its year-earlier level and the highest since December 2019.
• The number of building permits for new residential construction rose by 4.0% in October. Building permits for single-family construction increased 2.7%. Overall, the number of building permits issued for residential construction is 3.4% above the October 2020 rate. Housing starts dipped 0.7% last month, while single-family housing starts slid 3.9%. Housing completions were essentially unchanged in October from the previous month but are 8.4% below the October 2020 pace. Single-family home completions fell 1.7% in October.
• For the week ended November 13, there were 268,000 new claims for unemployment insurance, a decrease of 1,000 from the previous week’s level, which was revised up by 2,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended November 6 was 1.5%, a decrease of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended November 6 was 2,080,000, a decrease of 129,000 from the prior week’s level, which was revised up by 49,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, last year at this time, there were 732,000 initial claims for unemployment insurance, and the rate for unemployment claims was 4.4%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended October 30 were the District of Columbia (3.5%), Puerto Rico (3.5%), California (3.0%), Alaska (2.5%), Hawaii (2.5%), Illinois (2.5%), New Jersey (2.4%), Nevada (2.2%), the Virgin Islands (2.2%), and Oregon (1.9%). The largest increases in initial claims for the week ended November 6 were in Kentucky (+6,716), Ohio (+3,846), Tennessee (+2,411), Illinois (+1,893), and Michigan (+1,564), while the largest decreases were in California (-4,222), the District of Columbia (-1,794), and Louisiana (-1,028).

Eye on the Week Ahead

Thanksgiving week is filled with important economic reports, led by the second estimate of the third-quarter GDP. The initial estimate showed the economy expanded at a rate of 2.0%, well off the pace of 6.7% set in the second quarter. The report on personal income and outlays for October is also out this week. Although personal income fell 0.1% in September, consumer spending increased 0.6%, and consumer prices rose 0.3%. Finally, the housing sector is front and center with the latest data on sales of new and existing homes. Sales of both new and existing homes soared in September, increasing 14.0% and 7.0%, respectively.

The Markets (as of market close November 12, 2021)

Although equities closed last week on a high note, it wasn’t enough to recover from mid-week losses. Each of the benchmark indexes lost ground, with the Russell 2000 falling over 1.0% to lead the pack. Inflation concerns seemed to weigh on investors’ minds during the week. While the Federal Reserve continues to suggest that inflationary pressures will calm by next year, traders may be concerned that if prices continue to rise, the Fed may consider hiking interest rates as soon as the summer of 2022. Ten-year Treasury yields edged higher. The dollar advanced, while crude oil prices fell to $80.84 per barrel. Gold prices rose for the second consecutive week, jumping nearly 2.7%. Materials led the market sectors, climbing 2.5% for the week. Consumer discretionary (-3.2%), energy (-1.7%), and utilities (-1.0%) fell the furthest.

Several of the benchmark indexes listed here reached new highs last Monday. The Dow finished up 0.3%, the S&P 500 and the Nasdaq eked out 0.1% gains, while the Russell 2000 advanced 0.2%. These advances drove each of these indexes to record highs. Among the market sectors, materials and energy led the winners, while utilities, consumer discretionary, and consumer staples fell. Ten-year Treasury yields and crude oil prices climbed higher, while the dollar dipped lower.

Stocks retreated from their longest rally since 2017 last Tuesday, as the benchmark indexes dipped from their all time highs. Consumer discretionary, financials, information technology, and health care dragged the S&P 500 lower, falling 0.4% by the close of trading. The Dow declined 0.3%, the Nasdaq and the Russell 2000 each lost 0.6%, and the Global Dow slid 0.3%. The yield on 10-year Treasuries fell to 1.43% — its lowest end-of-day rate since mid-September. Crude oil prices rose nearly 3.0%, while the dollar was mixed.

Rising inflation data shook the markets last Wednesday. Ten-year Treasury yields rose by nearly 9.0%, while the Nasdaq and the Russell 2000 each fell by about 1.6%. The S&P 500 dipped 0.8%, the Dow slipped 0.7%, and the Global Dow fell 0.5%. The dollar climbed higher, while crude oil prices fell to $81.31 per barrel, down 3.4% from the previous day’s value. Gold prices gained 1.2%. Several of the market sectors declined, led by energy (-3.0%), followed by information technology (-1.7%) and communication services (-1.3%). Consumer staples, health care, and utilities were the only sectors to close the day in the black.

Last Thursday was Veterans Day, an unusual trading day in the United States. Stock markets are open, but bond markets are closed. Tech stocks led a comeback in the Nasdaq, pushing that index up 0.5% last Thursday. The Russell 2000 also recovered some of the previous day’s losses after advancing 0.8%. The large caps didn’t fare quite as well. The S&P 500 inched up 0.1%, while the Dow fell 0.4%. The Global Dow dipped 0.1%. Crude oil prices decreased for the second consecutive day, falling to $81.12 per barrel. The dollar rose 0.3%.

Last Friday saw stocks post solid gains. The Nasdaq added 1.0%, followed by the S&P 500 (0.7%), the Dow (0.5%), the Global Dow (0.2%), and the Russell 2000 (0.1%). Ten-year Treasury yields advanced, while crude oil prices and the dollar fell. The market sectors were mixed on the day, with communication services and information technology gaining more than 1.0%, while energy and utilities dipped lower.

The national average retail price for regular gasoline was $3.410 per gallon on November 8, $0.020 per gallon more than the prior week’s price and $1.314 higher than a year ago. Gasoline production decreased during the week ended November 5, averaging 10.1 million barrels per day. U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ended November 5 — 343,000 barrels per day more than the previous week’s average. Refineries operated at 86.7% of their operable capacity, up from the prior week’s level of 86.3%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 11/12	Weekly Change	YTD Change
DJIA	30,606.48	36,327.95	36,100.31	-0.63%	17.95%
Nasdaq	12,888.28	15,971.59	15,860.96	-0.69%	23.06%
S&P 500	3,756.07	4,697.53	4,682.85	-0.31%	24.67%
Russell 2000	1,974.86	2,437.08	2,411.78	-1.04%	22.12%
Global Dow	3,487.52	4,154.51	4,134.92	-0.47%	18.56%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.45%	1.58%	13 bps	67 bps
US Dollar-DXY	89.84	94.22	95.11	0.94%	5.87%
Crude Oil-CL=F	$48.52	$81.40	$80.84	-0.69%	66.61%
Gold-GC=F	$1,893.10	$1,819.00	$1,868.00	2.69%	-1.33%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• Inflation data for October was hotter than expected. The Consumer Price Index jumped 0.9% in October after increasing 0.4% the previous month. Over the last 12 months ended in October, consumer prices have risen 6.2% — the largest 12-month increase since November 1990. Consumer prices less food and energy rose 4.6% over the last 12 months, the largest 12-month increase since August 1991. The October CPI advance was broad-based, with increases in energy (4.8%), shelter (0.5%), food (0.9%), used cars and trucks (2.5%), and new vehicles (1.4%) among the larger contributors. Gasoline prices increased 6.1% and prices for fuel oil rose 12.3%.
• Prices that producers are charged for goods and services continued to climb higher in October. According to the latest report from the Bureau of Labor Statistics, producer prices rose 0.6% last month, after advancing 0.5% in September and 0.7% in August. Producer prices have risen 8.6% for the 12 months ended in October. Prices less foods, energy, and trade services moved up 0.4% in October after increasing 0.1% in September. For the 12 months ended in October, producer prices less foods, energy, and trade services rose 6.2%. Over 60% of the October increase in producer prices can be traced to a 1.2% rise in goods prices. Producer prices for services increased 0.2%. Driving the increase in goods prices was a 4.8% jump in energy prices. In particular, prices for gasoline rose 6.7% in October. A 0.4% increase in trade services accounted for nearly 75% of the increase in producer prices for services.
• The Treasury budget deficit for October, the first month of fiscal year 2022, was $165.1 billion. The deficit for the previous October was $284.1 billion, or 42%, greater. Government receipts totaled $283.9 billion, while expenditures were $449.0 billion. Compared to October 2020, individual income tax receipts rose 32.0%, while corporate tax receipts jumped 72.0%.
• According to the latest Job Openings and Labor Turnover Summary, there were 10.4 million job openings in September, a reduction of less than 200,000 from the previous month’s total. Job openings increased in health care and social assistance (+141,000); state and local government, excluding education (+114,000); wholesale trade (+51,000); and information (+51,000). Job openings decreased in state and local government education (-114,000); other services (-104,000); real estate and rental and leasing (-65,000); and educational services (-45,000). In September, hires and total separations were little changed at 6.5 million and 6.2 million, respectively.
• For the week ended November 6, there were 267,000 new claims for unemployment insurance, a decrease of 4,000 from the previous week’s level, which was revised up by 2,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended October 30 was 1.6%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended October 30 was 2,160,000, an increase of 59,000 from the prior week’s level, which was revised down by 4,000. For comparison, last year at this time, there were 728,000 initial claims for unemployment insurance, and the rate for unemployment claims was 4.6%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended October 23 were Puerto Rico (3.7%), California (2.8%), the District of Columbia (2.5%), New Jersey (2.5%), the Virgin Islands (2.5%), Alaska (2.4%), Hawaii (2.8%), Illinois (2.2%), Nevada (2.2%), and Oregon (1.9%). The largest increases in initial claims for the week ended October 30 were in Kentucky (+2,882), Louisiana (+907), Minnesota (+885), Tennessee (+798), and New Jersey (+768), while the largest decreases were in Missouri (-3,014), Florida (-2,286), Virginia (-1,482), Oklahoma (-1,324), and Pennsylvania (-1,026).

Eye on the Week Ahead

More inflation data for October is available this week with the release of the retail sales report and import and export prices. Also worth watching is the Federal Reserve’s report on industrial production. September saw industrial production slip 1.3%, with manufacturing output falling 0.7%. That followed August, which saw industrial production fall 0.1% (revised).

The Markets (as of market close November 5, 2021)

The first week of November saw stocks climb higher on the strength of favorable corporate earnings data, strong job growth, a dovish policy statement from the Federal Reserve, and favorable news on the battle against COVID-19. Several of the benchmark indexes listed here reached record highs. The Russell 2000 led the indexes for the week, followed by the Nasdaq, the S&P 500, the Global Dow, and the Dow. Ten-year Treasury yields dipped for the second consecutive week. The dollar inched higher, while crude oil prices fell. Several of the market sectors trended higher, led by consumer discretionary (5.0%), information technology (3.3%), and materials (3.2%).

Energy and consumer discretionary stocks helped drive the S&P 500 to another record high last Monday. Third-quarter corporate earnings data has continued to be strong, with results of more than 80% of the reporting companies in the S&P 500 exceeding estimates. Stocks have generally rallied since earnings season began a few weeks ago, despite ongoing and persistent supply-chain bottlenecks that have weighed on manufacturers. Also posting gains were the small caps of the Russell 2000 (2.7%), the Global Dow (1.0%), the Nasdaq (0.6%), and the Dow (0.3%). Treasury yields were flat, the dollar fell, and crude oil prices increased.

Last Tuesday, the Dow (0.4%) closed above 36,000 for the first time ever, while the S&P 500 (0.4%) and the Nasdaq (0.3%) also reached record highs. The Russell 2000 rose 0.2%, while the Global Dow dropped 0.2%. Ten-year Treasury yields fell to 1.54%. The dollar climbed higher, while crude oil prices declined. The best performing market sectors were materials, real estate, information technology, consumer staples, and health care.

Wall Street continued to trend higher last Wednesday after the Federal Reserve’s policy announcement matched expectations. The Russell 2000 gained 1.8%, followed by the Nasdaq (1.0%), the S&P 500 (0.7%), the Global Dow (0.4%), and the Dow (0.3%). With Wednesday’s gains, the S&P 500, the Dow, the Nasdaq, and the Russell 2000 each closed at record highs, a feat not seen since the beginning of 2018. The market sectors generally performed well, with only energy (-0.8%) and utilities (-0.3%) falling. Consumer discretionary (1.8%) and materials (1.1%) gained the most. Bond prices fell, pushing yields higher. The dollar and crude oil prices declined.

The Nasdaq and the S&P 500 rose to new all time highs last Thursday, while the Dow, the Russell 2000, and the Global Dow slipped lower. Ten-year Treasury yields fell to 1.52%. The dollar rose, while crude oil prices fell below $80.00 to $79.21 per barrel. The market sectors were mixed, with consumer discretionary and information technology advancing 1.5%, while financials and real estate dipped more than 1.0%.

Stocks closed last week on a high note, with the Dow, the Russell 2000, the Nasdaq, and the S&P 500 reaching record highs. Strong jobs data and encouraging news about the viability of an antiviral pill for COVID-19 helped equities extend recent gains. The Russell 2000 advanced nearly 1.5%, followed by the Dow (0.6%), the Global Dow (0.5%), the S&P 500 (0.4%), and the Nasdaq (0.2%). Health care was the only market sector to recede. Energy jumped 1.4% to lead the gainers. Treasury yields and the dollar slid, while crude oil prices climbed back above $80.00 per barrel, closing around $81.40.

The national average retail price for regular gasoline was $3.390 per gallon on November 1, $0.007 per gallon more than the prior week’s price and $1.278 higher than a year ago. Gasoline production increased during the week ended October 29, averaging 10.2 million barrels per day. U.S. crude oil refinery inputs averaged 15.0 million barrels per day during the week ended October 29 — 25,000 barrels per day less than the previous week’s average. Refineries operated at 86.3% of their operable capacity, up from the prior week’s level of 85.1%.

Stock Market Indexes

Market/Index	2020 Close	Prior Week	As of 11/5	Weekly Change	YTD Change
DJIA	30,606.48	35,819.56	36,327.95	1.42%	18.69%
Nasdaq	12,888.28	15,498.39	15,971.59	3.05%	23.92%
S&P 500	3,756.07	4,605.38	4,697.53	2.00%	25.07%
Russell 2000	1,974.86	2,297.19	2,437.08	6.09%	23.41%
Global Dow	3,487.52	4,091.61	4,154.51	1.54%	19.13%
Fed. Funds target rate	0.00%-0.25%	0.00%-0.25%	0.00%-0.25%	0 bps	0 bps
10-year Treasuries	0.91%	1.55%	1.45%	-10 bps	54 bps
US Dollar-DXY	89.84	94.12	94.22	0.11%	4.88%
Crude Oil-CL=F	$48.52	$83.27	$81.40	-2.25%	67.77%
Gold-GC=F	$1,893.10	$1,784.20	$1,819.00	1.95%	-3.91%

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic News

• October saw 531,000 new jobs added, the unemployment rate dipped 0.2 percentage point to 4.6%, and the number of unemployed dropped 255,000 to 7.4 million. The number of unemployed and the unemployment rate continue to trend downward, but they remain above their levels prior to the pandemic (3.5% and 5.7 million, respectively, in February 2020). Thus far this year, monthly job growth has averaged 582,000. Employment has increased by 18.2 million since April 2020 but is down by 4.2 million, or 2.8%, from its pre-pandemic level in February 2020. Notable job gains occurred in leisure and hospitality, in professional and business services, in manufacturing, and in transportation and warehousing. Employment in public education declined over the month. The labor force participation rate in October, at 61.6%, was unchanged from the previous month. The employment-population ratio inched up 0.1 percentage point in October to 58.8%. Among the unemployed, 840,000 voluntarily left their jobs, up 52,000 from the September figure. Conversely, the number of persons not in the labor force who currently want a job was 6.0 million in October, essentially unchanged over the month but up by 968,000 since February 2020. In October, 11.6% of employed persons teleworked because of the pandemic, down from 13.2% in the prior month. In October, 3.8 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic, down from 5.0 million in September. Average hourly earnings increased by $0.11 to $30.96 in October. Over the past 12 months, average hourly earnings have increased 4.9%. The average workweek decreased by 0.1 hour to 34.7 hours in October.
• There were no surprises following the Federal Open Market Committee’s meeting last week. The target range for the federal funds rate will remain at its present 0.00%-0.25%. However, in light of the substantial further progress the economy has made toward the Committee’s goals since last December, the Committee decided to begin reducing the monthly pace of its net asset purchases by $10 billion for Treasury securities and $5 billion for agency mortgage-backed securities, beginning later this month.
• Capacity constraints, transportation delays, rising material costs, and labor shortages continued to impact manufacturers in October, according to the latest survey of purchasing managers from IHS Markit. The IHS Markit U.S. Manufacturing Purchasing Managers’ Index™ (PMI™) posted 58.4 in October, down from 60.7 in September. Although manufacturing increased (a reading of 50.0 and above signifies growth) in September, the PMI™ was the weakest in 10 months.
• While the manufacturing sector may be feeling the effects of supply bottlenecks, service providers enjoyed a strong October. The IHS Markit US Services PMI Business Activity Index registered 58.7 in October, up from 54.9 in September. Survey respondents noted a steep upturn in business activity in October, with the rise in output the quickest in three months. New business expanded, supported by a rise in new orders. Nonetheless, concerns regarding labor shortages and unstable supply chains led business confidence to drop to an eight-month low. The rate of cost inflation eased to an eight-month low, despite being quicker than any pace of increase since before March 2021. In response to a further rise in costs, firms raised their selling prices at the fastest rate on record.
• The September goods and services trade deficit was $80.9 billion, up $8.1 billion, or 11.2%, from the August deficit. Exports fell $6.4 billion, or 3.0%, while imports rose $1.7 billion, or 0.6%. Year to date, the goods and services deficit increased $158.7 billion, or 33.1%, from the same period in 2020. Exports increased $274.1 billion, or 17.4%. Imports increased $432.8 billion, or 21.1%.
• For the week ended October 30, there were 269,000 new claims for unemployment insurance, a decrease of 14,000 from the previous week’s level, which was revised up by 2,000. This is the lowest level for initial claims since March 14, 2020, when it was 256,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended October 23 was 1.6%, a decrease of 0.1 percentage point from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended October 23 was 2,105,000, a decrease of 134,000 from the prior week’s level, which was revised down by 4,000. This is the lowest level for insured unemployment since March 14, 2020, when it was 1,770,000. For comparison, last year at this time, there were 765,000 initial claims for unemployment insurance, and the rate for unemployment claims was 4.8%. During the last week of February 2020 (pre-pandemic), there were 219,000 initial claims for unemployment insurance, and the number of those receiving unemployment insurance benefits was 1,724,000. States and territories with the highest insured unemployment rates for the week ended October 16 were Puerto Rico (4.2%), California (2.9%), Hawaii (2.8%), Illinois (2.8%), New Jersey (2.5%), the Virgin Islands (2.5%), Alaska (2.4%), the District of Columbia (2.3%), Nevada (2.3%), and Pennsylvania (2.0%). The largest increases in initial claims for the week ended October 23 were in the District of Columbia (+3,875), Kentucky (+2,940), Missouri (+2,048), Florida (+1,307), and Oklahoma (+1,256), while the largest decreases were in California (-13,138), Georgia (-4,107), Michigan (-2,505), Pennsylvania (-1,245), and Tennessee (-794).

Eye on the Week Ahead

Inflation data for October is available this week with the release of the Producer Price Index and the Consumer Price Index. Prices at the producer level have risen at a faster pace than consumer prices. The PPI jumped 0.5% in September and is up 8.6% over the past 12 months. The CPI advanced 0.4% in September and has risen 5.4% since last September.