The Market Bull – November 26, 2019
The major averages closed with small gains on mixed news. The 3rd quarter earnings reporting season winds down and it looks to disappoint.
With nearly 95% of companies having reported 3rd quarter earnings, the results are very underwhelming. 3rd quarter earnings are expected to decline 2.3% and turn in the worst performance of 2019. The miss to expectations is also substantial as the quarter began with 5% earnings growth as pegged by the analysts, always an overly optimistic bunch.
New Home Sales missed expectations in October with a .7% decline to 733,000 units annualized. Still the figure is up an impressive 31.6% over October of 2018. At the regional level the West was the real standout with a sales gain of 7.1%, followed by the Midwest up 4.1%, the South and Northeast both fell. Month’s supply increased fractionally to 5.3, about normal. The median price increased 4.1% to $318,400. Lower interest rates are helping to drive sales but not to the extent that one would have expected.
The Richmond Fed Regional Index slipped 9 points in November to -1. Weakness was noted in new orders, employment and capital expenditure plans. The trade war, primarily with China, continues to weigh heavily on the Regional Fed Indexes and with another substantial tariff hurdle set for December 15th, the coast is far from clear.
The October International Trade in Goods balance was a surprisingly small 66.5 billion, the lowest figure in well over a year. Exports fell .73% to 135.3 billion, imports dropped 2.4% to 201.8 billion. The trade war has been instrumental in the nearly 7% reduction in imports on a year ago basis. With the next tariff round scheduled for December 15th primarily targeted at consumer goods, imports could well fall further.
Standard and Poors 500 Index closed at: 3,140.52 up 6.88
NASDAQ finished the day: 8,647.93 up 15.44
Gold ended trading at: $1,461.20 up $4.30