The Market Bull – December 2, 2019
Trade war jitters, threats of retaliation and counter retaliation sent the major averages into the close with large losses on disappointing economic data.
The November Institute for Supply Management manufacturing index missed expectations despite a .2-point gain to 48.1 spending a 4th consecutive month in the red. The sub-components were unremarkable but showed broad declines. Price data fell for a 6th consecutive month. Indeed, it would seem that price data is likely to remain under considerable downward pressure in the broader economy as housing costs slacken due to a combination of lower rents and prices. If the incoming data is anything to go by.
Construction spending missed expectations substantially in November falling .8% instead of the .5% gain that was expected. All 3 broad types of construction fell, residential slipped .9%, non-residential dropped 1.2% and public construction declined .2%. September construction spending was revised down to -0.3% from its original print of a 0.5% increase. The opposite was the true for August with total construction outlays revised up to a 1% gain from a decline of 0.3% originally. Even with a string of below-consensus months, construction spending is once again above its year-ago level. Most notably, both total residential and nonresidential outlays are up from a year earlier, but softness in nonresidential private spending is dragging on the headline figure.
Core Logic reports that home prices advanced 3.5% in September from a year ago, continuing the uptrend for the series began in July. For the month prices gained .4%. Of the ten Metropolitan Statistical Areas or MSA’s covered by the report on a monthly basis, Philadelphia down .5% and Chicago -.3% were the worst performers. At the other end of the scale Dallas and Phoenix both advanced .4% while Washington DC increased .3%.
Standard and Poors 500 Index closed at: 3,113.87 down 27.11
NASDAQ finished the day: 8,567.99 down 97.48
Gold ended trading at: $1,468.00 down $4.70