What We Are Watching This Week
- Housing Starts and Building Permits
- S&P Flash US Manufacturing and Services PMI
- Consumer Sentiment
Highlights From Last Week
- US Consumer Price Index
- US Producer Price Index
- US Retail Sales
Stocks retreated slightly after the previous week’s gains as uncertainty surrounding the incoming administration’s policies influenced market movements. Financials and energy sectors continued to gain on hopes for deregulation and increased merger approvals, while Bitcoin surged over 32% since the election, fuelled by expectations of looser regulation on digital currencies. In contrast, healthcare stocks, particularly biotech shares, dropped sharply after news that Robert F. Kennedy, Jr., a critic of the pharmaceutical industry and public health programs, was expected to be nominated as head of the Department of Health and Human Services. His potential oversight of major programs like Medicare and Medicaid contributed to investor concerns.
Canada’s main stock index closed lower on Friday, with broad declines driven by investor profit-taking amid expectations of a slower pace of U.S. Federal Reserve interest rate cuts. The TSX fell 158.99 points to close at 24,890.68 but managed to gain 131 points, or 0.5%, for the week. The Canadian dollar edged down by 0.14 cents to 70.98 cents U.S. On the economic front, Statistics Canada reported a 0.5% decline in manufacturing sales for September, primarily due to lower sales of petroleum and coal products and reduced aerospace production. Wholesale sales, excluding petroleum products and certain other commodities, increased by 0.8% to $82.3 billion in September. New motor vehicle sales rose slightly to 168,500 in September, up from 166,000 in August. Meanwhile, the Canadian Real Estate Association reported a 7.7% increase in MLS listings in October, marking the highest level since April 2022.
The pan-European STOXX Europe 600 Index declined by 0.69%, marking its fourth consecutive weekly loss, as concerns over the incoming Trump administration’s trade policies, political uncertainty in Germany, and Federal Reserve Chair Jerome Powell’s cautious stance on U.S. interest rates weighed on sentiment. Major stock indexes showed mixed performance: France’s CAC 40 fell 0.94%, Germany’s DAX was flat, Italy’s FTSE MIB gained 1.11%, and the UK’s FTSE 100 dipped slightly. Despite market concerns, euro area data supported optimism for a soft economic landing. Eurostat confirmed a strong 0.4% GDP expansion in the third quarter, and the European Commission forecast 0.8% growth for 2024, though Germany’s economy is projected to contract by 0.1%. Labor market data remained positive, with employment rising 0.2% in the third quarter, up from 0.1% growth in the previous quarter.
The Consumer Price Index for All Urban Consumers (CPI-U) increased by 0.2% in October on a seasonally adjusted basis, maintaining the same growth rate seen in the previous three months, according to the U.S. Bureau of Labor Statistics. Over the past 12 months, the all-items index rose by 2.6% before seasonal adjustment. The shelter index climbed 0.4% in October, contributing to more than half the overall monthly increase in the all-items index. The food index also saw a rise of 0.2%, with the food at home index increasing by 0.1% and the food away from home index up by 0.2%. Meanwhile, the energy index remained unchanged in October, following a 1.9% decline in September. Excluding food and energy, the core index increased by 0.3% in October, consistent with the gains recorded in August and September. Among the indexes showing increases were shelter, used cars and trucks, airline fares, medical care, and recreation, while apparel, communication, and household furnishings and operations registered declines. On an annual basis, the all-items index rose by 2.6% for the 12 months ending in October, up from a 2.4% increase for the 12 months ending in September. The core index (excluding food and energy) increased by 3.3% over the past year. The energy index decreased by 4.9% year-over-year, while the food index rose by 2.1%.1
The U.S. Labor Department reported on Thursday that for the week ending November 9, seasonally adjusted initial unemployment claims were reported at 217,000, marking a decrease of 4,000 from the previous week’s unrevised level of 221,000. The four-week moving average dropped to 221,000, down 6,250 from the prior week’s unrevised average of 227,250. The total number of continued claims for unemployment benefits across all programs for the week ending October 26 was 1,673,176, reflecting an increase of 30,622 from the prior week. In comparison, 1,633,474 claims were filed during the same week in 2023.2
According to the U.S. Bureau of Labor Statistics, the Producer Price Index (PPI) for final demand increased by 0.2% in October on a seasonally adjusted basis. This follows increases of 0.1% in September and 0.2% in August. On an unadjusted basis, the final demand index rose 2.4% over the 12 months ending in October. The October increase in final demand prices was largely driven by a 0.3% rise in the index for final demand services, while prices for final demand goods increased by 0.1%. Excluding food, energy, and trade services, the index for final demand rose 0.3% in October, compared to a 0.1% increase in September. Over the past 12 months, the index for final demand less food, energy, and trade services increased by 3.5%.3
The Federal Reserve of New York reported that business activity in New York State experienced significant growth in November, as reported in the Empire State Manufacturing Survey. The headline general business conditions index surged by 43 points to 31.2, marking its highest level in nearly three years. New orders and shipments saw substantial increases, reflecting strong demand, while delivery times were slightly longer, and supply availability declined modestly. Despite these adjustments, inventories remained stable. Labor market conditions pointed to steady employment levels and an average workweek increase. Input and selling price increases were moderate, maintaining a pace similar to the previous month. Firms expressed optimism about the six-month outlook, underscoring confidence in the continued growth of the manufacturing sector.4
Advance estimates for U.S. retail and food services sales in October 2024, adjusted for seasonal variation, holiday timing, and trading-day differences (but not for price changes), reached $718.9 billion. This represents a 0.4% increase from the previous month and a 2.8% increase from October 2023. For the August 2024 through October 2024 period, total sales rose 2.3% compared to the same period a year ago. Additionally, the percent change from August 2024 to September 2024 was revised upward, from 0.4% to 0.8% (±0.2%). Retail trade sales increased 0.4% from September 2024 and 2.6% from October 2023. Among key sectors, nonstore retailers reported a 7.0% increase from last year, while food services and drinking places saw a 4.3% rise compared to October 2023.5
| WK | Year to Date | |
| Dow | -1.24% | 15.27% |
| S&P500 | -2.08% | 23.08% |
| Nasdaq | -3.15% | 24.44% |
| S&P400 Mid-cap | -2.72% | 15.31% |
| Russell | -2.90% | 13.65% |
| TSX | 0.50% | 18.88% |
| Oil | -4.80% | -6.40% |
- https://www.bls.gov/news.release/cpi.nr0.htm
- https://www.dol.gov/ui/data.pdf
- https://www.bls.gov/news.release/ppi.nr0.htm
- https://www.newyorkfed.org/medialibrary/media/Survey/Empire/empire2024/ESMS_2024_11.pdf?sc_lang=en&hash=73D51BAD879777B9A1BFFCBDF85E4614
- https://www.census.gov/retail/sales.html
Important Information:
Warren Gerow is an independent investment wealth consultant to Sightline Wealth Management.
Sightline Wealth Management LP (“Sightline”) is an investment dealer and is a member of the Canadian Industry Regulation Organization (CIRO) and the Canadian Investor Protection Fund (CIPF).
Sightline provides management and investment advisory services to high-net-worth individuals and institutional investors. Sightline Wealth Management LP is a wholly owned subsidiary of Ninepoint Financial Group Inc. (“NFG Inc.”). NFG Inc. is also the parent company of Ninepoint Partners LP, it is an investment fund manager and advisor and exempt market dealer. By virtue of the same parent company, Sightline is affiliated with Ninepoint Partners LP. Information and/or materials contained herein is for information purposes only and does not constitute an offer to sell or solicitation to purchase securities of any issuer or any portfolio managed by Sightline Wealth Management or Ninepoint Partners, including Ninepoint managed funds.
The opinions and information contained in this article are those of Sightline Wealth Management (“Sightline”) as of the date of this article and are subject to change without notice. Sightline endeavours to ensure that the content has been compiled from sources that we believe to be reliable. The information is not meant to be used as the primary basis of investment decisions and should not be constructed as advice. Each investor should obtain independent advice before making any investment decisions.