Private Client Group

December 1st, 2016

The U.S. Sees Record Breaking Sales

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While Thanksgiving was last week, we have lots to be thankful for in this week’s headlines – with the U.S. consumer stronger than ever and U.S GDP for Q3 revised higher. Get the details in this edition of Steady Investor’s Week…

Record Breaking Sales – the U.S. consumer is stronger than ever, and that’s what matters most to economic growth. The consumer makes up just about two-thirds of the economy. Consumer strength showed in the famed Black Friday and Cyber Monday shopping days, as Black Friday registered a record $3.34 billion and Cyber Monday clocked in at $3.45 billion, according to Adobe Digital Insights. This represents a little over 12% year over year growth, which is a significant jump. It handily topped estimates for 9.4% growth.

U.S. GDP Revised Higher – Good news came in many forms this week, as U.S. GDP figures for Q3 were revised higher. The final estimate for growth came in at 3.2% for Q3, which is a big number relative to the average growth rate we’ve seen in this expansion. According to the Commerce Department, U.S. corporations benefited greatly from the broad-based growth, with after-tax earnings rising 5.2% in the quarter. The uptick in earnings for corporations marks the first year over year increase since 2014 (the Energy drag has finally faded), and also marks the strongest growth since Q4 of 2012.

Oil Prices Jump on OPEC Announcement – oil prices and oil/energy stocks saw a nice bump this week as OPEC surprised traders with an announcement to cut production. After a successful meeting in Vienna, it was announced that Saudi Arabia, Iran, and Russia were all in agreement about the cuts, which sent oil prices soaring some 12% to over $50 / barrel. It has been eight years since OPEC agreed to production cuts, and the disagreements between the three major players have been a major hurdle. Don’t go buying oil stocks just yet, though. An agreement is different than a production cut, so it remains to be seen whether OPEC countries follow through. What’s more, energy friendly policies under the Trump Administration may boost supply, which could keep downward pressure on prices.

Solid Manufacturing Numbers Across the World – It was a good month for manufacturing across the world, perhaps in a sign that global growth is stabilizing as the U.S. recovers from the energy drag and European growth gets a bump. The most common measure of manufacturing activity, the Purchasing Managers’ Index (PMI), stayed above 50 for China, the Eurozone, and the U.K. China saw a government-induced infrastructure buildout with PMI holding up at 51.7, the Eurozone remained strong at 53.7, and the U.K. remained expansionary at 53.4 (though that marks a cool off from 54.2 in October).

Big Trouble in Little South Korea – the political situation has turned negative in South Korea, as President Park Geun-hye remains embroiled in a corruption scandal. The democratically elected leader and ally to the United States has now asked parliament to find a way for her to relinquish power and shorten her term, but this feels like an effort to avoid being impeached and embarrassed on the global stage.

While the headlines this week’s sung a positive tune, many investors are still wondering what to expect from the market as the U.S. prepares for Trump to take office. To give you a deeper look into the current state of the market and what you can expect in 2017, download our Stock Market Outlook report by clicking on the link below:

Disclosure

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss.

Zacks Investment Management, Inc. is a wholly-owned subsidiary of Zacks Investment Research. Zacks Investment Management is an independent Registered Investment Advisory firm and acts an investment manager for individuals and institutions. Zacks Investment Research is a provider of earnings data and other financial data to institutions and to individuals.

This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. Do not act or rely upon the information and advice given in this publication without seeking the services of competent and professional legal, tax, or accounting counsel. The information contained herein has been obtained from sources believed to be reliable but we do not guarantee accuracy or completeness. Publication and distribution of this article is not intended to create, and the information contained herein does not constitute, an attorney-client relationship. No recommendation or advice is being given as to whether any investment or strategy is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole.
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