In the Markets: Week-Ending November 27, 2015
Newsletter: In the Markets – Week-Ending November 27
Crystal Brook Advisors
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United States: Energy stocks fell alongside oil prices, while Walt Disney Co. DIS, -shares fell today 2.98% after the media giant said in a regulatory filing that its ESPN sports network lost 3 million subscribers this year (1) and about 7 million over the last two years (1). Healthcare conglomerates continue merging at a fast pace with Pfizer and Allergan deal. Consumer confidence comes in lower than expected.
Europe: European stocks fell Friday, pulling back from three month highs, with mining shares feeling the weight from the worst rout in Chinese equities since late August. European Union proposes more fiscal risk sharing among the members but the stronger economies may not accept it. The Stoxx Europe 600 SXXP, -0.19% dropped 0.5% to 382.42, with nearly all sectors losing ground, led by the basic materials group SXPR, -3.10% (2). European Union proposes more fiscal risk sharing, but stronger economies push back.
Asia: The Shanghai Composite Index SHCOMP, -5.48% fell 5.5% to 3,436.30, the largest daily percentage loss since Aug. 18. The losses wiped out most of Shanghai’s gains this month and the index remains down 38% from a June peak.
• The National Home Price Index up 0.8% in September, with the year over year rate increasing to 4.9% (3) Existing home sales fell 3.4 percent in October to a 5.36 million unit annual pace (3). Sales continue to be restrained by unusually low inventories. The median price of a home sold has risen 5.8 percent year to year.
• Pfizer and Allergan deal at $152 Billion is not only biggest M&A deal in Healthcare but largest acquisition to date. Potential legislative review of corporate inversion and could lead to spinoff of Pfizer into 2 components, one for higher growth brand name drugs and other for mature drugs.
• Home prices rose solidly in September, with both the S&P/Case Shiller U.S. National Index and the Composite 20 City Index posting strong gains in the month. National home prices are up 4.9 percent year over year (4).
• Consumer confidence dropped 8.7 points but remained positive at 90.4 (8).
• The Commodity Futures Trading Commission passed a registration standard that would increase surveillance of computer driven trading.
• European Union proposed Common Deposit Insurance Program.
Personal income increased 0/4% in October. Personal consumption expenditures increased 0.1% (5)
• Downward revised September reading of New Home sales jumped 10.7 percent in October to a 495,000 unit pace. Inventories rose during the month, but are volatile during the seasonally slow period (5) .Northeast saw the most increase.
• Though a bit lower than the initial estimate, consumer sentiment rose to 91.3 in November. That is the third straight monthly gain and suggests consumers’ moods are improving going into the holiday shopping season.(6) Iron Ore prices drops to near decade low.
• U.S. Markets Closed – Thanksgiving Holiday
• Gold fell to the lowest in five years as bets the U.S. will raise interest rates next month increased, curbing the metal’s appeal.
• The probability of the Federal Reserve increasing interest rates for the first time since 2006 rose to 74 percent Friday from 72 percent yesterday, Fed fund futures data show.(7)
• Crude falls to under $42 for Jan.,
• DOW dragged by Disney. Small and Mid Cap out-perform the week.
• 1 million online sales on Thursday, Nov 26 – Thanksgiving (1). Black Friday (shopping): Expected strong sales online + retail stores to reach over 100 million shoppers (1). Happy Shopping!
Now, off for a left-over Turkey sandwich.
(1) Source: Marketwatch.com
(2) Source: Marketwatch.com
(3) Source: National Association of Realtors, Federal Housing Finance Agency and Wells Fargo Securities, LLC
(4) Source: S&P, FHFA, National Association of Realtors and Wells Fargo Securities, LLC
(5) Source: U.S. Department of Commerce, National Home Association of Home Builders and Wells Fargo Securities,
(6) Source: University of Michigan, U.S. Dept. of Labor, S&P and Wells Fargo Securities, LLC
(7) Source: Bloomberg.com
(8) Source: Department of Labor
Contributors: Huiwen Ma, Felipe Vargas-Zúñiga