Wild Week Comes to a Close on a High Note…..

U.S. equities finished the last trading session of a wild week on a positive note, but were unable to secure a sweep of weekly gains. The markets have seen some large swings since Monday’s rally, with optimism of a COVID-19 vaccine sparking some rotation into the hampered cyclically-natured and value stocks to the detriment of the high-flying mega-cap growth issues. Festering concerns regarding the implications of the persistent surge in new COVID-19 cases also had a hand in the bumpiness this week. The earnings front continued to paint a positive picture, courtesy of results from Dow members Walt Disney and Cisco Systems, along with Applied Materials. However, economic news was mixed, showing that November consumer sentiment unexpectedly fell and headline wholesale price inflation was hotter than forecasted. Treasury yields were flat and the U.S. dollar dipped, while crude oil prices were lower and gold gained ground. Europe finished out the week mostly higher, while markets in Asia were mixed.

The Dow Jones Industrial Average increased 400 points (1.4%) to 29,480, the S&P 500 Index was up 48 points (1.4%) at 3,585, and the Nasdaq Composite gained 120 points (1.0%) to 11,829. In moderately-heavy volume, 887 million shares were traded on the NYSE and 3.9 billion shares changed hands on the Nasdaq. WTI crude oil was $0.99 lower at $40.13 per barrel and wholesale gasoline lost $0.03 to $1.13 per gallon. Elsewhere, the Bloomberg gold spot price rose $11.38 to $1,888.21 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was 0.2% lower at 92.76. Markets were mixed for the week, as the DJIA rose 4.1% and the S&P 500 increased 2.2%, but the Nasdaq Composite declined 0.6%.

November consumer sentiment unexpectedly falls, wholesale price inflation mixed…..

The November preliminary University of Michigan Consumer Sentiment Index fell to 77.0 versus the Bloomberg expectation of a slight improvement to 82.0 from October’s 81.8 reading. The index fell back to levels seen in the summer as both the current conditions and the expectations portions of the index both came in well below estimates. The 1-year inflation forecast rose to 2.8% from October’s 2.6% rate, and the 5-10 year inflation forecast also increased to 2.6% from the prior month’s 2.4% level.

The Producer Price Index (PPI) showed prices at the wholesale level in October rose 0.3% month-over-month (m/m), versus forecasts calling for a 0.2% gain and September’s unrevised 0.4% increase. The core rate, which excludes food and energy, ticked 0.1% higher m/m, just shy of estimates of a 0.2% gain and compared to September’s unadjusted 0.4% rise. Y/Y, the headline rate was 1.1% higher, compared to projections to match the prior month’s unadjusted 1.2% increase. The core PPI gained 0.8% y/y last month, below estimates of a 0.9% increase, and compared to September’s unrevised 0.7% rise.

Treasuries were unchanged, as the yields on the 2-year and 10-year notes, as well as the 30-year bond, were flat at 0.18%, 0.88% and 1.65%, respectively.

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