Last week, America had an election, an event generally capable of meeting the nation’s recommended allowance of drama. The U.S. economy nevertheless continued on its weirdly durable path.
Last week, America had an election, an event generally capable of meeting the nation’s recommended allowance of drama. The U.S. economy nevertheless continued on its weirdly durable path.
- The S&P 500 fell 2.68% and the Nasdaq lost 3.37%, adding another unwelcome set of numbers to a week already stuffed with election percentages, maps, and people pointing urgently at counties. Small- and mid-cap stocks also declined, while value held up better than growth across market caps. Consumer discretionary and communication services led, while technology fell 6.93%.
- Bonds gained while stocks fell, finally performing the one job listed on their résumé in enormous bold type. The Bloomberg U.S. Aggregate Bond Index gained 0.40% as Treasury yields generally declined. The 10-year Treasury yield fell to 4.86% from 4.91%.
- Gold climbed as oil and copper fell, which I assume makes sense to someone, and I wish that person well. Crude oil fell to $90.83 a barrel from $104.12. Copper also moved lower, while gold climbed to $4,075 an ounce. Gasoline eased to $4.49 a gallon.
- The U.S. dollar strengthened modestly. The trade-weighted dollar index rose to 102.30 from 101.88.
- U.S. manufacturing picked up in October, which is reassuring because “everyone keeps making stuff” is fairly high on the economic wish list. The ISM manufacturing index rose to 55.5 from 54.5, its 10th straight month above 50. Production climbed to 59.0, its highest reading since November 2021, although the prices index remained elevated at 75.2.
- Factory orders rose 1.8% in September, suggesting someone forgot to tell American manufacturers they were supposed to be nervous. The gain exceeded expectations for 1.2% and followed an upwardly revised 0.3% increase in August. Orders were 7.2% higher than a year earlier.
- The service economy expanded for a 28th straight month in October, which feels less like a streak and more like a lifestyle. The ISM services index eased to 54.5 from 54.9. The prices index remained elevated at 73.0.
- Construction spending fell 1.9% in September, as housing once again reminded everyone that a building is just a very expensive box with paperwork. Private residential construction spending dropped 5.5%, while private nonresidential spending rose 1.1%.
- The labor market remained sturdier than expected, apparently unaware that everyone would really appreciate a clearer plotline. Job openings rose to 7.5 million in September, while initial jobless claims fell by 6,000 to 189,000 for the week ended October 31. Continuing claims increased by 23,000 to 1.718 million for the week ended October 24.
- October payrolls provided another inconvenient data point for anyone hoping the labor market would make the story simpler. Employers added 165,000 jobs, while the unemployment rate edged down to 4.1% from 4.2%. Labor-force participation was little changed at 61.9%.
- Worker productivity jumped 3.6% in the third quarter, finally providing a statistic that doesn’t require reaching for an antacid. Output rose 3.7% while hours worked increased just 0.1%, pushing unit labor costs down 0.7%. Productivity was 2.1% higher than a year ago.
- Consumer sentiment improved in November, although at 51.0 the celebration still calls for a small gathering with store-brand sparkling water. The preliminary University of Michigan index rose from October’s final reading of 48.0 and came in above expectations, while year-ahead inflation expectations eased to 4.3%.
- 3Q26 earnings remained remarkably strong, with corporate America apparently too busy making money to participate in the general anxiety. With 435 S&P 500 companies reporting, 83% beat estimates and earnings growth was expected at 33.4%. Energy led with 152.1% growth, followed by technology at 70.5%.