A Macro View – November Monthly Recap
Chart of the Week
- In Vienna this week, OPEC and its allies finally agreed on the terms of a production decrease of 1.2 million barrels per. OPEC itself will be responsible for 800,000 barrels per day of the reduction, while its allies will be responsible for the remainder. The announcement was a pleasant surprise, causing markets in London and the US to surge 5.8% and 5.3%, respectively, at Friday’s open.
- Huawei Technologies CFO, Meng Wanzhou, was arrested this week in Vancouver, Canada, where she is awaiting extradition to the US. Her arrest followed allegations of violating US sanctions by shipping US-produced products to Iran.
- November’s jobs report came in worse than expected, showing an increase of 155,000 in total nonfarm payrolls versus the consensus expectation of more than 200,000 new jobs for the month. Most of the jobs added were in health care, manufacturing, and transportation and warehousing. Despite the lower-than-expected job growth, the unemployment rate stayed steady at 3.7%, indicating a sustained, healthy labor market.
- Domestic equities were down for the week, with small cap stocks falling the most. International equities ended the week in negative territory as well, with emerging markets stocks outperforming their developed counterparts.
- Treasury yields were mixed through end of day Thursday, with longer-term yields falling more than ten basis points, whereas shorter yields rose, leading to a flatter yield curve.
- The US dollar weakened during the week, as the yield on the 10-Year Treasury Note fell to three-month lows.
- Commodities were up over all, on the back of a strong upward movement in the price of crude oil, after a surprising announcement that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will cut production more than expected.
- In other economic news, the Institute of Supply Management (ISM) has released the November Non-Manufacturing Purchasing Managers' Index (PMI), and reported a headline composite number of 60.7, up .04 since last month. This represents continued growth, and at a slightly faster rate, in the non-manufacturing sector.
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