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SERVICE SECTOR KEEPS BOOMING

November 12, 2018
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SERVICE SECTOR KEEPS BOOMING

At a lofty October mark of 60.3, the Institute for Supply Management's non-manufacturing purchasing manager index was a bit lower than the record 61.6 reading seen in September, but it also beat the 59.3 consensus forecast from Refinitiv. Across the 12 months ending in October, the mean reading for the index was a strong 58.5.1,2 

IS THIS THE BEST YEAR FOR CONSUMER SENTIMENT SINCE 2000?

It could turn out that way, if the University of Michigan's influential index maintains its current level. Its preliminary November edition came in at 98.3, slightly below the final October mark of 98.6 and slightly above the 98.0 reading projected in a Bloomberg analyst poll. The gauge has averaged a reading of 98.4 in 2018, a level unseen in the past 18 years.3

WHOLESALE INFLATION JUMPS 0.6% IN A MONTH

Higher costs for fuel and industrial supplies were significant factors, according to the Bureau of Labor Statistics. The PPI rose 2.9% across the 12 months ending in October.4  

A NEW MONTH, A NEW DIRECTION FOR STOCKS 

In November, the market is doing its best to erase the memory of October. All three major indices advanced again last week, with the Dow Industrials adding 2.84%; the S&P 500, 2.13%; the Nasdaq Composite, 0.68%. At Friday's close, their settlements were: Dow, 25,989.30; S&P, 2,781.01; Nasdaq, 7,406.90.

THIS WEEK

The Institute for Supply Management releases its monthly non-manufacturing PMI on Monday; investors will consider its latest reading and earnings from Avis Budget Group, Brighthouse Financial, CNA, Invacare, Kemper, Loews, Marriott International, Mosaic, Rent-A-Center, Sysco, and Valvoline. | Earnings appear Tuesday from Archer Daniels Midland, Bausch Health, Boise Cascade, CVS Health, Eli Lilly, Etsy, Frontier Communications, GoDaddy, Martin Marietta, Papa John's, Planet Fitness, Ralph Lauren, and Wendy's. | Wednesday, earnings news emerges from Coty, Dean Foods, Dish Network, Green Dot, Groupon, Horizon Pharma, Hostess Brands, Humana, Keurig Dr. Pepper, Marathon Oil, Michael Kors, Monster Beverage, News Corp., Office Depot, Prudential Financial, Qualcomm, Rockwell Automation, Roku, Sempra Energy, Square, Sunoco, Take-Two Interactive, TiVo, TripAdvisor, and Twenty-First Century Fox. | The Federal Reserve makes an interest rate decision on Thursday, when Activision Blizzard, AMC Entertainment, AstraZeneca, D.R. Horton, Discovery, Dropbox, Hertz Global Holdings, Icahn Enterprises, Lions Gate Entertainment, Redfin, Unisys, Walt Disney Co., and Yelp all present earnings. | The University of Michigan releases its initial consumer sentiment index for November on Friday, complementing the latest wholesale inflation data from the federal government and earnings news from GNC Holdings and Starwood Properties.

Sources: wsj.com, bigcharts.com, treasury.gov - 11/9/185,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

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CITATIONS:

1 - cnbc.com/2018/11/05/october-ism-non-manufacturing-index.html [11/5/18]

2 - instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm?SSO=1 [11/5/18]

3 - 247wallst.com/economy/2018/11/09/november-consumer-sentiment-slips-election-impact-negligible/ [11/9/18]

4 - marketwatch.com/story/wholesale-inflation-surges-in-october-to-6-year-high-ppi-shows-2018-11-09 [11/9/18]

5 - markets.wsj.com/us [11/9/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F9%2F17&x=0&y=0 [11/9/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F9%2F17&x=0&y=0 [11/9/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F9%2F17&x=0&y=0 [11/9/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F8%2F13&x=0&y=0 [11/9/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F8%2F13&x=0&y=0 [11/9/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F8%2F13&x=0&y=0 [11/9/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F10%2F08&x=0&y=0 [11/9/18] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F10%2F08&x=0&y=0 [11/9/18] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F10%2F08&x=0&y=0 [11/9/18] 7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/9/18] 8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/9/18]