Market Matters

This week we saw plenty of volatility as Pfizer released positive Covid-19 vaccine data showing the vaccine as 90% effective. This contrasts the new Covid-19 case counts we have been seeing as the week moves along, which has helped push down bond yields and rates lower. These two events appeared to move the markets, with positive vaccine news sending rates higher, and worsening spread of the virus pushing stocks down lower. As we look to next week, those factors will still be the main movers of the markets, along with any new news of additional stimulus or news of the Presidential results.

 

Initial Jobless Claims

Initial Jobless Claims filed on the week of November 7th came in at 709,000, coming in below expectations of 731,000, while continuing claims is at 6.786mm, also below expectations of 6.825mm. Continuing claims are at the lowest level since March 14, 2020, but are still about 3.5 times the pre-pandemic four week moving average. Still a good sign that those claims keep moving downward, especially with the rising case counts we have been seeing.

 

CPI

The Consumer Price Index (CPI) for October came in flat (0.0%) MoM, missing expectations of +0.1%, while September’s was +0.2%. CPI YoY is now at +1.2%, missing expectations of +1.2%. CPI excluding food and energy MoM was also flat, missing expectations of +0.2%, while YoY the index was up 1.6%, missing the expectations of +1.7%. The food index was up 0.2% and is at a YoY pace of +3.8%. It appears at least from this month’s data that inflation is becoming more relaxed and is not as volatile due to the pandemic.

 

PPI

The Producer Price Index (PPI) for October came in at +0.3% MoM, beating expectations of +0.2%, while YoY it was up +0.5%, beating expectations of +0.4%. PPI ex food and energy MoM was up +0.1%, missing expectations of +0.2%, and YoY was +1.1%, slightly lower than the expectations of +1.2%. PPI ex food, energy and trade came in right at expectations of +0.2%, while YoY it came in +0.8%, missing expectations of 0.9%. This month’s numbers appear to be consistent that with the pandemic producers continue to have limited pricing power.

 

Consumer Sentiment

University of Michigan Preliminary Consumer Sentiment came in at 77.0 for the month of November, missing expectations of 82.0 and is also lower than October’s 81.8 reading. The current conditions index was at 85.8, missing expectations of 88.3, but the expectations index came in at 71.3m which missed expectations of 79.1 and was a drop of 7.9 points from October’s level of 79.2. Only 30% of households anticipated their financial situation improving in the next year. Consumer’s judgements of their current finances posted a significant drop, particularly from lower income households and those aged 65 or old.