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Weekly Market Update – November 20, 2015

The Dow closed 91 points higher Friday amidst a plethora of positive retail-sector news and heightened expectations of a December interest rate hike.  For the week the Dow was up 3.4% and for the year the index is now flat.

Nike announced a large share repurchase program Friday while Abercrombie & Fitch reported third quarter sales and revenues above expectations.  Foot Locker also produced solid third-quarter earnings.  Gap lowered its full-year EPS outlook though its third-quarter earnings, announced earlier this month, were above expectations.  Shares of all four companies closed higher and helped boost stocks in general.

After the market close on Thursday, Fed Vice-Chairman Stanley Fischer’s remarks hinted strongly at a December interest rate increase while Fed minutes released earlier in the week showed most officials in agreement with December action.  The Fed meets December 15th and 16th and is expected to raise rates by 25 basis points.

In Europe, stocks were mixed as markets digested both new terrorism news (Mali) and European Central Bank President Mario Draghi’s comments regarding the possible implementation of additional stimulus measures in December.  Draghi stated that the ECB “will not hesitate” to act further if the Eurozone economy continues to lag behind its growth and inflation targets.

The yield on the 10-year Treasury rose 1 basis point Friday to 2.26%, down 2 bps for the week and now up 9 bps for the year.  Trust preferred shares were solid performers.

Oil closed at $40.49 Friday amid volatile trading, down 25 cents for the week.  Oversupply concerns continue to negatively affect prices as US crude inventories rose by another 252,000 barrels this week, bringing November US supply to a level not seen in at least 80 years.  In addition, OPEC and Russia continue to produce crude at high levels while Iranian oil could hit the market in the first quarter of 2016 as sanctions are lifted.  OPEC meets December 14th.

Next week’s economic calendar highlights include October existing home sales on Monday, the second estimate of Q3 GDP and a consumer confidence report on Tuesday and weekly jobless claims, October new home sales and another consumer confidence report on Wednesday.  Expect the October home sale numbers to be up slightly from September, consumer confidence to improve from the prior reading, Q3 GDP to rise to 2.1% from the prior 1.5% reading and weekly jobless claims to settle in the 260-270,000 range (from 271,000 this week). 

Markets and our offices will be closed next Thursday in observance of the Thanksgiving holiday.  On Friday, markets are open only until 1pm though our office will be open the entire day. 


Ulland Investment Advisors

4550 IDS Center · Eighty South Eighth Street · Minneapolis MN 55402 · Telephone: 612-312-1400 · Facsimile: 612-204-3464