Economic and market updates

Economic Update for December 3, 2018

Highlights of news-making events of the past week, from the economy and profits to Europe and interest rates.

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economy

  • The Bureau of Economic Analysis in its second estimate reported that GDP grew at a rate of 3.5% in the third quarter.
  • The Census Bureau noted, in an advance report, that the trade deficit widened in October.
  • Consumer spending (personal consumption expenditures of PCE) increased 0.6% in October, according to the Bureau of Economic Analysis.

employment

  • Initial jobless claims rose by 10,000 to 234,000 in the week ended November 24, 2018, according to the Labor Department.

profits

  • As of November 20, 2018, of the 482 S&P 500 Index companies reporting third-quarter earnings, 374 — or 77.6% — beat analysts’ estimates, according to S&P Dow Jones Indices.

emotion

  • The Conference Board Consumer Confidence Index declined in November.

europe

  • The ifo Business Climate Index for Germany fell in November.
  • The GfK Consumer Climate Study for Germany declined in November.
  • Eurozone annual inflation fell to 2.0% in November from 2.2% in October, Eurostat reported.
  • The European Commission’s Business Climate Indicator for the euro area rose in November while its Economic Sentiment Indicator remained stable.

rates

  • The yield on the 10-year U.S. Treasury note traded in a narrow range.
  • FOMC minutes indicated a rate hike may be likely in December, while a couple of policymakers noted the interest rate may be near its neutral level.

risks

  • The strengthening U.S. dollar and widening credit spreads are putting pressure on select emerging markets.
  • The risk of a no-deal Brexit and a looming confrontation between the European Commission and Italy could tip Europe back into recession.
  • The Fed appears to be on course to invert the yield curve.

All economic and performance information is historical and does not guarantee future results. The views and opinions expressed are those of Putnam Investments, are subject to change with market conditions, and are not meant as investment advice.