Rover’s Weekly Market Brief — 12/8/2017

Economy

Last week’s initial trade goods deficit estimate of $68.3 billion was revised to $69.1 billion in October’s U.S. International Trade in Goods and Services report. Service exports increased +$0.3 billion, but were matched by a +0.3 billion increase in service imports keeping the service surplus at $20.3 billion and bringing the overall trade deficit down to $48.7 billion. In services, the bulk of the service import increase was due to a +$0.28 billion increase in transportation, and exports increased for financial services (+$0.12 billion) and other business services (+$0.1 billion), which include research and development, management and technical services. Compared to the same period in 2016, the goods and services deficit has widened by 11.9%, with a 5.3% increase in exports (+$97.5 billion) falling behind a 6.5% increase in imports (+$146.6 billion).

A -4.2% (-$3.4 billion) drop in transportation orders brought overall factory new orders ^[6] to a -0.1% drop in October. However, new orders excluding transportation were up +0.8% (+3.1 billion), with gains for nondurable goods (+0.7%, +$1.6 billion), primary metals (+1.4%, +$0.28 billion), computers and electronics (+0.7%, +$0.18 billion), material handling equipment (+5.6%, +$0.16 billion), and industrial machinery (+1.9%, $0.12 billion). In the transportation sector there were significant drops for nondefense aircraft (-18.5%, -$2.4 billion), defense aircraft (-7.6%, -$0.27 billion), and boats (-32.8%, -$1.4 billion), with only new motor vehicle orders increasing (+1.3 %, +$0.37 billion). Year to date orders are up +5.6% compared to the same period last year, with orders excluding transportation up +6.0%.

The unemployment rate ^[7] remained at 4.1% as the total number of jobs increased by 228,000 in November. The number of jobs created in October was revised downward by -17,000 to 244,000, and September’s jobs were revised upward by +20,000 to 38,000, with the average monthly gain for 2017 at 174,000 jobs/month compared to 187,000 jobs/month for 2016. Jobs were added for professional and business services (+46,000), manufacturing (+31,000), health care (+30,000), and construction (+23,000). The average workweek increased +0.1 hours to 34.5 hours, and average hourly earnings increased +$0.05, with production and non-supervisory employees earning $22.24/hour vs the overall average of $26.55/hour. Over the last year, hourly wages have increased +2.5%, or +$0.64/hour. The alternate U-6 unemployment rate, which includes discouraged and marginally attached workers, was a seasonally adjusted 8.0% for November, up from 7.9% in October, but down from 9.3% in November 2016.

Upcoming Economic Reports:

Wednesday December 13 – Federal Open Market Committee (FOMC) Meeting Announcement

Thursday December 14 – Retail Sales

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
KB Financial Group (KB) [8]	Altaba (AABA) [9]	Industria De Diseno (IDEXY) [10]	China Construction Bank (CICHY) [11]	UDG Healthcare (UDHCF) [12]
Esai Co (ESALY) [13]	SMC (SMCAY) [14]	OMV (OMVJF) [15]	Oracle (ORCL) [16]	Ingles Markets (IMKTA) [17]