Rover’s Weekly Market Brief — 12/22/2017

Economy

The third and final estimate for 2017 Q3 GDP ticked downward to a +3.2% annual rate from its +3.3% second estimate primarily due to a slight downward revision in consumer spending which came in at +2.2% compared to +3.3% for Q2. Seasonally adjusted annual rates of consumer spending increased notably for motor vehicles (+$11.5 billion), housing (+$17.4 billion), and healthcare (+$29.8 billion), while business spending increased for equipment (+$28.7 billion) at the fastest rate in three years (+10.8%). Gross Domestic Income (GDI), which measures output in terms of income earned instead of using GDP’s measure of products created, was +2.0% for Q3 compared to +2.3% for Q2. Corporate profits were up +4.3% in Q3 vs +0.7% for Q2, and were up +5.3% compared to Q3 2016.

There were $241.4 billion in new orders for durable goods ^[6] in November, an increase of +1.3% from October. Much of the increase was due to a +14.5% increase in civilian aircraft orders and a +11.9% increase in defense aircraft orders. Excluding transportation, new orders were down -0.1% compared to an upwardly revised +1.3% for October. New orders for core capital goods, which exclude both aircraft and military goods, were up +2.8%, with increases for motor vehicles (+1.4%), primary metals (+0.8%), and electrical equipment and appliances (+0.7%). New orders decreased for computers (-3.3%) and communications equipment (-3.3%). Compared to the same period last year, year to date orders were up +5.4% overall and up +6.9% for core capital goods.

Personal income was up +0.3% in November as a +0.4% increase in wages was offset by a -0.2% drop in government transfer receipts, primarily due to a -$7.6 billion drop in Social Security payments. After-tax disposable personal income (DPI) increased +0.4%, and the personal savings rate as a percent of DPI was 2.9%. A +1.2% spike in nondurable product spending as a result of higher gasoline prices helped push overall consumer spending up +0.6% for the month. The personal consumer expenditure (PCE) price index measure of inflation was up +0.2% for all items, and up +0.1% for core items which exclude the more volatile food and energy components. On a yearly basis, PCE inflation was up +1.8% overall, and up +1.5% for PCE core components.

Upcoming Economic Reports:

Thursday December 28 – International Trade in Goods

Thursday December 28 – EIA Petroleum Status Report

Earnings Calendar:

 

Monday	Tuesday	Wednesday	Thursday	Friday
Fanuc (FANUY) [7]	SMC (SMCAY) [8]	Bouygues (BOUYF) [9]	Zurich Insurance Group (ZURVY) [10]	Energy Co of Minas Gerais (CIG) [11]
Murata Manufacturing (MRAAY) [12]	MS&AD Insurance Group (MSADY) [13]	SECOM Co (SOMLY) [14]	Wal – Mart de Mexico (WMMVY) [15]	Breaking Data (BKD.V) [16]