Thursday Marks Two Session Winning Streak!
Wall Street advanced for the second consecutive session, holding onto premarket gains despite dipping into negative territory during the session. Movement on the fiscal cliff kept investor attention; however, we also saw the release of two key data points. The latest revision to 3Q GDP came in in line with expectations, which was a significant bump from the initial estimate. We also saw a sharp decline in weekly jobless claims. With one trading day left of the day and the month, the Dow Jones Industrial Average finished up 36.71 points, or 0.3%, to 13,021.82. The S&P 500 Index rose 6.02 points, or 0.4%, to 1,415.95, with materials and health care pacing the gains among its 10 major sectors. The Nasdaq Composite Index gained 20.25 points, or 0.7%, to 3,012.03.
Front month crude broke a three session winning streak. Crude for January delivery climbed $1.58, or 1.8%, to settle at $88.07 a barrel on the New York Mercantile Exchange. Gold climbed for the first time in four sessions, rising $10.70, or 0.6%, to settle at $1,727.20 an ounce.
3Q GDP soared higher. The Commerce Department reported the second estimate at 2.7 percent annualized, compared to the advance estimate of 2.0 and second quarter rate of 1.3 percent. The latest number came in essentially the same as the consensus forecast for 2.8 percent. My optimism is a bit subdued compared to my Morning Outlook commentary. The composition shifted toward inventory investment and away from demand components. Therefore, you have to question growth sustainability quarter over quarter. The core inflation estimate came in at 1.3 percent, compared to the initial estimate of 1.5 percent and the second quarter’s 1.4 percent.
Initial claims fell 23,000 in the November 24 week to 393,000, slightly above 390K estimates. The week prior was revised 6K higher to 416K. The current four-week average is over 400,000 at 405,250, roughly 40K above the month ago level as we prepare for next week’s November employment numbers.