Succinct Summation of Week’s Events 12.15.17 (plus No Silver Bullets)

Once again I submit the usual Sunday night succinct summation of the week with the indexes once again making new all-time highs based on a combo of strong economic data plus anticipation over the tax bill with the negatives on the minor side such as producer prices rising 0.1% more than expected.  I submit two bonuses this Sunday, both from Barry Ritholtz's Big Picture Sunday reading list.  The first is an 81 frame slide presentation, "No Silver Bullets," about proposed strategies for maximizing fixed income returns in a low return environment. 


The second is a very interesting graph which purports to demonstrate how in the past 35 years our economic expansions have been progressively benefiting the wealthy over the middle class more so than in previous history.  Pardon me but I see something very different in this graphic, which is to say that starting in the Reagan years there was a sudden huge jump in the gap between income groups but that since then that gap has been shrinking, not expanding.  It is clear that the wealthy got almost all of the benefit from the 2001-2007 expansion, but look what happened after that.  From 2009-15, wealth in the middle class increased ten-fold versus a 20 percent decline for the top ten percent.  That sounds more like good news for the middle class.  Do you see the same thing? 

Succinct Summation of Week’s Events 12.15.17

December 15, 2017 5:00pm by Barry Ritholtz

Succinct Summations for the week ending December 15th

Positives:

1. S&P 500 and Dow Jones Industrial Average made new all-time highs.
2. Retail sales rose 0.8% in November, well above the 0.3% expected increase.
3. Jobless claims fell to 225k, bringing the 4-week moving average down to 234.75k.
4. PMI manufacturing rose from 53.8 to 55, an 11-month high.
5. NFIB small business index came out, but I have removed them from my list of sources.  More on this in the future.

Negatives:

1. Producer prices rose 0.4% m/o/m, above the 0.3% expected increase. PPI less food and energy rose 0.3%, also faster than expected.
2. Consumer prices also rose in November, increasing by 0.4%, in line with expectations.
3. Import and export prices rose 0.7% and 0.5% m/o/m.
4. Industrial production rose 0.2% m/o/m, below the 0.3% expected increase.
5. PMI services fell from 54.7 to 52.4, a 15-month low.
6. MBA mortgage applications fell a seasonally adjusted 2.3% w/o/w.

Big Picture Sun 12-17-17 No Silver Bullets