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Markets and economy

Capital market impact

Slow, steady march higher despite uncertainty

Wall Street analysts have been taken off guard by the strength of equity markets this year. Following the weak performance in the fourth quarter of last year, most analysts in January cut expectations for the S&P 500 this year to roughly 2,900. With the S&P 500 currently near 3,150, analysts have been forced to upwardly revise 2019 expectations. The outlook for 2020 remains quite modest, with the average forecast only 3% higher than today. 

Economic commentary

A blowout jobs report for November

Payroll gains far surpassed consensus expectations with an increase of 266,000 for November and upward revisions totaling 41,000 for the prior two months. Even accounting for the return of striking auto workers, which pushed up manufacturing by 54,000 jobs, November’s hiring was resoundingly strong. With a three-month average of 205,000 for job gains, concerns about possible weakness in the U.S. job market should be put to rest, at least for now. 

Economic commentary

Housing activity continues to strengthen

Data from the housing sector continue to improve as the combination of low mortgage rates, a still-solid job market with the lowest unemployment rates in 50 years, and strong household formations boosts housing demand. Existing home sales rose by 1.9 percent for October to an annualized pace of 5.46 million. This extended the uptrend for activity since the start of the year with sales for October up by 4.6 percent relative to a year ago.