- U.S. equities finished positive for the week: The Dow Jones Industrial Average (DJIA) closed 105 points higher, or rose 0.45%, to 23,539. The Standard & Poor’s 500 (S&P 500) index gained 7 points, or rose 0.26%, to 2,588. The Nasdaq closed last week 0.94% higher at 6,764. The Dow hit another record close during the week.
- October Jobs Report: Last week, the Bureau of Labor Statistics reported total nonfarm payroll employment rose by 261,000 in October, and the unemployment rate edged down to 4.1%, a 17 year low. The job additions during the month came in below Economist’ expectations of 315,000, but were very strong and showed a bounce back from the September numbers. Average hourly earnings continue to increase only modestly, up just 2.4% year over year during the month, a slowdown from the prior month.
- Tax Plan: During the week, House Republicans unveiled their tax-reform plan, which calls for a cut in the corporate rate to 20% from 35%, and a consolidation of individual tax brackets to 12%, 25%, 35% and 39.6%. The bill calls for doubling the standard deduction for individuals and couples, while repealing the alternative minimum tax. Over the next several months, the bill will face significant scrutiny as politicians in the nation’s capital parse through the details.
- New Fed Chair: Last week, President Trump nominated Fed Governor Jerome Powell to succeed Janet Yellen as the Fed Chair when her term expires in February 2018. The nomination was widely expected with Powell expected to follow the Fed’s current path of gradual rate hikes, while easing regulations.
- Key reports/items for the upcoming week include, NY Fed’s Dudley speaks (Mon), U.S. Job Openings and Labor Turnover Survey report, Eurozone retail sales, U.S wholesale trade sales, and the University of Michigan Consumer Sentiment survey.
- Third quarter earnings season continues with results expected from CVS Health, Disney, Twenty-First Century Fox, Priceline, and Macy’s among others.
- Highlight: President Trump is scheduled to meet with Chinese President Xi Jinping in Beijing on Wednesday.