Investment Week at a Glance
Stocks finished mixed for the week. The Dow Jones Industrial Average fell 0.7%, the S&P 500 was up 0.1%, and the NASDAQ fell 0.5%. Foreign stocks (MSCI EAFE) were also up for the week, rising 0.1%. Bond prices were up for the week, with the 10-year U.S. Treasury ending the week at 4.15%. (Data source: Wall Street Journal)
Inflation Report Cooler Than Expected
The most recent CPI report came out last week and came in much lower than expected as inflation slowed to 2.7%. Core-CPI, which excludes food and energy, came in at 2.6%. These numbers were a big surprise to the market, which reacted positively to the report. There was some controversy with the report, as due to the government shutdown, there was some missing data. The big one being shelter, which showed 0% inflation. It will likely take a couple more reports to come in this low before investors are completely sold on this inflation data.
Labor Market Continues to Slow
The jobs report for October and November also came out, and showed a gain of 64k jobs in November but a loss of 105k jobs in October. The main reason for the October loss was a 157k decrease in federal government employment, as anyone who had received a deferred resignation offer came off. November’s unemployment rate rose to 4.6%, a four-year high. The good news is that more people are joining the labor force, and private-sector hiring is stable, and expectations are that government jobs will be more stable in 2026.
Nike Shares Drop More Than 10%
Nike reported earnings last week and beat expectations, but due to a slowdown in the Chinese market, shares took a dive lower. Revenue in China dropped 17%, which scared investors as China is a critical part of Nike’s business. Nike has had a rough stretch as the stock is down over 20% this year and down nearly 60% the past 5 years. Nike has struggled to keep its market share as more competitors have come into the space. Investors are hopeful the company can regain its dominance. (CNBC)
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Quiz
What is the historical average for unemployment in the U.S. since 1948? (Scroll Down for Answer)
- 4.9%
- 5.8%
- 6.4%
- 7.1%
Answer:
B) 5.8%, although we have seen unemployment slowly rise, it remains much lower than the historical average.
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