A market correction refers to a decline in a stock or index of at least 10% following a temporary high price. After last week’s losses, the Dow, S&P 500, and Nasdaq are entering correction territory. Considering the major benchmark indexes, only the Nasdaq remains ahead of its 2017 closing price. The Russell 2000, which had realized year-to-date gains of over 10%, now wallows more than 8.0% below last year’s ending value. It appears last week’s sell-off was fueled by increased investor fears of a global economic slowdown resulting from unfavorable reports from Chinese and the European economic indicators.
LAST WEEK’S ECONOMIC HEADLINES
- The federal government deficit expanded by over $100 billion in November over the prior month. Year-to-date, the deficit sits at $305.4 billion ($201.8 billion last year).
- Inflation was rather benign in November for consumers. The Consumer Price Index was unchanged in November after rising 0.3% in October. Over the 12 months ended in November, the CPI has increased 2.2%.
- Retail sales increased 0.2% in November from October and are up 4.2% over November 2017.
- Import prices fell 1.6% in November following a 0.5% rise the previous month. The November decrease is the largest monthly decline since a 1.8% drop in August 2015.
- According to the Job Openings and Labor Turnover report for October, the number of job openings ticked up by about 119,000, hires edged up by 196,000, and total separations fell by 85,000.
- For the week ended December 8, the advance figure for seasonally adjusted initial claims for unemployment insurance was 206,000, a decrease of 27,000 from the previous week’s level.
EYE ON THE WEEK AHEAD