Below is a look at the performance of various asset classes in November using our key ETF matrix.  Along with November total returns, we also include returns since the 9/20 high for the S&P 500 as well as year-to-date.

Both the S&P 500 (SPY) and the Dow 30 (DIA) gained just under 2% in November, while the Tech-heavy Nasdaq 100 (QQQ) finished in the red.  The Technology (XLK), Energy (XLE), and Communication Services (XLC) sectors were all down in November, while Health Care (XLV) was up huge at +8%.  With gains of 3.8%, Industrials (XLI) and Materials (XLB) were the next best performing sectors behind Health Care.

Outside of the US, the best performing countries were Hong Kong (EWH) and India (PIN) with gains of 8% and 9.8%, respectively.  On the flip side, Mexico (EWW) was the worst performing country with a decline of 4.16%.

The real action in November came in the commodities space.  The broad commodities ETF (DBC) fell 9.85% on the month, which was due to oil’s (USO) dramatic drop of 22.19%.  Natural gas, on the other hand, caught a massive bid and gained 39.78% on the month!  Nat gas is now up 60% on the year.

Treasury ETFs were slightly higher in November as rates pulled back a bit.

Today’s release of the ISM Manufacturing report for November broke a string of back to back declines in the index and easily surpassed expectations.  While economists were forecasting the headline index to come in at a level of 57.5, the actual reading came in at 59.3.

Breadth in this month’s report was pretty much split right down the middle as five categories showed increases, four declined, and one was unchanged.  On a y/y basis, it was less positive.  Although the headline index is higher than it was at this time last year, seven out of ten components are down.  The biggest decliner on a m/m and y/y basis was Prices Paid.  In November, Prices Paid declined from 71.6 down to 60.7, which was the largest m/m decline since June 2012.  For those worried about rising inflation, this month’s decline provides some comfort.

Finally, with the November jobs report coming up Friday, we wanted to note that the employment component of this month’s report increased from 56.8 up to 58.4, indicating another healthy jobs reading for the manufacturing sector at least.  We’ll be paying closer attention, however, to the ISM Services report which will be released on Thursday morning.  The Services sector makes up roughly 80% of the US economy compared to just 20% for the manufacturing sector.

Sales of F-Series trucks from Ford slowed slightly in the month of November relative to the same month last year, even as both months had the same number of industry selling days (25).  Total sales came in at 72,108 compared to 72,769 last year.  For the last three years now, November F-Series sales have been pretty much stuck at the 72K level.   Looking back over time, though, the last three Novembers have been the 2nd, 3rd, and 4th best Novembers for sales going all the way back to 1996.  Sales of pickup trucks (specifically at Ford) are often a sign of strength or weakness in the small business and construction sectors, so it’s good to watch these readings for signs of strength of weakness.

With 11 months in the books, total sales of F-Series trucks by Ford now stands at 822K, which is a 1.8% increase from the first 11-months of 2017.  The only two years where sales were stronger through the end of November were 2004 (844K) and 2001 (827K).  Depending on how things shake out in December, this year will likely go down as one of the top three years for Ford F-Series truck sales on record.

Finally, the chart below shows seasonally adjusted monthly F-Series truck sales by Ford.  Similar to overall auto sales in the US, sales appear to have plateaued for the time being.  They aren’t quite rolling over, but they certainly aren’t rising either.

Last week was a busy one for economic data.  Of the 28 releases, the majority (16 data points) either missed estimates or declined relative to prior readings.  The Chicago and Dallas Feds’ manufacturing indices kicked off the week with Chicago seeing a nice beat, but the opposite held true for the Dallas Fed which declined more than expected.  The next and final input for our Five Fed Index—Richmond—was released on Wednesday and came in slightly below estimates.  Housing data continued to show weakness across the board with both Case-Shiller and FHFA price indices falling short while new and pending home sales also fell—pending sales missed badly.  The second release for Q3 GDP was on Wednesday with the aggregate number coming in right in-line with expectations, although consumption, trade, and government all were revised lower.  Jobless claims hit a six month high.  To cap off the week, the Chicago PMI blew away expectations, hitting the best level of the year.

Manufacturing data kicks off December and another busy week with ISM and Markit manufacturing PMIs releasing later this morning.  It will be a hush Tuesday with no releases scheduled for tomorrow.  Things are scheduled to pick back up on Wednesday with productivity numbers, the ISM and Markit PMI for Services, ADP Private Payrolls, as well as the Fed’s Beige Book report; although these are subject to change due to the National Day of Mourning in honor of former President Bush.   With the government closing for the day, it is likely Nonfarm Productivity and the Beige Book will get postponed.  Thursday will have trade balance numbers and the final print for manufacturing orders and shipments.  Finally, on Friday we see the monthly Non-Farm Payrolls report which is currently expected to come in at +205k.  Consumer Credit then releases late in the day to finish the week.

It is still early in the holiday season but this morning investors are waking up to quite the gift as assets are rallying on positive trade news out of the G20.  Taking a look at our Trend Analyzer, every major US index ETF ended November at neutral levels with most sitting just below their 50-day moving averages (DMA). With futures pointed sharply higher this morning, it is likely we will see a majority of these ETFs open above their 50-DMAs.  Additionally, each name in this group is up from the start of last week when they were coming off of a post-Thanksgiving selloff.  Things have come a long way in a week’s time.  The Core S&P Mid-Cap ETF (IJH) and the Micro-Cap ETF (IWC) are the only ones with YTD losses, but even these could easily be reversed if they see the same upward movement as the broader market today.

Welcome to Bespoke Brunch Reads — a linkfest of the favorite things we read over the past week. The links are mostly market related, but there are some other interesting subjects covered as well. We hope you enjoy the food for thought as a supplement to the research we provide you during the week.

While you’re here, try a two-week free trial to Bespoke’s premium stock market research!  You’ll be able to read our important “Equity Market Pros and Cons” report that was just published.

Investing

The Stock Market’s Dangers Are Easier to See Now by Jeff Sommer (NYT)

Markets are weighing a series of positives and negatives, and for the first time in some years the negatives are starting to loom larger than the positives. [Link, soft paywall]

No Refuge for Investors as 2018 Rout Sends Stocks, Bonds, Oil Lower by Akane Otani and Michael Wursthorn (WSJ)

90% of asset markets have posted negative returns this year, the worst breadth across asset classes since at least 1901. [Link; paywall]

Tax Reform

US capital expenditure boom fails to live up to promises by Rana Foroohar (FT)

Despite claims that companies would pass tax cuts on to workers or ramp up capital expenditure, there’s scant evidence that they’re doing anything of the sort. [Link; paywall]

Tax Reform Made Me Do It! by Michelle Hanlon, Jeffrey L. Hoopes, and Joel Slemrod (NBER Working Papers)

Analysis of earnings calls show only 4% of public companies intend to pass on some portion of tax savings towards workers, while 22% said they would raise investment. Share repurchases were more common, but highly concentrated in a few firms, with only nine explicitly tying a new repurchase program to the taxes. Interestingly, the authors also link Political Action Committees more that donate more to Republicans to employee benefit announcements. [Link]

Real Estate

The homes millennials can buy for a million by Melissa Lawford (FT)

A new TD Ameritrade survey shows 51% of people between 21 and 37 years old believe they will become millionaires, though of course that amount of net worth would be about a fifth as much after adjusting for inflation compared to 1980. [Link; paywall]

OK, Computer: How Much Is My House Worth? by Ryan Dezember and Cezary Podkul (WSJ)

A proposed change in federal regulations would allow a large chunk of the real estate market to be bought and sold without a human being appraising the value of the transaction. [Link; paywall]

One of America’s Richest Suburbs Just Lost Its AAA Rating by Martin Z. Braun and Danielle Moran (Bloomberg)

S&P has downgraded New York’s Westchester County from AAA to AA+, and kept the county on ratings watch negative thanks to budget shortfalls. [Link; soft paywall]

Parking

America Probably Has Enough Parking Spaces for Multiple Black Fridays by Laura Bliss (CityLab)

Suburban malls and shopping centers have such a dramatic over-supply of parking spots that there is more land per car in the US than housing per human being. [Link]

Police Shootings

“I Don’t Want To Shoot You, Brother” by Joe Sexton (ProPublica)

The heartbreaking story of a person committing suicide by cop, and the absurd consequences afterwards: the firing of a police officer who arrived on the scene first and did not kill the suspect. [Link]

Sports

NBA Breaks Fresh Ground for Sports With First Gambling Data Deal by Eben Novy-Williams (Bloomberg)

The NBA has signed agreements to provide gambling operators with high speed data links to NBA scores and other forms of information related to in-play betting. [Link; soft paywall]

Antitrust

US antitrust enforcement falls to slowest rate since 1970s by Kadhim Shrubber (FT)

Antitrust enforcement as measured by the number of criminal antitrust cases filed by the DoJ has fallen to the lowest level in almost 50 years. [Link; paywall]

Computing

On The Turing Completeness of PowerPoint (SIGBOVIK) by Tom Wildenhain (YouTube)

A hilarious presentation that demonstrates PowerPoint is at least hypothetically Turing complete, a degree of computational capability we never would have guessed was possible. [Link]

China

Beijing to Judge Every Resident Based on Behavior by End of 2020 (Bloomberg)

China’s currently ad hoc social credit system is set to expand significantly, making life much harder for those that break traffic laws and commit other minor infractions. [Link; soft paywall, auto-playing video]

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Have a good Sunday!

Week 12 Results: 4-8, Overall 91-68 (57.2%)

Outside of financial markets, we’re also sports fans here at Bespoke.  With new legal sports betting avenues now available across the US, we figured we’d have some fun and pick each NFL game versus the spread this season (as of Saturday evening).

On to the week 13 slate of Sunday and Monday Night games:

2018 NFL Week 13 Bespoke Picks:

Indianapolis (-4) at Jacksonville: Indianapolis -4

Carolina (-3) at Tampa Bay: Carolina -3

Baltimore at Atlanta (-2.5): Atlanta -2.5

Cleveland at Houston (-5.5): Cleveland +5.5

Buffalo at Miami (-3.5): Buffalo +3.5

Chicago (-3.5) at NY Giants: Chicago -3.5

Denver (-5) at Cincinnati: Cincinnati +5

LA Rams (-10) at Detroit: LA Rams -10

Arizona at Green Bay (-13.5): Arizona +13.5

Kansas City (-14) at Oakland: Kansas City -14

NY Jets at Tennessee (-8): NY Jets +8

Minnesota at New England (-5): Minnesota +5

San Francisco at Seattle (-10): San Francisco +10

LA Chargers at Pittsburgh (-3): Pittsburgh -3

Washington at Philadelphia (-6.5): Philadelphia -6.5

2018 NFL Week 12 Bespoke Results:

Jacksonville (-3) at Buffalo: Jacksonville -3 (Loss)

Oakland at Baltimore (-10.5): Oakland +10.5 (Loss)

San Francisco at Tampa Bay (-2.5): Tampa Bay -2.5 (Win)

NY Giants at Philadelphia (-5): Philadelphia -5 (Loss)

Cleveland at Cincinnati (-1): Cincinnati -1 (Loss)

New England (-10) at NY Jets: New England -10 (Win)

Seattle at Carolina (-3): Seattle +3 (Win)

Miami at Indianapolis (-8): Indianapolis -8 (Loss)

Arizona at LA Chargers (-13.5): Arizona +13.5 (Loss)

Pittsburgh (-3) at Denver: Denver +3 (Win)

Green Bay at Minnesota (-3): Green Bay +3 (Loss)

Tennessee at Houston (-4): Tennessee +4 (Loss)