People feel positive around Thanksgiving, but folks on Wall Street spent the week in a decidedly negative mood. They were put there at the start by Congressional leaders who couldn’t get past partisan politics to deal with our nation’s fiscal issues. Then Moody’s fed the down vibe with cautious comments about France’s debt rating outlook. A third bummer came with Tuesday’s downward revision to Q3 GDP, coming in at a measly 2.0%. The net result? The worst ever Thanksgiving week for stocks.
There really were some things to be thankful for. The Q3 GDP report showed business investment growing at its fastest pace this year. Chain store sales were UP 3.7% over last year by one study and UP 2.8% by another. Incomes grew in October more than predicted, although spending grew less. Initial jobless claims stayed below 400,000. Finally, October Durable Goods orders were down slightly for the month, but if you take out volatile transportation, they are UP 11.7% from a year ago.
For the week, the Dow ended down 4.8%, at 11232; the S&P 500 went down 4.7%, to 1159; and the Nasdaq sank 5.1%, to 2442.
With stocks having such an awful week, you’d expect bonds to benefit immensely. Not so this time. With volumes down as usual on Black Friday’s shortened trading day, bond performance was mixed. The FNMA 3.5% bond we watch ended the week down .02, at $101.20. National average mortgage rates remained at or near record lows for the fourth week in a row, according to Freddie Mac’s weekly survey.