US manufacturing crushed expectations in November

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December 01, 2016

Stocks had a mixed day on Thursday.

The Dow finished up, but the S&P 500 and the Nasdaq tumbled into the red.

The Nasdaq in particular got hit hard as shares of technology companies — including Facebook and Google — dropped sharply over the course of the day. The index closed just a hair above its post-election day close of 5251.07.

First up, the scoreboard:

Dow: 19,191.93, +68.35, (+0.36%)
S&P 5o0: 2,191.08, -7.73, (-0.35%)
Nasdaq: 5,251.11, -72.57, (-1.36%)
WTI crude oil: $50.94, +$1.50, (+3.03%)

1. Friday is jobs day in America! The Bureau of Labor Statistics will release its report on America's November employment situation at 8:30 a.m. ET. Economists are forecasting nonfarm payrolls to increase by 180,000, the unemployment rate to come in at 4.9%, and average hourly earnings to rise 2.8% year-over-year, according to the Bloomberg consensus.

2. US manufacturing crushed expectations in November, with the ISM purchasing manager's index (PMI) rising to 53.2 in November (52.5 expected.) However, the strong dollar remains a headache for producers in the sector given that it makes it more expensive for people outside the US to buy American products.

3. US auto sales jumped more than expected in November, putting the industry within reach of a second straight record year of sales. According to Autodata, sales rose at a seasonally adjusted annual rate of 17.87 million. Economists had estimated that sales rose at a 17.7 million rate. Sales this year have been supported by automakers' use of incentives and continued low interest rates. The timing of Black Friday in November also helped dealers close more transactions.

4. Caterpillar says Wall Street is too bullish on its sales for next year. "In our view, $3.25 on $38 billion of sales and revenues is too optimistic considering expected headwinds," Caterpillar said, in a slide deck posted by the company. The maker of heavy industrial equipment also said oil prices were still too volatile to make any substantial investment. Economic growth in Europe — particularly after the UK's exit from the European Union — and power generation in oil-producing regions, remain a concern.

5. Initial jobless clams rose more than expected. Claims, which count people applying for unemployment insurance for the first time, came in at 268,000, above economists' forecasts of 253,000. Claims have now been below 300,000 for 91 consecutive weeks.

6. Bonds got demolished. Global bonds lost $1.7 trillion of value in November, according to Bloomberg, and things aren't getting any better in December.

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