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All Eye On Jobs And OPEC

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Post-Thanksgiving Weekend but ahead of the bigger holiday slowdown, one can take a unique perspective both looking forward and back regarding our current economy. A Trump rally looks to be slowing entering into its fourth week, but we see things like Black Friday numbers from last week and non-farm payroll results at the end of this week paving the way forward, near-term.

First, however, with a big OPEC meeting starting today and wrapping on Wednesday, oil futures had been climbing on expectations that an agreement to cut global output from the world’s largest oil producers would be reached. However, we now see the Saudis claiming that oil prices may balance “with or without (supply) cuts,” which may represent an obstacle in the way of an agreement. Should a production freeze or reduction fail to materialize yet again, we expect the WTI and Brent indices to fall back from the upper-$40s, where they’d been residing since the hopefulness first arose.

Black Friday sales were again a big hit for retailers over the weekend, but the complexion is changing: online sales reached unprecedented levels this year, hitting a record $3.34 billion in e-commerce sales — over $1 billion of which was purchased via mobile devices, also a new record, according to online tracker TechCrunch. This not only represents strength for online retailers like Amazon AMZN, but illustrates the success in e-commerce build-outs from big-box companies like Walmart WMT and Macy’s M.

Disney DIS once again took the box office crown over the weekend with the debut of its animated feature Moana, which brought in $81 million over the five-day weekend. While not exactly Frozen numbers, shareholders of Disney should be pleased with the results — especially considering the next installment of the Star Wars franchise, Rogue One, is coming to theaters December 16th.

On Wednesday this week, we get the ADP ADP private sector jobs tally, which as always precedes Friday’s Bureau of Labor Statistics (BLS) non-farm payroll report. October saw 161K new jobs, which was the lowest amount since May of this year; consensus at the start of this week is 180K, which represents equilibrium in jobs gains over 2016 as a whole. The unemployment rate is expected to be at or just below 5%, which has also been constant.

Home prices, consumer income and personal spending reads are also expected this week. Now that Q3 earnings season is in our rearview mirror, these new economic data points will inform market participants beyond Trump’s surprise election victory.

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