US Stock Market Overview – Stocks Hit Fresh Highs Led by Energy Shares

Durable Goods order drop
David Becker

US stocks moved higher on Monday setting fresh all-time highs. Stocks were driven higher by the Dow Industrials which was the best performing major index led by a rebound in Boeing shares. Boeing announced on Monday that it has fired its CEO in the wake of the 737 Max scandal. Sectors were mixed on Monday, led by Energy shares which rallied more than 2%. Utilities bucked the trend. Durable goods orders unexpectedly fell while the Chicago Fed National activity index increased.

Boeing Fires its CEO

Boeing fired its Chief Executive Dennis Muilenburg as the company struggles with an extended crisis caused by two fatal crashes of its 737 MAX jetliner. The aerospace giant said David Calhoun, a longtime Boeing director will become CEO next month. He was named Boeing’s chairman in October in a boardroom shake-up.

GDPNow Q4 Estimate Slips

The GDPNow model put out by the Atlanta Federal Reserve now estimates Q4 GDP growth at 2.1% down from 2.3% previously.  This compares to the NY Fed’s Nowcast model now has Q4 growth at 1.3, up from 0.69% previously.  It also raised its estimate for Q1 growth to 1.64% SAAR from 0.82% previously.  The Atlanta Fed is likely overstating growth a bit and the NY Fed understating it. Some of the declines in the Atlanta Fed was reflected on Monday following a weaker than expected US Durable Goods Orders. Orders for durable goods sank 2% in November, which was the biggest decline since May.

Durable Goods Order Decline

US Durable Goods orders declined by 2% in November according to the Commerce Department. Expectations for a 1.2% increase. Orders in October were lowered to a 0.2% gain from the prior estimate of an 0.5% increase. Orders for defense aircraft and parts plummeted 72.7% in November. Stripping out defense goods, orders were up 0.8%. Orders for total transportation equipment fell 5.9% in November. Orders for cars and parts rose 1.9%. Orders for core capital goods posted a second straight monthly gain, although that move was a small 0.1% increase.

Chicago National Activity Index Rises

The Federal Reserve Bank of Chicago National Activity Index gained 0.56 points in November, compared with a decline of 0.76 points in October. The index incorporates 85 indicators of economic growth, including data related to production, income, sales and personal consumption. In November, 50 out of the 85 individual indicators made positive contributions to the index.

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