Oil production vs. price
Last week the head of Saudi Aramco, the state owned oil company, confirmed with the Financial Times that Saudi Arabia would not be cutting oil production any time soon. Essentially, they are producing just enough to keep their market share while sacrificing price. This is quite different from what they have done in the past when they cut production in order to keep prices high. This will surely upset OPEC members who will be meeting on December 4th of this year.
Jobs numbers and wage growth
The jobs report came in very strong beating expectations with 271,000 new jobs created. This brings about a seven year low on unemployment which is now at 5%. Most importantly, wage growth rose 2.5%. This is something the economy has been lacking for some time now. The Fed is watching this closely as it could bring inflation.
Good signs for the economy
The positive jobs numbers and wage growth makes for a very lively December Fed meeting as Fed Chair Janet Yellen came out and said these are good signs for the economy. The dollar is still getting stronger, small caps are out performing large caps, and bond yields have traded up. The market reacted positively last week indicating a possible interest rate hike but there is still much to consider at this point. GDP and earnings are still low, so it will be an interesting next couple of weeks to watch.
It’s a light economic week with only the Retail Sales Report coming out Friday but we will keep you updated on any significant changes.
Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
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