The continuing European sovereign debt crisis and the failure of the Joint Select Committee on Deficit Reduction to reach an agreement on the U.S. budget deficit weighed on the major equity indices, with the S&P 500 Index down 4.69%, and the Dow Jones Industrial Average down 4.78%.

First, let’s recap news from the past week:

• The European debt crisis continues to take center stage. While the peripheral countries of Greece, Portugal, and Ireland have dominated headlines for months, the bigger core countries of Italy, France, Germany, and Spain were the main acts this past week.
• In the U.S., the Joint Select Committee on Deficit Reduction, better known as the “Super Committee,” was not so super after all. The group failed to reach an agreement on reducing the U.S. budget deficit by its November 23 deadline, a move that triggers mandatory cuts to military spending and some social programs like Medicare starting in January 2013.
• In other U.S. news, existing home sales increased modestly in October to 4.97 million units. And real GDP (gross domestic product) growth for the 3Q was revised downward to 2.0% from an initial estimate of 2.5.
• Looking at the financial markets, the major equity indices fell sharply, with the Standard & Poor’s 500 Index off 4.69%, and the Dow Jones Industrial Average down 4.78%. Overall, it was the worst Thanksgiving week for equities since 1932.

Sources of chart data: Yahoo Finance, Freddie Mac, MarketWatch, Thomson Reuters, and The Wall Street Journal

Now let’s look at the economic events for this week:

• Earlier this week, new home sales for the month of October were released. Sales rose 1.3% for the month to an annual pace of 307,000.
• On Tuesday morning, the Conference Board’s consumer confidence index for the month of November is announced. Confidence sank to 39.8 in October, its lowest level since March 2009. The expectation for November is a rebound in confidence to 44.9.
• Thursday brings three important releases. First up is weekly unemployment claims. Claims have remained below the 400,000 mark for the past three weeks, and the forecast this week is 390,000. Later in the morning, the Institute for Supply Management, or ISM, manufacturing index for November is reported. The index registered only 50.8 for October, but the consensus for November shows a little improvement to 52.0. Later in the day on Thursday, vehicle sales for November are released. On an annualized basis, October sales were 13.3 million units. Sales for November are expected to improve modestly to 13.4 million vehicles.
• We wrap up the week with the November employment report. For the month of October, the U.S. economy added 80,000 jobs, and the unemployment rate dropped slightly to 9.0%. The estimate for November is a gain of approximately 120,000 jobs, with no change in the unemployment rate.

This information is not intended to serve as investment advice. Investments are subject to market risk.

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