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Market News

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U.S. equities cooled down for their first losing week since the beginning of October, but last week’s data reports gave market observers some hope that the current ten-year economic expansion may still have some pep in its step. The data on the domestic housing market is heating up as winter approaches, with the Commerce Department reporting that October saw the most new building permits issued since August of 2007. This coincided with the National Association of Realtors announcing last Thursday that existing home sales rose 1.9% in the last month, due in large part to increased demand.

Along with the momentum in the housing market, the economic outlook was bolstered by a boost in business activity according to the latest data from global information provider IHS Markit.  Markit’s Purchasing Managers’ Index for the U.S.,  a closely watched measure of activity in domestic businesses, posted on Friday a four-month high of 51.9 for November.  For this index, a value above 50 indicates expansion, while a reading below 50 points to economic contraction. As the chart above demonstrates, the rate of growth of U.S. companies has declined dramatically in 2019 as trade issues and a global slowdown have hurt productivity. However, unlike economies in Europe and Japan, which have experienced business shrinkage this year, the strong U.S. services sector has kept the economy in expansion mode even while its manufacturing base has sputtered.