We begin 2018 on a positive note. Last week’s Chicago PMI posted its third straight plus 60 score and is on the best streak for the index in over three years. We expect similar positive results this week from the various manufacturing reports released.

The theme of these reports is positive economic growth. After hovering around 2% for 2016 and into last year, GDP has topped 3% each of the last two quarters. We expect that this week’s data on manufacturing will point to an economy still enjoying a cyclical upswing.  Macroeconomic Advisers and the Atlanta Fed’s GDPNow model expects 2.4% and 2.8% fourth quarter real GDP growth, respectively. Given our expectation for continued strong momentum through December, we could easily envision an even higher growth rate for the quarter when all is said and done.

Best wishes for a happy, healthy, and prosperous 2018!


Date Report Period Survey Prior
Monday, Jan 1: New Year’s Day: Markets Closed
Tuesday, Jan 2: PMI Manufacturing Index Dec 55 55
Wednesday, Jan 3: FOMC Meeting Minutes
ISM Manufacturing Index Dec 58.2 58.2
Construction Spending M/M Nov 0.7% 1.4%
Total Vehicle Sales Dec 17.50M 17.35M
Domestic Vehicle Sales Dec 13.25M 13.38M
Thursday, Jan 4: Weekly Jobless Claims 12/30 245K
ADP Employment Report Dec 190K 190K
Friday, Jan 5: Change in Nonfarm Payrolls Dec 188K 228K
Unemployment Rate Dec 4.1% 4.1%
Labor Force Participation Rate Dec 62.7%
Underemployment Rate Dec 8.0%
Average Weekly Hours all Employees Dec 34.5 34.5
Average Hourly Earnings M/M Dec 0.3% 0.2%
Average Hourly Earnings Y/Y Dec 2.5% 2.5%
International Trade Balance Nov -$47.8B -$48.7B
Factory Orders Nov 1.4% -0.1%
Factory Orders Ex Transportation Nov 0.8%
ISM Non-Manufacturing Index Dec 57.6 57.4
Source: Bloomberg


Based on shorter-term expectations, the “tactical” allocation within portfolios is overweight stocks versus bonds.

 Kevin Caron, CFA, Senior Portfolio Manager
Chad Morganlander, Senior Portfolio Manager
Matthew Battipaglia, Portfolio Manager
Suzanne Ashley, Analyst

(973) 549-4052



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