Nancy Pelosi reports sale of Visa shares

NANCY PELOSI REPORTS SALE OF VISA SHARES (1200 EST/1700 GMT)

U.S. House Speaker Nancy Pelosi is out with a new disclosure of stock market trading by her husband, this time showing he recently sold shares in Visa V.

In a periodic transaction report signed Wednesday and appearing on the House of Representatives' website on Thursday, the senior Democrat disclosed that her husband, financier Paul Pelosi, on Nov. 8 sold 20,000 shares of the credit card company.

Visa's stock closed at $201.78 on that day, putting the value of Pelosi's stock sale at around $4 million.

Previous financial disclosures show Pelosi's husband received dividends from Visa shares as early as 2013, and that he has sold shares of the company in several years since then.

Users on social media platforms including Twitter, Reddit, Youtube and TikTok have scrutinized Pelosi's trade disclosures, believing her position as House Speaker gives her and her husband an edge.

After Republicans won a slim margin of House control in this year's midterm elections, Pelosi is set to relinquish the party leadership post and the speaker's gavel.

A 2012 law makes it illegal for lawmakers to use information from their work in Congress for their personal gain. The law requires them to disclose stock transactions by themselves or family members within 45 days.

A multi-millionaire, Pelosi in January signaled that she might be willing to advance legislation to completely ban stock trading by lawmakers.

That was a reversal from her previous position defending lawmakers' right to trade stocks, and proposals by Democrats in Congress this year to prohibit stock trading by lawmakers have failed to pass.

Pelosi's stock trading performance ranked sixth-best in Congress in 2021, with Republican Congressman Austin Scott leading the way, according to an analysis by Unusual Whales, a service selling financial data.

In the case of her husband's most recent sale of Visa, the shares have gained 7% since his recent trade, and he could have made an additional profit of almost $300,000 if he had waited until today to sell.

So far in 2022, Pelosi has filed 11 transaction reports, disclosing several trades in Apple AAPL. She has also disclosed trades in Walt Disney DIS, Tesla TSLA, PayPal PYPL and other widely held stocks.

(Noel Randewich)

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SINGIN' IN THE RAIN: THURSDAY'S DATA ROUNDUP (1135 EST/1635 GMT)

"They're coming in too fast," is what Luke Skywalker said when Imperial TIE fighters started zooming at him left and right, a sentiment that could be shared by market participants forced to weave and duck as they're bombarded by economic indicators.

There were few surprises, and many downbeat readings seemed to support Fed Chairman Jerome Powell's hints dropped on Wednesday that smaller hikes to the Fed funds target rate are likely in the cards.

First order, is the Commerce Department's epic personal consumption expenditures (PCE) report for October, which covers income, spending and inflation in one fell swoop, most of which had showed the good taste of falling in lockstep with consensus.

Personal income (USGPY=ECI) provided the closest thing to a surprise, gaining 0.7%, an acceleration from 0.4% the month prior. Analysts expected a repeat.

Consumer spending (USGPCS=ECI), which is responsible for about 70% of the U.S. economy, accelerated by 0.2 percentage points to a robust 0.8%, a forecast bull's eye.

Taken together, the saving rate (or, savings as a percentage of disposable income), slipped to 2.3%, the lowest number in more than 17 years.

While a low saving rate is often seen as an indicator of consumer optimism, this time around it suggests consumers are increasingly spending more money than they're taking in.

"People are still running down their accumulated pandemic savings," writes Ian Shepherdson, chief economist at Pantheon Macroeconomics. "The renewed drop in gasoline prices since early October will boost real disposable incomes just in time for the holidays, but people will need still to draw further on their stock of savings in order to maintain the recent rate of growth of spending."

But as Powell & Co's preferred inflation yardstick, the PCE price index (USPCE=ECI) had top billing.

Year-over-year, the topline number cooled to 6.0% from 6.3% in September, while the "core" reading - which strips away volatile food and energy prices - shed an encouraging 0.2 ppts to 5%, inline with economist predictions.

"Inflation is a downward trend and this plays into the hands of the Fed," says Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "It supports what Fed chief Powell said yesterday, that we’ll be seeing slower (interest rate) hikes in December and less aggressive hikes in the new year."

Below, core PCE price growth is stacked against other major indicators, all of which appear to have finally passed the peak but have miles to go before approaching the Fed's average annual 2% inflation target.

The number of U.S. workers filing first-time applications for unemployment benefits (USJOB=ECI) decreased a bit more than expected last week, dropping 6.6% to 225,000.

While shorter lines at the unemployment office are generally regarded as a good thing, in the new normal of a hawkish Fed, it appears to suggest the central bank's relentless barrage of rate has yet to loosen the labor market's tight grip.

But ongoing claims (USJOBN=ECI), reported on a one-week lag, blew past analyst estimates by jumping to 1.608 million, zeroing in on the pre-pandemic 1.7 million level.

This is a notion supported by executive outplacement firm Challenger, Gray & Christmas (CGC), whose monthly tally of layoffs announced by U.S. firms (USCHAL=ECI) more than doubled last month, surging to 76,835, the highest monthly tally since January 2021 and a 417% increase over the same month last year.

The tech sector has felt the brunt of the pain, hemorrhaging 52,771 jobs last month and 80,978 so far this year, the highest number in the series' history.

Elsewhere, "while other industries are cutting jobs at a slower pace, hiring appears to have slowed as well," writes Andrew Challenger, senior vice president at CGC.

With one month left in the year, tech is followed by automotive and healthcare as the hardest-hit sector.

Next, U.S. factory activity slipped into contraction territory in November.

The Institute for Supply Management's (ISM) purchasing managers' index (PMI) slipped 1.2 points to 49, a tad steeper than market participants were expecting and its lowest reading since May 2020.

A PMI number below 50 signifies monthly contraction.

Deteriorating new orders, shrinking employment, and backlog are among the culprits. But the "prices paid" element - which tends to wind its way into consumer prices - also steepened its monthly plunge, dropping to an even 43.

A PMI reading below 41 is typically associated with broader economic recession.

"The U.S. manufacturing sector dipped into contraction, with the Manufacturing PMI at its lowest level since the coronavirus pandemic recovery began," writes Timothy Fiore, chair of ISM's manufacturing business survey.

Remarks from the survey's respondents appear to reflect a general acknowledgement of economic slowdown.

Anxious-sounding phrases like "Consumer demand is softening," "economic uncertainty has created a slowdown in orders," "supply chain issues persist," and "overall, things are worsening," are littered throughout their commentary.

Here's a breakdown of select PMI elements:

S&P Global, formerly known as Markit, also unveiled its final take on November PMI, which landed at a slightly more dire 47.7.

"While supply chain worries persist, notably in relation to China's lockdowns, companies' concerns are increasingly moving away from the supply side to focusing on the darkening outlook for demand," says Chris Williamson, chief business economist at S&P Global. "The business mood remains among the gloomiest seen over the past decade."

The dueling PMIs differ in the weight they apply to various components (new orders, employment, etc).

The graphic below demonstrates the extent to which the indexes agree - or not:

Finally, expenditures on U.S. construction projects (USTCNS=ECI) decreased by 0.3% in October, erasing September's meager 0.1% gain.

Line-by-line, a 0.5% drop in private sector construction spending - weighed down by falling investment in residential projects amid the ongoing housing market slowdown - handily outweighed a 0.6% jump in expenditures on public projects.

"The data are consistent with our forecast for another decline in residential investment in Q4 and for business investment in structures to decline as a recession approaches," says Nancy Vanden Houten, lead U.S. economist at Oxford Economics. "Public construction should get some support from spending authorized by the infrastructure legislation passed last year, which has been coming on line gradually."

The Labor Department will provide the grand finale on Friday morning with its hotly anticipated November employment report, which is expected to show a gain of 200,000 jobs, with the unemployment rate holding firm at 3.7%.

A lower payrolls number or a higher unemployment percentage could very well boost expectations that the Fed could begin tapping the breaks with respect to its interest rate increases.

Wall Street is mixed in late morning trade with the main indexes flat to down, trying to finding footing after yesterday's post-Powell buying frenzy.

(Stephen Culp)

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U.S. INDEXES DROP EARLY; FINANCIALS DOWN MOST (1020 EST/1520 GMT)

Major U.S. stock indexes are lower in early trading Thursday, with the Dow DJI down more than 1%, as investors looked over a host of economic data, including a report showing U.S. consumer spending increased solidly in October.

A separate report showed U.S. manufacturing activity contracted for the first time in 2-1/2 years in November.

Financials SPF are leading declines among major S&P 500 SPX sectors, while energy SPN and utilities S5UTIL are in positive territory.

The declines follow a rally in stocks Wednesday, when investors cheered remarks by Federal Reserve Chair Jerome Powell. Powell said during a speech that slowing the pace of the U.S. central bank's interest rate hikes is a good way to reduce the risk the Fed will overtighten policy as it fights too-high inflation.

Here is the early market snapshot:

(Caroline Valetkevitch)

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S&P 500 INDEX: CLEARS 200-DMA, BUT NOW WILL IT HOLD? (0900 EST/1400 GMT)

In the wake of Wednesday's post-Powell surge, the S&P 500 index SPX closed back above its 200-day moving average (DMA). Traders are now watching to see if this closely watched long-term moving average will now act as support, something it has, ultimately, failed to do since it gave way in early-January.