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NIKKO MARKET COMMENTS
Prepared by
The Nikko Securities Co. International, Inc.
Economic News
Real GDP (97Q3) was revised down to 3.3% from 3.5%. The chain-weight deflator was revised up to 1.5% from 1.4%. Real final sales growth was revised to 4.9% from 5.0%. All of the above changes are quite inconsequential as well as in line with expectations. A 31,000 drop in weekly jobless claims (to a 303,000 pace) hints at strong demand for workers.While the current four-week average lingers at 316,000, new claims have approached the 300,000 mark repeatedly over the past two months. Total claim recipients fell by 31,000 after yet another downward revision in the prior week. In an oddly converse trend, the Conference Board's Help Wanted Advertising Index fell by 3 points to 86, (from an upward revised 89 reading in September). The group noted that there has been no slowdown in firms' recruiting efforts. November manufacturing activity was mixed regionally. The NY NAPM reported a nine-point drop in its manufacturing index, though the current 61.0 still signals growth. The Chicago purchasing index rose to 59.5% in November from 56.0%. Stronger orders, production and backlogs led the pace. However, indices for employment and prices were weaker; both dipped below the 50% level. The Commerce Department's Durable Goods Orders report posted a 0.3% drop. Weaker underlying conditions were seen in October as order declines were seen in all industry groups except transportation. Once again, aircraft order obscured reading in the durable goods report. Aircraft orders rose by 35% in October after a 21% drop last month. But non-aircraft capital goods orders have also been volatile, swinging in a plus-minus 6% range over the past several months.
Robert A. Brusca, Chief Economist
The Nikko Securities Co. International, Inc.
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