The U.S. economic releases were mostly positive, but those elsewhere were on the soft side. The equity market rally followed easing moves by the European Central Bank, Peoples Bank of China and the Bank of Japan, where the softness in the data also prompted a tax hike delay. Evercore/ISI's Ed Hyman reported 24 easing moves from around the world in the past month. These easing policy actions, along with increased Merger and Acquisition activity, provided the basis for this week's equity rally. Stock market indices were higher in the U.S. and Europe. Bond yields were lower, but credit spreads widened, especially in the riskier asset classes. The U.S. dollar was stronger against the European and Japanese currencies; energy and metals commodity prices were higher on the week.

Perspective:

This week's news was filled with the politics of immigration. The politics of immigration are complex, but the economics of immigration are pretty straight forward. The demographic structure of the U.S., with the increasing number of baby boomers entering the receiving-end of social security, require an increased number of younger workers. One potential source is through immigration. Immigration is positive for future U.S. GDP growth.

The demographics of the Davidson family Thanksgiving dinner is also changing. In addition to my sister and niece, we have all five of our children and four of the five significant-others joining us for Thanksgiving dinner and to celebrate my wife's birthday. The changing demographic is that we will be joined by two newly born grandbabies. We could not be happier. My family joins me in wishing you and yours the best for this Thanksgiving season.

Economic Releases:

U.S. Housing Starts (red in the chart) slipped to 1.009 million, but Permits (blue in the chart) increased to 1.080 million in October; both September numbers were revised higher. Existing Home Sales (green in the chart) rose to 5.26 million, just above the range of expectations for October. In other Housing news, the National Association of Home Builders Index rose four points to 58.0 in November — just above the range of expectations. The U.S. housing sector continued to improve, but was still well short of pre-Recession levels.

U.S. Industrial Production (blue in the chart) slipped a tick in October. Capacity Utilization also fell to 7.9%, lower than the range of expectations. Slowdowns in mining and utilities weighed on the October numbers.

Other Economic Releases

U.S. Initial Jobless Claims were little changed at 291,000 the week of Nov. 15; the four-week average of Claims inched higher, to 287,500. Reported on a one-week lag, Continuing Claims fell 73,000 to 2.33 million, further indication that the labor market is OK. The Markit Purchasing Managers Index flash report for November fell a couple of points to 54.7, but remained well into the expansion zone, above 50. The Philadelphia Fed Survey showed spectacular strength, doubling to 40.8, well above the range of expectations. New York's Empire State Survey of General Business Conditions Index surged four points to 10.16. These releases showed that the U.S. recovery remained in tack.

Elsewhere, the releases were not as supportive for recovery. In the European Union, the PMI Composite Flash for November slipped, but remained in the expansion zone at 51.4, 50.4 and 51.3 for Composite, Manufacturing, and Services. Germany's PMI Flash reports followed the pattern at 52.1, 50.0, and 52.1 respectively. France's Flash reports were higher, but, at 48.4, 47.6, and 48.8, were all in the contraction zone. In the UK, Retail Sales rebounded +0.8% in October, well above expectations. In the UK inflationary pressures remained well contained in October; CPI rose only a tick; PPI output fell -0.3% and PPI Input fell -1.5%.

In China, the flash PMI for Manufacturing fell four ticks to 50.0, right on the demarcation between contraction and expansion. In response to the deterioration in the economic data, the PBoC announced cuts in both its one-year lending and deposit rates, the first lending rate cut since July 2012; the one-year lending rate was cut by 40 basis points to 5.6% while its deposit rate was cut 25 bp to 2.75%. The Bank of Japan met and, as expected, maintained its interest rate rate policies and indicated that it would by Japanese bonds at a pace of 80 trillion Yen. This easing followed the surprise announcement Oct. 31 that had increased the purchases from 60 to 70 trillion Yen.

Equities Markets:

U.S. and European stocks rose while Asian stocks fell on the week. Easing policies, third-quarter earnings reports, and a pick up in 2014 Merger and Acquisition activity gave stock markets a boost this week. Factset reported a blended third quarter earnings increase of 7.9%, an increase from 4.5% expectation at the end of the quarter for the S&P 500. The S&P 500 recorded its fifth straight weekly increase into record territory. Widening credit spreads caused the Merrill Lynch credit market indices to post negative results for the week.

Bond Markets:

Government Bond yields were lower in the week with expectations of easing policies in Europe and Asia. Credit spreads widened, especially for the riskier asset classes.

Currencies & Commodities:

The U.S. dollar was stronger against the European and Japanese currencies, but slipped against the Looney on the week. Despite dollar strength, energy and metals commodity prices were stronger on the week. On a quarter to date basis, the dollar was stronger and oil and metals prices were lower even after this week's rebound.