Welcome to “The Week Ahead” where we take a moment to provide our thoughts on what we can expect in markets and the economy during the upcoming week.

Last month I was awoken at approximately 1:30 AM by the smell of smoke. With all the recent wildfires in Southern California, my first thought was to get up, look out my windows and check the news to see if there was a fire in my area. While I couldn’t see anything and there wasn’t anything about a local fire on the Internet, I knew there must be a fire nearby. Moving to another window, I could clearly see an ominous orange glow on the horizon just to the left of the Getty Museum. Immediately I knew it was time to go. Sure enough, a moment later an alert on my phone chimed confirming my intuition – it read, “Prepare to evacuate.”

My family (including two cats and a guinea pig) spent the next five days at my parents’ house as the fire burned as close as one street away from our home. Luckily, my house was spared; sadly not everyone was as fortunate. Within days of getting back and resuming my normal routine, I received notification from my homeowners’ insurance company that they would not be renewing my policy. Honestly, my initial reaction was emotional, but I quickly remembered that a large part of my job as a Portfolio Strategist is managing risk, and that’s all this company (who shall not be named) was doing. As frustrating as it was to be dropped, the insurance company was acting in the best interest of their shareholders. Indeed, this company may have already had a concentrated risk of properties in my area, which again, is something investment managers deal with continuously. Turns out insurance companies have to worry about diversification just like investors do.

This week we will see some interesting data from the housing sector, which has shown surprising strength of late. We will also be taking a close look at two of our more reliable recession indicators: weekly jobless claims and leading economic indicators. Both metrics have been very strong after the summer swoon. The economy continues to move forward and much of that strength is due to the consumer (68% of the U.S. economy), so it will also be interesting to see if the consumer sentiment index continues to come in strong. With low interest rates and low unemployment, consumers look to be ready to set records this holiday season.

The silver lining of my close encounter with the wildfires is that it served as a reminder of the importance of family and the health of loved ones – even the guinea pig.

Data deck for November 18–November 22: