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Weekly Economic Update for November 24, 2014

WeeklyMarketUpdate.jpgHOME SALES IMPROVE, PERMITS HIT 6-YEAR PEAK

Last month saw a 1.5% gain in existing home sales, according to the National Association of Realtors. That took the annualized increase in home buying to 2.5%. NAR measured the inventory of unsold homes at 5.1 months in October; compare that with 11.9 months in July 2010. Census Bureau data showed building permits at a high unseen since June 2008 thanks to a 4.8% October jump (there was a 10.0% leap in permits for apartment projects alone). October did see less groundbreaking, with housing starts slipping 2.8%; year-over-year, they were still up 7.7%.1,2

    

CPI STAYS STILL IN OCTOBER

The overall Consumer Price Index didn’t budge last month, although the Labor Department did report the core CPI (which excludes energy and food prices) advancing 0.2%. The Producer Price Index was up 0.2% last month after an 0.1% September decline.3

                                                                                                        

FACTORY OUTPUT DISAPPOINTS

Economists surveyed by MarketWatch expected U.S. industrial production to rise 0.2% after the 0.8% gain in September. Instead, the Federal Reserve’s latest report showed industrial output down by 0.1% for October.3

Weekly Economic Update for November 17, 2014

WeeklyMarketUpdate.jpgRETAIL SALES REBOUND FROM SEPTEMBER SLUMP

The 0.3% October gain announced by the Commerce Department exactly offset the September decline. Below the headline number, core retail sales (minus auto buying) also rose 0.3% last month. Sales increased in 11 of 13 categories; online retailers saw a 1.9% boost to lead the pack. Annually, overall retail sales were up 4.1% from last October.1,2

    

MOOD OF U.S. HOUSEHOLDS BRIGHTENS

November’s initial University of Michigan consumer sentiment index came in at 89.4 on Friday – the best reading since July 2007. This represents a return to normal, in a sense – the index averaged a reading of 89 in the five years preceding the Great Recession. Economists polled by Bloomberg had anticipated only a minor rise to 87.5 from the final October mark of 86.9.1

                                                                                                        

CRUDE, GOLD & SILVER RALLY ON FRIDAY

Rising 2.1% on the COMEX trading day, gold ended the week at $1,185.60 an ounce, its best price since October 30. Silver futures climbed 4.4% Friday to a close of $16.31. NYMEX crude settled at $75.20, up 1.4% on the day with some investors sensing that OPEC may move to reduce output.3

Weekly Economic Update for November 10, 2014

WeeklyMarketUpdate.jpgUNEMPLOYMENT DOWN TO 5.8%

America’s jobless rate dipped 0.1% in October as companies hired 214,000 new workers. Analysts polled by the Wall Street Journal had expected no improvement. In another nice development, the U-6 rate measuring underemployment plus unemployment fell 0.3% last month to 11.5%, 2.2% lower than a year before. Additionally, the Labor Department revised August and September hiring figures; firms added 31,000 more jobs during those months than previously estimated.1

      

ONE SECTOR HEATS UP, ANOTHER COOLS DOWN

October factory and service sector PMIs from the Institute for Supply Management were a mixed bag. The service sector PMI slipped to 57.1 (which was still 2.0 points above where it was a year prior). ISM’s manufacturing PMI, on the other hand, rose 2.4 points for October to 59.0.2,3

      

GOLD BREAKS 7-DAY LOSING STREAK; OIL UNDER $80

The yellow metal settled at $1,169.80 an ounce on the COMEX Friday. Its 2.4% Friday advance – representing its first winning market day since October 28 – couldn’t offset a 1.5% weekly retreat. West Texas Intermediate crude finished up the week at a mere $78.65 a barrel on the NYMEX.4

Weekly Economic Update for November 3, 2014

WeeklyMarketUpdate.jpgQ3 GDP IMPRESSES, PERSONAL SPENDING DECLINES

Good news: America’s economy expanded 3.5% in the third quarter. The Commerce Department’s initial estimate topped the 3.1% consensus forecast of economists polled by MarketWatch, and offset September retreats in overall hard goods orders (1.3%) and personal spending (0.2%). Personal incomes rose 0.2% last month, the least since December; the dip in consumer spending was the first since January.1,2

      

CONSUMER SENTIMENT: A TRULY POSITIVE 12 MONTHS 

The Conference Board’s October consumer confidence index vaulted over analyst predictions with a 94.5 reading. A year ago, it was at 71.2. Rising 2.3 points during the month, the University of Michigan’s consumer sentiment index came in at a final October mark of 86.9 (compare that with 73.2 in October 2013).3

      

BETTER NEWS FOR PENDING HOME SALES

They were up 0.3% in September, according to the National Association of Realtors. After a 1.0% dip for August, that headline was welcome. August’s S&P/Case-Shiller Home Price Index showed a 5.6% yearly overall gain in home values.1

Weekly Economic Update for October 27, 2014

WeeklyMarketUpdate.jpgGAINS IN NEW & EXISTING HOME SALES

According to the National Association of Realtors, the pace of resales improved 2.4% in September. NAR reported fewer sales of distressed properties and more home sales to families versus investors. The Census Bureau measured only a 0.2% rise in new home buying last month, but a 17.0% annualized advance.1

       

LITTLE INFLATION PRESSURE, LESS PRESSURE ON FED

September saw both the headline and core Consumer Price Index rise 0.1%, putting the yearly gain for each at 1.7%. If inflation continues to be so mild, the Federal Reserve may choose to stand pat on interest rates well into 2015. Food prices are up 3.0% over the past year, but energy prices have fallen 0.6%.2

       

LEADING INDICATORS STAGE SEPTEMBER CLIMB

The Conference Board’s Leading Economic Index rose 0.8% last month to 104.4 after a flat August, suggesting solid Q4 economic growth. It rose 1.1% back in July.3

       

STOCKS SURGE 4% IN A WEEK

Earnings beat forecasts, and investors bought back in: in five days, the S&P 500 rose 4.12% to 1,964.58, the Dow 2.59% to 16,805.41 and the Nasdaq 5.29% to 4,483.72.4  

Weekly Economic Update for October 20, 2014

WeeklyMarketUpdate.jpgCONSUMER SENTIMENT: A PLEASANT SURPRISE

Ebola fears and a choppy stock market haven’t quite rattled household optimism. At a reading of 86.4 (its highest in more than seven years), the University of Michigan’s initial October consumer sentiment index confounded analysts who expected a decrease from September’s final 84.6 mark. Consensus forecasts from MarketWatch and Briefing.com both predicted a retreat to 83.5. September’s 0.3% slip in retail sales remained a consumer question mark, especially after August’s 0.6% gain.1,2

       

U.S. INDUSTRIAL OUTPUT RISES 1.0%

September’s gain doubled the forecast from Briefing.com and more than made up for the 0.2% August dip. Elsewhere on the factory front, the September edition of the Producer Price Index retreated 0.1% with the core PPI being flat.3

       

HOUSING STARTS & BUILDING PERMITS INCREASE

The Census Bureau announced a 1.5% rise in building permits for September plus a 6.3% improvement in groundbreaking. The latter gain put the annualized rate for housing starts back above the 1 million level.1

       

DOW ENDS WILD WEEK WITH 263-POINT ADVANCE

Even with Friday’s huge gain, the blue chips fell 0.99% across five days to 16,380.41. The week also saw retreats for the NASDAQ (0.42% to 4,258.44) and S&P 500 (1.02% to 1,886.76).4  

Weekly Economic Update for October 13, 2014

WeeklyMarketUpdate.jpgWHEN WILL THE MARKET CALM DOWN?

Earnings didn’t preoccupy investors last week; Europe did. The International Monetary Fund warned that the euro area could enter another recession; European Central Bank president Mario Draghi urged EU member nations to go in for quantitative easing, but German finance minister Wolfgang Schäuble disagreed. IMF and Federal Reserve officials noted the potential for Europe to slow global and U.S. growth. Factor in a selloff in small caps and a plunge for oil, and you had the CBOE VIX hitting an 8-month high of 20.53 Friday. A very poor week for equities ended with the Dow at 16,544.10, the Nasdaq at 4,276.24 and the S&P 500 at 1,906.13. Losing 3.14% in five days, the S&P had its worst week in two years. Maybe earnings will pull some focus from Europe this coming week.1,2

        

OIL HITS A 9-MONTH LOW AS GOLD FUTURES RISE

NYMEX crude finished Friday’s trading session at just $85.52 a barrel. Futures fell 4.4% in five days. On Thursday, West Texas Intermediate crude entered a bear market, one day after Brent crude did. Oil production of OPEC nations hit a 3-year peak in September. COMEX gold was the bright spot last week, settling at $1,221.70 Friday. Across five days, the yellow metal gained 2.4% for its first weekly ascent since late September. COMEX silver ended the week at $17.30.1,3

        

WALL STREET FINDS REASSURANCE IN FED MINUTES

The Federal Open Market Committee again used the phrase “considerable time” in the minutes of its September 16-17 policy meeting – a rough projection of the lag time between the end of QE3 and adjustments to the federal funds rate. That language helped the S&P 500 rise 1.8% Wednesday.4  

Weekly Economic Update for October 6, 2014

WeeklyMarketUpdate.jpgJOBLESS RATE DECLINES TO 5.9%

Unemployment lessened another 0.2% in September as firms added 248,000 new workers to their payrolls. The nation hasn’t seen joblessness of less than 6% since July 2008. In presenting its latest report, the Labor Department also revised summer hiring totals: the August job gain went from 142,000 to 180,000, and the July gain went from 212,000 to 243,000. The U-6 rate (underemployed & unemployed) also fell 0.2% last month to 11.8%, a 71-month low.1

      

ISM GAUGES DIP

In September, the Institute for Supply Management’s factory PMI retreated to 56.6 from the prior 59.0. Its service sector PMI also pulled back, with a reading of 58.6 compared to 59.6 in August. Analysts polled by MarketWatch had anticipated both indices descending to 58.5, but both September readings indicate strength.2

      

PENDING HOME SALES DOWN 1.0% FOR AUGUST

For four out of the previous five months, the National Association of Realtors had reported increases in the number of Americans signing contracts to buy homes. Is this dip a hint of a cooler housing market this fall? In other real estate news, July’s S&P/Case-Shiller home price index showed an overall 6.7% annualized.3

Weekly Economic Update for September 29, 2014

WeeklyMarketUpdate.jpgNEW HOME SALES JUMP, RESALES DIP

Existing home sales slumped 1.8% in August – their first retreat since March, according to the National Association of Realtors. This followed gains of 2% or more in each of the previous three months. News about new home purchases was better: the Census Bureau recorded an 18.0% increase for August, more than making up for two months of declines. Keep in mind that these numbers may be significantly revised (as an example, May’s apparent 18.6% advance in new home buying was reduced to an 8.3% gain a month later).1,2

      

CONSUMER SENTIMENT RISES

At a final September mark of 84.6, the University of Michigan’s much-watched consumer sentiment index climbed 2.1 points above its final August reading. Economists polled by Bloomberg expected it to reach 84.8, however. This month’s preliminary reading for the index was also 84.6.3

      

AN 18.2% DROP FOR HARD GOODS ORDERS

The August descent was the biggest monthly dip ever recorded by the Commerce Department, following the biggest monthly rise ever seen – the revised 22.5% gain in July. Major variations in aircraft orders affected those percentages. Minus the transportation sector, durable goods orders were up 0.7% last month.4

Weekly Economic Update for September 29, 2014

WeeklyMarketUpdate.jpgNEW HOME SALES JUMP, RESALES DIP

Existing home sales slumped 1.8% in August – their first retreat since March, according to the National Association of Realtors. This followed gains of 2% or more in each of the previous three months. News about new home purchases was better: the Census Bureau recorded an 18.0% increase for August, more than making up for two months of declines. Keep in mind that these numbers may be significantly revised (as an example, May’s apparent 18.6% advance in new home buying was reduced to an 8.3% gain a month later).1,2

      

CONSUMER SENTIMENT RISES

At a final September mark of 84.6, the University of Michigan’s much-watched consumer sentiment index climbed 2.1 points above its final August reading. Economists polled by Bloomberg expected it to reach 84.8, however. This month’s preliminary reading for the index was also 84.6.3

      

AN 18.2% DROP FOR HARD GOODS ORDERS

The August descent was the biggest monthly dip ever recorded by the Commerce Department, following the biggest monthly rise ever seen – the revised 22.5% gain in July. Major variations in aircraft orders affected those percentages. Minus the transportation sector, durable goods orders were up 0.7% last month.4

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