Weekly Economic Update

Summit Brokerage Services Weekly Economic UpdateHOME 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



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



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



A surprise interest rate cut by the Bank of China and a pledge from European Central Bank President Mario Draghi to stoke euro area inflation gave U.S. equities a lift Friday. The S&P 500 ended the week 1.16% higher at 2,063.50; across five days, the Dow rose 0.99% to 17,810.06 and the Nasdaq 0.52% to 4,712.97. The S&P has now surged more than 11% off of its October low.4,5


THIS WEEK: Nothing major is slated for Monday. Tuesday sees the release of the September S&P/Case-Shiller home price index, the Conference Board’s latest consumer confidence index and the BEA’s second estimate of Q3 GDP; Wall Street also interprets earnings from Campbell’s Soup, Hewlett-Packard, Hormel Foods, Tiffany and TiVo. Wednesday brings November’s final University of Michigan consumer sentiment index, reports on October durable goods orders, personal spending, new home sales and pending home sales, the latest initial claims figures and quarterly results from Deere & Co. Thursday is Thanksgiving Day, so U.S. stock and bond markets will be closed; OPEC oil ministers will meet in Vienna. Wall Street will be open for a short trading day Friday, with the NYSE and NASDAQ closing at 1:00pm EST and the bond market likely closing at 2:00pm EST; investors will react to eurozone inflation and unemployment numbers for October.


DJIA +7.44 +11.24 +14.52 +6.98
NASDAQ +12.84 +18.74 +23.92 +12.60
S&P 500 +11.64 +14.90 +17.81 +7.53
10 YR TIPS 0.45% 0.60% 1.21% 1.62%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 11/21/146,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

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1 – haver.com/comment/comment.html?c=141120E.html [11/20/14]

2 – haver.com/comment/comment.html?c=141119A.html [11/19/14]

3 – marketwatch.com/economy-politics/calendars/economic [11/21/14]

4 – bloomberg.com/news/2014-11-21/u-s-index-futures-rise-as-s-p-500-heads-for-fifth-weekly-gain.html [11/21/14]

5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [11/21/14]

6 – markets.wsj.com/us [11/21/14]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F13&x=0&y=0 [11/21/14]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F13&x=0&y=0 [11/21/14]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F13&x=0&y=0 [11/21/14]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F20%2F09&x=0&y=0 [11/21/14]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F20%2F09&x=0&y=0 [11/21/14]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F20%2F09&x=0&y=0 [11/21/14]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F22%2F04&x=0&y=0 [11/21/14]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F22%2F04&x=0&y=0 [11/21/14]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F22%2F04&x=0&y=0 [11/21/14]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/21/14]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/21/14]

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