Weekly Economic Update
“No rational argument will have a rational effect on a man who does not want to adopt a rational attitude.”
– Karl Popper
This is the time of year to get your “tax file” ready. Start a file in which you can compile your W-2s, assorted 1099s and important receipts reflecting business and health care expenses and charitable gifts.
What word describes a man who does not have all his fingers on one hand?
Last week’s riddle:
Strange but true: the letters in the phrase “bad credit” can be rearranged to spell something most of us probably have in our wallets or handbags. Find the anagram.
Last week’s answer:
OUTLOOK OF CONSUMERS BRIGHTENS AGAIN
Economists weren’t expecting the University of Michigan’s preliminary October consumer sentiment survey to show a major advance – but it did. The index came in at 83.1, notably better than September’s final 78.3 mark. While the much-watched consumer gauge is still well below a “normal” reading of 100, this was the highest reading since September 2007.1
GAS PRICES DRIVE PPI HIGHER
Wholesale inflation rose 1.1% for September, according to the federal government’s Producer Price Index. The major influence: a 4.7% spike in energy prices. The core PPI (minus food and energy prices) was flat last month. In the past 12 months, the PPI has advanced 2.1%. Annualized wholesale inflation hasn’t been that pronounced since March.2
NEW BEIGE BOOK REPORTS MILD ECONOMIC GROWTH
The Federal Reserve’s latest survey of current economic conditions in its 12 districts noted that consumer spending “was generally reported to be flat to up slightly since the last report” while overall economic activity had “generally expanded modestly.” On the heels of the final 1.3% estimate of Q2 GDP, all this was hardly surprising.3,4
TOUGH WEEK SEES PLENTY OF SELLING
The Q3 earnings season got off to an unimpressive start, and the major indices reacted with their worst weekly performances since late May: the Dow lost 2.07%, the NASDAQ 2.94% and the S&P 500 2.21%. Gold slipped 1.18% as well; oil, on the other hand, managed a 2.20% advance. Where did everything settle Friday? Oil ended the week at $91.86 per barrel and gold at $1,759.70 an ounce; the Dow closed at 13,328.85, the S&P at 1,428.59 and the NASDAQ at 3,044.11.1,5
THIS WEEK: Monday brings Q3 results from Citigroup and September retail sales figures from the Census Bureau. IBM, Intel, Coca-Cola, Goldman Sachs, Johnson & Johnson, United Health, Mattel, PNC Financial and State Street report earnings Tuesday; the September CPI also appears. Wednesday, Q3 results come in from Northern Trust, US Bancorp, American Express, Bank of America, PepsiCo, Bank of NY Mellon, Blackrock and eBay; data on September housing starts also arrives. Thursday, earnings are in from Morgan Stanley, Phillip Morris, Nokia, Google, Microsoft, Travelers, Union Pacific, Verizon, Fifth Third, Huntington AMD, Capital One, Chipotle and E-Trade, plus new initial claims figures and the Conference Board’s September leading indicators index. Friday, we get the numbers on existing home sales in September along with earnings from GE, Honeywell and McDonald’s.
Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 10/12/121,6,7,8
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These returns do not include dividends.
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1 – money.msn.com/market-news/post.aspx?post=bc2367f2-d20e-4178-ba68-c8bf60b299d9 [10/12/12]
2 – www.nasdaq.com/article/us-producer-prices-rise-11-core-ppi-flat-20121012-00342#.UHh9YaCMLHp [10/12/12]
3 – www.hispanicbusiness.com/2012/10/10/fed_beige_book_report_calls_spending.htm [10/10/12]
4 – www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm [9/27/12]
5 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F12%2F11&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F12%2F11&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F12%2F11&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F12%2F07&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F12%2F07&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F12%2F07&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F11%2F02&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F11%2F02&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F11%2F02&x=0&y=0 [10/12/12]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/12/12]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/12/12]
8 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]