Articles for October 2013

CFGIowa Weekly Economic Update October 28, 2013

AN ARGUMENT AGAINST TAPERING

According to the Labor Department, the economy added 148,000 jobs in September. The jobless rate dipped to 7.2%, but job creation has averaged less than 150,000 for three straight months. (August job growth was revised up to 193,000, July job growth down to 89,000.) The University of Michigan’s final October consumer sentiment index slipped in the wake of the federal shutdown: the 73.2 reading was an 11-month low. Economists polled by Reuters forecast it coming in at 75.0.1,2

EXISTING HOME SALES PACE SLOWS

There was good news beneath the 1.9% September decrease reported by the National Association of Realtors. Residential resales have increased 10.7% in the past 12 months, 25.0% with distressed sales factored out. Distressed sales made up 14% of the market last month compared to 24% a year before. The median sale price was $199,200 last month, improving 11.7% in a year.3

DURABLES & INVENTORIES: GOOD NEWS

September saw a 3.7% jump in durable goods orders (albeit a 0.1% retreat minus transportation orders). The Commerce Department also said wholesale inventories rose 0.5% in August, a hint that businesses and suppliers expect solid holiday sales.2

ANOTHER RECORD CLOSE FOR THE S&P 500

Rising 0.88% for the week, the S&P settled at a new peak of 1,759.77 Friday, and both the DJIA (+1.11% to 15,570.28) and NASDAQ (+0.74% to 3,943.36) advanced with it. Friday’s NASDAQ close represented a 13-year high.2

THIS WEEK: Apple, Merck and Herbalife announce earnings Monday, which is also when NAR issues its September pending home sales report. Tuesday brings earnings from Nokia, Baidu, Pfizer, Gilead, Aflac, BP, Deutsche Bank, UBS, Electronic Arts, LinkedIn and Yelp plus the September PPI, September retail sales figures, the Conference Board’s October consumer confidence poll and the August S&P/Case-Shiller home price index. On Wednesday, the Federal Reserve makes a policy statement and the September CPI and October ADP employment change report appear; Facebook, General Motors, Allstate, GlaxoSmithKline, Barclays, Comcast, Visa, Expedia, Kraft Foods, Boeing and AT&T are out with earnings. October’s Challenger job-cut report arrives Thursday, along with a new initial claims report and quarterly results from ExxonMobil, MasterCard, ConocoPhillips, Sony, Starbucks and AIG. On Friday, November kicks off with Q3 results from Chevron, the October ISM manufacturing index and Commerce Department figures on October car and truck sales.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+18.82

+18.82

+17.17

+6.25

NASDAQ

+30.60

+32.06

+30.82

+11.14

S&P 500

+23.39

+24.54

+20.14

+7.10

REAL YIELD

10/25 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.34%

-0.63%

3.02%

1.92%

Sources: usatoday.com, bigcharts.com, treasury.gov – 10/25/134,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.


Please feel free to forward this article to family, friends or colleagues.  If you would like us to add them to our distribution list, please send us their address (click the link). We will contact them first and request their permission to add them to our list.


«RepresentativeDisclosure»

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.

The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index.

NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services.

The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested.

All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 – stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-360718/ [10/22/13]
2 – tinyurl.com/lqwsp7p [10/25/13]
3 – usatoday.com/story/money/business/2013/10/21/september-existing-single-family-home-sales/3141663/ [10/21/13]
4 – usatoday.com/money/markets/overview/ [10/25/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F25%2F12&x=0&y=0 [10/25/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F25%2F12&x=0&y=0 [10/25/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F25%2F12&x=0&y=0 [10/25/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F24%2F08&x=0&y=0 [10/25/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F24%2F08&x=0&y=0 [10/25/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F24%2F08&x=0&y=0 [10/25/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F24%2F03&x=0&y=0 [10/25/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F24%2F03&x=0&y=0 [10/25/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F24%2F03&x=0&y=0 [10/25/13]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/25/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/25/13]

CFGIowa Weekly Economic Update October 21, 2013

FOCUS RETURNS TO EARNINGS, FUNDAMENTALS

A sense of normalcy returned to Wall Street late last week following Wednesday’s deal to end the federal shutdown. The sense of relief spurred the S&P 500 to an all-time high on Friday. At the end of last week, 85 S&P firms had reported quarterly results with earnings surpassing forecasts by an average of 4.2%. As for Washington, the new question is whether a bipartisan committee can negotiate its way to a federal budget agreement by December 13, while also crafting a 10-year plan for tax and entitlement reform. If this new budget panel can’t reach common ground by that deadline, the federal government will face the threat of another shutdown on January 15.1,2

MORE “MODEST TO MODERATE” GROWTH REPORTED

That was the big picture out of the Federal Reserve’s latest Beige Book. Eight of 12 Fed districts reported unchanged economic expansion over the past several weeks; however, the Chicago, Richmond, Kansas City and Philadelphia districts found the pace of the economic rebound slowing.3

STOCKS CLIMB 2.4%, OIL DECLINES, GOLD RISES  

To be precise, the S&P 500 advanced 2.42% last week, hitting a new intraday record of 1,745.32 on Friday before settling at 1,744.50. The NASDAQ finished the week at a 13-year high of 3,914.28, rising 3.23% across five days. A 1.07% weekly gain brought the Dow to a settlement price of 15,399.65 Friday. NYMEX crude settled at $100.81 per barrel Friday afternoon, down 1.2% since Monday for their fifth weekly loss in the past six weeks. COMEX gold jumped 3.2% on Thursday alone, with futures up 3.7% for the week to a Friday close of $1,314.60.1,4

THIS WEEK: Monday offers the NAR’s latest existing home sales report and earnings reports from Discover Financial, McDonald’s, Halliburton, Netflix and Texas Instruments. Look what’s coming Tuesday: Apple and Nokia launch events, the Microsoft Surface 2 release, the delayed September jobs report from the Labor Department, and earnings from United Tech, Broadcom, DuPont, Travelers and Amgen. The August FHFA Housing Price Index is out Wednesday, along with earnings from Caterpillar, GlaxoSmithKline, Boeing and AT&T. Thursday brings earnings from Amazon.com, Microsoft, Credit Suisse, Western Digital, Ford, 3M and Zynga, the latest initial claims figures, and possibly the Census Bureau report on September new home sales. Friday, Procter & Gamble and UPS announce Q3 results, the month’s final University of Michigan consumer sentiment index arrives, and the September durable goods report is slated for release.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+17.52

+13.66

+14.79

+5.84

NASDAQ

+29.63

+27.38

+25.75

+10.47

S&P 500

+22.32

+19.70

+17.10

+6.79

REAL YIELD

10/18 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.42%

-0.66%

2.87%

2.14%

Sources: usatoday.com, bigcharts.com, treasury.gov – 10/18/135,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.


Please feel free to forward this article to family, friends or colleagues.  If you would like us to add them to our distribution list, please send us their address (click the link). We will contact them first and request their permission to add them to our list.


«RepresentativeDisclosure»

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.

The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index.

NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services.

The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested.

All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 – tinyurl.com/n7awhay [10/18/13]
2 – csmonitor.com/USA/DC-Decoder/2013/1017/A-new-shutdown-clock-is-ticking.-Can-Washington-avoid-a-rerun-video [10/17/13]
3 – kansascity.com/2013/10/16/4556768/economic-growth-lagging-in-kansas.html [10/16/13]
4 – marketwatch.com/investing/commodities [10/18/13]
5 – usatoday.com/money/markets/overview/ [10/18/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F18%2F12&x=0&y=0 [10/18/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F18%2F12&x=0&y=0 [10/18/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F18%2F12&x=0&y=0 [10/18/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F17%2F08&x=0&y=0 [10/18/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F17%2F08&x=0&y=0 [10/18/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F17%2F08&x=0&y=0 [10/18/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F17%2F03&x=0&y=0 [10/18/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F17%2F03&x=0&y=0 [10/18/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F17%2F03&x=0&y=0 [10/18/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/18/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/18/13]

CFGIowa Weekly Economic Update October 14, 2013

HOPES FOR A DEBT DEAL EMERGE

After a Friday meeting with President Obama, GOP senators went to work on a bipartisan solution to both the federal budget and federal debt limit impasses, one that would lift the debt limit in exchange for spending cuts. House Republicans introduced a proposal last Thursday to raise the debt ceiling for 6 weeks contingent on budget negotiations. Sen. Lindsey Graham (R-SC) said Friday’s talks produced “nothing concrete,” but Sen. Mitch McConnell (R-KY) called the discussions “very useful” and thought they might lead forward. Hopefully, at least a short-term deal can be reached by the start of this week.1,2

NO SURPRISE: CONSUMER SENTIMENT INDEX SLIPS

The University of Michigan’s initial October consumer sentiment index came in at 75.2, which was a 9-month low. Still, that beat the 73.0 consensus forecast of economists polled by Briefing.com.1,3

NO TAX HOLIDAY THIS TUESDAY, IRS SAYS

If you filed Form 4868 with the IRS earlier this year, you must still send your federal tax return to the IRS with a postmark of October 15 or earlier. (Taxpayers in certain Colorado counties have until December 2 to file; most military personnel serving in war zones get an additional 180 days after departing the theater of combat to file.) The federal government shutdown did halt the release of the September Producer Price Index and September retail sales figures last week.1,4,5

DJIA RISES AS CAPITOL HILL NEGOTIATIONS PICK UP  

The Dow climbed more than 300 points last Thursday en route to a 1.09% weekly gain and a Friday close of 15,237.11. The S&P 500 (+0.75% to 1,703.20) advanced for the week, though the NASDAQ (-0.42% to 3,791.87) did not.1

THIS WEEK: Monday is Columbus Day; banks are closed, but Wall Street is open for business. Tuesday is October 15, the federal tax extension deadline; Yahoo!, CSX, Citigroup, Coca-Cola, Johnson & Johnson and Intel issue earnings. Wednesday offers a new Federal Reserve Beige Book, a new NAHB Housing Market Index, earnings from eBay, PepsiCo, US Bancorp, Bank of America, BlackRock, American Express and IBM, and possibly the September CPI. Thursday is the deadline to raise the federal debt limit; September reports on housing starts and industrial output may arrive, and earnings from Verizon, Goldman Sachs, Google, Capital One and Chipotle will arrive plus the latest initial jobless claims report. The Conference Board comes out with its September leading indicator index Friday, and Morgan Stanley, Schlumberger, General Electric and Honeywell issue earnings reports.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+16.28

+14.34

+16.06

+5.75

NASDAQ

+25.58

+24.35

+12.99

+9.80

S&P 500

+19.42

+18.87

+17.88

+6.41

REAL YIELD

10/11 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.50%

-0.77%

2.97%

2.14%

Sources: cnbc.com, bigcharts.com, treasury.gov – 10/11/131,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.


Please feel free to forward this article to family, friends or colleagues.  If you would like us to add them to our distribution list, please send us their address (click the link). We will contact them first and request their permission to add them to our list.


«RepresentativeDisclosure»

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.

The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index.

The Michigan Consumer Sentiment Index (MCSI) is a survey of consumer confidence conducted by the University of Michigan. The MCSI uses telephone surveys to gather information on consumer expectations regarding the overall economy.

NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services.

The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 – tinyurl.com/mqjbduv [10/11/13]
2 – latimes.com/nation/politics/politicsnow/la-pn-republican-senators-shutdown-solutions-obama-20131011,0,7305655.story [10/11/13]
3 – briefing.com/investor/calendars/economic/2013/10/07-11 [10/11/13]
4 – foxnews.com/politics/2013/10/11/got-extension-on-your-tax-returns-irs-wants-them-by-oct-15/ [10/11/13]
5 – dailyfinance.com/2013/10/03/tax-procrastinators-october-15-is-coming/ [10/3/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F11%2F12&x=0&y=0 [10/11/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F11%2F12&x=0&y=0 [10/11/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F11%2F12&x=0&y=0 [10/11/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F10%2F08&x=0&y=0 [10/11/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F10%2F08&x=0&y=0 [10/11/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F10%2F08&x=0&y=0 [10/11/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F10%2F03&x=0&y=0 [10/11/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F10%2F03&x=0&y=0 [10/11/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F10%2F03&x=0&y=0 [10/11/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/11/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/11/13]

CFGIowa Monthly Economic Update September 2013

THE MONTH IN BRIEF

September began with the possibility of U.S. military intervention in Syria; it ended with the probability of a federal government shutdown. In between those anxieties, the S&P 500 managed to rise 2.97%. Credit the Federal Reserve, which surprised financial markets worldwide with its decision to keep quantitative easing (QE) going at current levels for another month. Credit also some surprisingly strong data in the real estate and manufacturing sectors. Stock gains were worldwide last month; key commodities retreated. All in all, the events of September strained financial markets far less than many analysts expected.1

DOMESTIC ECONOMIC HEALTH

When the Federal Open Market Committee voted 9-1 not to taper QE3 on September 18, the S&P 500 and Dow hit new closing highs, the NASDAQ settled at a 13-year high, and gold futures climbed 4% in a day. The Fed’s acknowledgement that the economy still needed a little more help was sweet music to global markets fearing a poor fourth quarter. However, just two days later, Kansas City Fed president James Bullard suggested that the Fed could be open to a small taper this month.2,3

Elsewhere in Washington, partisan sparring over the federal budget escalated to the point of impasse. September drew to a close with no new measure to fund the government in place, leading to the furlough of 800,000 federal workers and the partial shutdown of non-essential government services. While the budget deadline was missed by Congress, the new online health insurance exchanges created by the Affordable Care Act were open for business on October 1.4

All of this aside, the economy showed more signs of its gradual U-shaped recovery. Consumer spending had risen 0.3% in August, with consumer incomes up 0.4%. Unemployment was at 7.3% in August (the lowest level since December 2008) with the creation of 169,000 new jobs. Manufacturing expanded for a fourth consecutive month, according to the Institute for Supply Management; its September PMI (Purchasing Managers Index) rose 0.5% to 56.2. (ISM’s August non-manufacturing PMI was even better at 58.6.) Durable goods orders were up just 0.1% in August; the Bureau of Economic Analysis made its final estimate of Q2 GDP (Gross Domestic Product), which was 2.5%.5,6,7,8

Consumer inflation was tame: both the overall and core Consumer Price Indexes were up just 0.1% in August. (The Producer Price Index rose 0.3% in August, but the core PPI was flat.) Even with muted inflation, retail sales rose an underwhelming 0.2% in August. September’s consumer confidence indices offered conflicting results: the Conference Board’s survey fell to 79.7 from the August mark of 81.8, yet the final index from the University of Michigan showed a gain of 0.7 points to 77.5.5,9,10,11

GLOBAL ECONOMIC HEALTH

While the possibility of a U.S.-Russia brokered deal and a chemical weapons disarmament plan from the Hague helped to reduce fear in global markets about Syria, global markets still had estimable political concerns to contend with. On September 30, Italy faced a government crisis: five ministers belonging to former prime minister Silvio Berlusconi’s center-right party quit their posts after the nation’s parliament let the country’s value-added tax increase to 22%. So would a new election be necessary, perhaps imperiling Italy’s already fragile coalition government? Would Italy be hit with credit downgrades? October opened with these and other questions plaguing the eurozone economy, which actually grew 0.3% in Q2. Euro area unemployment was still at 12.0% in August, but the Markit eurozone manufacturing PMI rose 1.1% to 51.4 during that month.1,12,13,14

The HSBC private-sector manufacturing PMI for China came in at a tepid 50.2 for September (compared to 50.1 in August); the nation’s official PMI stood at 51.1 last month. India’s factory sector contracted for a second month in September, though the Markit PMI reading improved to 49.6; the nation’s GDP slowed to 4.4% in Q2, and its central bank surprised analysts by raising interest rates. (The Indian rupee lost 22% of its value between May and August.) Elsewhere, Taiwan’s factory PMI was at 52.0 in September, South Korea’s at only 49.7.1,15,16

WORLD MARKETS

September was amazingly positive for world benchmarks. Of all the world’s newsworthy stock indices, only Pakistan’s KSE 100 lost ground (-1.48%). Gains were prevalent in the Asia Pacific markets – Shanghai Composite, 3.64%; Hang Seng, 5.19%; TAIEX, 1.89%; Kospi, 3.66%; Sensex, 4.08%; Nikkei 225, 7.97%; Asia Dow, 5.09%. The European gains? FTSE 100, 0.77%; DAX, 6.06%; STOXX 600, 4.42%; CAC 40, 5.33%; RTSI, 10.19%. North of us, the TSX Composite rose 1.05%. South of us, the Bovespa advanced 4.66% and the IPC All-Share rose 1.75%. The Global Dow gained 5.96% on the month, while the MSCI Emerging Markets Index and MSCI World Index respectively climbed 6.23% and 4.82%.17,18

COMMODITIES MARKETS

The month saw a retreat for three of the four major metals – gold dipped 4.69%, silver 7.64% and platinum 8.25%. Copper, however, rose 2.63%. Unleaded gasoline dropped 13.54% last month on the NYMEX, while oil slipped 5.10% and natural gas declined 0.03%. Crops were up and down, as usual. Corn dived 10.46% and soybeans slid 9.58%. On the upside, sugar posted a 6.78% gain for the month, wheat rose 6.37%, and cocoa climbed 10.08%; cotton gained 3.50% and coffee futures moved 1.38% higher. As for the U.S. Dollar Index, it fell 2.28% in September to end the month at 80.22.19,20

REAL ESTATE

Freddie Mac recorded a dip in interest rates on the 30-year FRM between August 29 (4.51%) and September 26 (4.32%). That development appealed to home buyers, and some of the latest housing market indicators were very appealing to economists – the 12.4% annualized gain shown in the overall S&P/Case-Shiller Home Price Index in July, the 7.9% rise in new home sales for August, and the 1.7% increase in existing home sales in August (to the best sales pace since February 2007). The National Association of Realtors did note a 1.6% fall in pending home sales in August after a 1.4% decline in July. The federal government reported a 0.9% gain in housing starts for that month.5,21,22

While conventional home loans averaged just 4.32% interest in late September, it was a long way from the low of 3.81% noted by Freddie Mac in May. In Freddie’s September 26 survey, average rates on 15-year FRMs, 5/1-year ARMs and 1-year ARMs were respectively at 3.37%, 3.07% and 2.63%; in the August 29 survey, they had been respectively measured at 3.54%, 3.24% and 2.64%.21,22

LOOKING BACK…LOOKING FORWARD

On September 30, the Dow settled at 15,129.67, the S&P 500 at 1,681.55 and the NASDAQ at 3,771.48. The monthly gains below were part of the following quarterly gains: DJIA, 1.48%; S&P, 4.69%; NASDAQ, 10.82%.1, 17

% CHANGE

YTD

1-MO CHG

1-YR CHG

10-YR AVG

DJIA

+15.46

+2.16

+11.95

+6.31

NASDAQ

+24.90

+5.06

+21.13

+11.11

S&P 500

+17.91

+2.97

+16.41

+6.88

REAL YIELD

9/30 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.45%

-0.78%

2.25%

1.95%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 9/30/1317,23,24

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

 

When investors think of October, they commonly think of earnings season … but this October, the debt ceiling fight in Washington and the partial shutdown of the federal government have become top of mind. If the present budget deadlock and the escalating debt ceiling battle threaten to roil the markets – and make no mistake, they are serious threats – we can at least consider how well Wall Street fared in the volatility stemming from the Syria crisis. If there is a pullback (or a correction) in October, it might offer investors some good buying opportunities amid the frustration. If the market continues to be as resilient as it has been and if Congress gets tired of conflict, October might be another unexpectedly good month for stocks … just as September was.

UPCOMING ECONOMIC RELEASES: Across the balance of the month, we have the September ISM service sector PMI and Challenger job-cut report and August factory orders (10/3), the Labor Department’s September jobs report (10/4), the release of the September Fed policy meeting minutes and August wholesale inventories (10/9), the University of Michigan’s initial October consumer sentiment index, September retail sales, the September PPI and August business inventories (10/11), a new Fed Beige Book, the September CPI and October’s NAHB housing market index (10/16), September industrial output, housing starts and building permits (10/17), the Conference Board’s August index of leading indicators (10/18), September existing home sales (10/21), a fresh FHFA housing price index (10/23), September new home sales (10/24), September hard goods orders and the final October University of Michigan consumer sentiment index (10/25), September pending home sales (10/28), the August Case-Shiller home price index and the Conference Board’s October consumer confidence index (10/29), a Federal Reserve policy announcement (and possible taper) along with the first federal government estimate of Q3 GDP and the ADP employment report for October (10/30), and finally the Commerce Department report on September consumer spending and the October Challenger job-cut report  (10/31).


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«RepresentativeDisclosure»

Fast price swings in commodities and currencies will result in significant volatility in an investor’s holdings.

Investing in foreign securities involves special additional risks. These risks include, but are not limited to, currency risk, political risk, and risk associated with varying accounting standards. Investing in emerging markets may accentuate these risks.

Quantitative Easing is a government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by the urban consumers for a market basket of consumers for a market basket of consumer goods and services.

Purchasing Managers Index (PMI) is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

The ISM index is based on surveys of more than 300 manufacturing firms by the Institute of Supply Management. The ISM Manufacturing Index monitors employment, production inventories, new orders, and supplier deliveries. A composite diffusion index is created that monitors conditions in national manufacturing based on the data from these surveys.

The Producer Price Index (PPI) program measures the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPR are from the first commercial transaction for many products and services.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such.

The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.

The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index.

NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services.

The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade.

The Karachi Stock Exchange KSE100 Index comprises the top company from each of the 34 sectors on the KSE, in terms of market capitalization. .

The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange.

The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong.

The TWSE, or TAIEX, Index is capitalization-weighted index of all listed common shares traded on the Taiwan Stock Exchange.

KOSPI is the major stock market index of South Korea. The index represents all common stocks traded on the Korea Exchange.

The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-established and financially sound companies listed on the Bombay Stock Exchange (BSE).

Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). The Nikkei average is the most watched index of Asian stocks.

The Asia Dow measures the Asia equity markets by tracking 30 leading blue-chip companies in the region.

The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization.

The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange.

The STOXX Europe 600 Index is derived from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index.

The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse.

Citations.

1 – tinyurl.com/q3c6vvb [9/30/13]
2 – tinyurl.com/nkv5gh8 [9/18/13
3  – dailyfx.com/forex/market_alert/2013/09/20/Bullard_Suggests_Fed_May_Taper_in_October_Dollar_Rises.html [9/20/13]
4 – abcnews.go.com/Politics/congressional-irrationality-sends-800k-workers-home/story?id=20431889 [10/1/13]
5 – briefing.com/investor/calendars/economic/2013/09/23-27 [9/27/13]
6 – ncsl.org/issues-research/labor/national-employment-monthly-update.aspx [10/1/13]
7 – ism.ws/ISMReport/MfgROB.cfm [10/1/13]
8 – ism.ws/ISMReport/NonMfgROB.cfm [9/5/13]
9 – briefing.com/investor/calendars/economic/2013/09/16-20 [9/20/13]
10 – bls.gov/news.release/ppi.nr0.htm [9/13/13]
11 – usatoday.com/story/money/business/2013/09/13/august-retail-sales/2808737/ [9/13/13]
12 – theguardian.com/world/2013/sep/26/russia-guard-syria-chemical-weapons-sites [9/26/13]
13 – etftrends.com/2013/09/abrupt-resignations-in-coalition-government-upends-italy-etf/ [9/30/13]
14 – economy.com/dismal/outlook/country.aspx?geo=IEUZN [9/30/13]
15 – tinyurl.com/oy3oztl [10/1/13]
16 – nasdaq.com/article/indias-manufacturing-output-contracts-in-september—-markit-20131001-00043 [10/1/13]
17 – online.wsj.com/mdc/public/page/2_3024-m_globalstockindexes.html [10/1/13]
18 – mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [9/30/13]
19 – money.cnn.com/data/commodities/ [9/30/13]
20 – online.wsj.com/mdc/public/npage/2_3050.html?mod=mdc_curr_dtabnk&symb=DXY [10/1/13]
21 – freddiemac.com/pmms [10/1/13]
22 – bloomberg.com/news/2013-09-25/sales-of-new-u-s-homes-rose-in-august-following-july-plunge.html [9/25/13]
23 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F1%2F12&x=0&y=0 [9/30/13]
23 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F1%2F12&x=0&y=0 [9/30/13]
23 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F1%2F12&x=0&y=0 [9/30/13]
23 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F30%2F03&x=0&y=0 [9/30/13]
23 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F30%2F03&x=0&y=0 [9/30/13]
23 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F30%2F03&x=0&y=0 [9/30/13]
24 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/2/13]


CFGIowa Weekly Economic Update October 7, 2013

WALL STREET FEELS EFFECTS OF SHUTDOWN

Even with the federal government mostly out of commission last week and a debt ceiling battle brewing, stocks didn’t fall too far. The NASDAQ actually rose 0.69% in five trading days, marking its fifth straight weekly advance; the S&P 500 lost only 0.07%. The CBOE VIX, unsurprisingly, rose 9.25% last week to settle at 16.89 Friday. COMEX gold hit its lowest level since August on Tuesday, and the dollar touched a one-month low against the yen on Thursday. The week ended with no resolution to the budget impasse. Last week, International Monetary Fund managing director Christine Lagarde cautioned that U.S. Gross Domestic Product (GDP) could slip below 2% this year if the debt ceiling is not raised.1,2

ADP REPORT GAINS GREATER SIGNIFICANCE

As the Labor Department’s September employment report didn’t come out last week, the ADP National Employment Report took center stage. ADP said private payrolls expanded by 166,000 jobs last month; economists polled by Reuters had forecast an increase of 180,000. ADP compiles its report off of available data, as opposed to the fresh data presented by the Labor Department on the first Friday of each month. The official September jobs report will likely appear on the Friday after the federal government reopens.3,4

MANUFACTURING EXPANDS IN SEPTEMBER

The Institute for Supply Management’s purchasing manager index for the factory sector came in at a healthy 56.2 for September, up from 55.7 in August. The Institute’s non-manufacturing PMI fell 4.2 points in September to 54.4; even so, it showed the service sector growing for the 45th straight month.5

THIS WEEK: No major economic releases are scheduled for Monday. Quarterly results from Yum! Brands and Alcoa will kick off a new earnings season Tuesday. Wednesday offers earnings reports from Family Dollar and Costco, and the September 17-18 FOMC minutes. Thursday brings the latest initial jobless claims figures, plus a speech from European Central Bank president Mario Draghi at the Economic Club of New York. Wells Fargo and JPMorgan Chase report earnings Friday, and the preliminary October consumer sentiment index from the University of Michigan appears; the September PPI and September retail sales reports are also slated to be released.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+15.02

+11.03

+9.20

+5.75

NASDAQ

+26.11

+20.90

+19.11

+10.25

S&P 500

+18.53

+15.68

+10.76

+6.42

REAL YIELD

10/4 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.46%

-0.86%

2.18%

2.16%

Sources: cnbc.com, bigcharts.com, treasury.gov – 10/4/131,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.


Please feel free to forward this article to family, friends or colleagues.  If you would like us to add them to our distribution list, please send us their address (click the link). We will contact them first and request their permission to add them to our list.


«RepresentativeDisclosure»

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.

The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks.

The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System.

The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index.

NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services.

The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade.

The Institute for Supply Management (ISM) index is based on surveys of more than 300 manufacturing firms by the Institute of Supply Management. The ISM Manufacturing Index monitors employment, production inventories, new orders, and supplier deliveries.  A composite diffusion index is created that monitors conditions in national manufacturing based on the data from these surveys.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested.

All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices.

The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.

1 – tinyurl.com/of5e7ad [10/4/13]
2 – marketwatch.com/story/the-debt-ceiling-issue-and-markets-in-6-charts-2013-10-04 [10/4/13]
3 – reuters.com/article/2013/10/02/us-usa-economy-employment-adp-idUSBRE9910IW20131002 [10/4/13]
4 – pbs.org/newshour/businessdesk/2013/10/did-we-really-add-166000-jobs.html [10/2/13]
5 – ism.ws/ISMReport/NonMfgROB.cfm [10/3/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F4%2F12&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F4%2F12&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F4%2F12&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F3%2F08&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F3%2F08&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F3%2F08&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F3%2F03&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F3%2F03&x=0&y=0 [10/4/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F3%2F03&x=0&y=0 [10/4/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/4/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/4/13]