Articles for November 2013

CFGIowa Weekly Economic Update November 25, 2013

CONSUMER & PRODUCER PRICES DECLINE

Last week, Labor Department reports showed the Consumer Price Index down 0.1% for October while the Producer Price Index slipped 0.2% with help from a 3.8% dip in gasoline costs. The real news was the remarkably tame yearly inflation. In the last 12 months, the CPI has only increased 1.0% and the PPI just 0.3% (although the core PPI did rise 1.4%). What do these annualized gains represent? The weakest wholesale inflation since 2009.1,2

FEWER HOMES SELL IN OCTOBER

Existing home sales fell 3.2% last month, according to the National Association of Realtors. This marks the second straight monthly decline. Higher mortgage rates, narrowing inventory and the federal government’s 16-day shutdown certainly influenced sales volume. The median sales price of an existing home was $199,500 last month, 12.8% higher than a year ago.1,3

RETAIL SALES IMPROVE

October saw a solid 0.4% rise in the indicator, and that surprised analysts who thought the federal shutdown would hurt the headline number. Auto sales powered October’s gain, but Census Bureau data showed a 0.2% advance even with car and truck buying removed.1

S&P CLOSES ABOVE 1,800

While the October Federal Reserve policy meeting minutes revealed the possibility of tapering QE3 (Quantitative Easing) in “the coming months,” stocks still pulled higher on the week. The Dow (+0.65% to 16,064.77), NASDAQ (+0.14% to 3,991.65) and S&P 500 (+0.37% to 1,804.76) all shrugged off midweek dips.1,4

THIS WEEK: NAR releases its October pending home sales report Monday, complementing earnings from Fifth Street Finance and Wet Seal. On Tuesday, the Census Bureau issues September and October reports on housing starts and building permits, the Conference Board’s November consumer confidence index comes out, and the September Case-Shiller Home Price Index arrives; additionally, TiVo and Chico’s announce Q3 results. Wednesday brings the University of Michigan’s final November consumer sentiment index, the Conference Board’s October leading indicators index and the October durable goods orders report from the Census Bureau. All U.S. financial markets will be closed Thursday in observance of Thanksgiving. Friday is Black Friday, of course; the NYSE and NASDAQ will close at 1:00pm EST with the bond market likely closing an hour later.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+22.59

+25.15

+19.93

+6.68

NASDAQ

+32.20

+36.39

+37.67

+11.08

S&P 500

+26.54

+29.74

+25.12

+7.43

REAL YIELD

11/15 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.56%

-0.71%

3.15%

1.93%

Sources: usatoday.com, bigcharts.com, treasury.gov – 11/22/135,6,7,8

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 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.

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.

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 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 – news.morningstar.com/articlenet/article.aspx?id=620267 [11/20/13]
2 – marketwatch.com/story/us-wholesale-costs-fall-again-in-october-2013-11-21 [11/21/13]
3 – business.time.com/2013/11/20/u-s-existing-home-sales-fall-3-2-percent-in-october/ [11/20/13]
4 – thestreet.com/story/12120723/1/market-hustle-curb-that-enthusiasm-dow-hesitates-at-16000.html [11/22/13]
5 – usatoday.com/money/markets/overview/ [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F12&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F12&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F12&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F08&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F08&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F08&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F03&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F03&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F03&x=0&y=0 [11/22/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/22/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/22/13]

CFGIowa Weekly Economic Update November 18, 2013

YELLEN EMPHASIZES FURTHER EASING

While conceding that the Federal Reserve’s current stimulus effort “will not continue indefinitely,” Federal Reserve chair nominee Janet Yellen sounded decidedly dovish at her confirmation hearing in the Senate last week. “Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” she noted, which global markets took as a signal that tapering was not in the immediate future. The S&P 500 hit a new record close after her comments Thursday; gold and silver futures and the MSCI Emerging Markets Index all rose 1.4% on the day.1

HEALTHCARE ENROLLMENT ISSUES LINGER

While demand was reasonably high at the new online health insurance exchanges in October (975,000+ people found that they were eligible for coverage), total enrollment for the month was just 106,000. As tweaks continued to be made to healthcare.gov, President Obama announced that insurers don’t yet have to cancel plans that fail to meet Affordable Care Act standards. Friday, the House passed a GOP bill that would let insurers offer such policies to new customers as well as existing ones in 2014; President Obama has indicated he will veto this bill.2,3

EARNINGS GROWTH SURPASSES ESTIMATES

As of Friday, 461 firms in the S&P 500 had reported earnings – and according to Bloomberg, 75% of them had beaten profit forecasts. Bloomberg projects S&P 500 earnings up 4.9% for Q3 and 5.8% for Q4.4

DOW…16,000? S&P…1,800? NASDAQ…4,000?

Soon, the major U.S. indices could top those psychologically important levels. Friday saw another record close for the S&P 500: 1,798.18. The Dow settled Friday at 15,961.70 (also a new record close), the NASDAQ at 3,985.97. Weekly performances were as follows: S&P, +1.56%; DJIA, +1.27%; NASDAQ, +1.70%.5

THIS WEEK: Monday brings earnings from Salesforce, Tyson Foods and Urban Outfitters and the November NAHB Housing Market Index. Tuesday offers earnings from Campbell Soup Co., TJX, Best Buy, Home Depot and Medtronic. Wednesday, NAR publishes October existing home sales numbers, and the federal government issues the October CPI, the October FOMC minutes and the report on October retail sales; ADT, Lowe’s, JCPenney, J.M. Smucker, Deere and Staples announce earnings. Thursday, October’s PPI and new initial claims figures complement earnings from Abercrombie & Fitch, Target, Gap, Gamestop, Ross, Intuit and Dollar Tree. Friday, PetSmart announces Q3 results.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+21.81

+27.26

+17.57

+6.34

NASDAQ

+32.01

+40.50

+32.56

+10.65

S&P 500

+26.08

+32.87

+21.18

+7.12

REAL YIELD

11/15 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.53%

-0.80%

2.87%

1.87%

Sources: usatoday.com, bigcharts.com, treasury.gov – 11/15/136,7,8,9

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 – bloomberg.com/news/2013-11-13/asian-futures-heed-u-s-rally-as-yelen-boosts-treasuries.html [11/13/13]
2 – washingtonpost.com/blogs/plum-line/wp/2013/11/13/what-the-obamacare-enrollment-numbers-really-tell-us/ [11/13/13]
3 – usatoday.com/story/news/politics/2013/11/15/house-cancelled-plans-bill/3576071/ [11/15/13]
4 – sfgate.com/business/bloomberg/article/U-S-Stocks-Rise-on-Fed-Bets-Amid-Industrial-4985720.php [11/15/13]
5 – fxstreet.com/news/forex-news/article.aspx?storyid=5f3ccc1a-1b74-482b-b7fe-37046d8e5fc4 [11/15/13]
6 – usatoday.com/money/markets/overview/ [11/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F15%2F12&x=0&y=0 [11/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F15%2F12&x=0&y=0 [11/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F15%2F12&x=0&y=0 [11/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F14%2F08&x=0&y=0 [11/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F14%2F08&x=0&y=0 [11/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F14%2F08&x=0&y=0 [11/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F14%2F03&x=0&y=0 [11/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F14%2F03&x=0&y=0 [11/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F14%2F03&x=0&y=0 [11/15/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/15/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/15/13]

CFGIowa Weekly Economic Update November 11, 2013

SHUTDOWN DOESN’T DETER HIRING

The Labor Department’s delayed October employment report showed the economy adding 204,000 new jobs last month. Analysts polled by Reuters had only expected a gain of 125,000. The unemployment rate actually rose to 7.3%, as those analysts had predicted. This was a nice Friday surprise for Wall Street, and it also made investors wonder if the tapering of QE3 (Quantitative Easing) could come before the end of the year. A solid November employment report could offer further grounds for that move.1

FIRST Q3 GDP ESTIMATE TOPS EXPECTATIONS

In another nice surprise for Wall Street, the Bureau of Economic Analysis put third quarter growth at 2.8%, whereas economists surveyed by MarketWatch had projected a reading of 2.3%. In related news, a federal report showed factory orders up 1.7% in September, and the Institute for Supply Management’s service sector PMI (Purchasing Manager’s Index) rose a full point in October to 55.4.2,3

HOUSEHOLD INCOMES OUTPACE SPENDING

The September consumer spending report was a bit of a disappointment. Personal spending increased 0.2% (economists polled by MarketWatch had forecast a 0.3% rise) while personal incomes rose 0.5%, suggesting that households saved more and spent less of what they earned. November’s initial University of Michigan consumer sentiment index came in at 72.0, down from the final October mark of 73.2.3

DOW CLOSES AT NEW PEAK

Rising 1.08% on the day and 0.94% on the week, the DJIA settled at a new all-time peak of 15,761.78 Friday. The S&P 500 rose 0.51% across five days to settle at 1,770.61 at week’s end, while the tech-heavy NASDAQ lost 0.07% in the same stretch, closing Friday at 3,919.23. Incidentally, the S&P is now riding a 5-week win streak, its longest since mid-February.1,4

THIS WEEK: Earnings season is winding down, but it should still take center stage this week with light data coming out of Washington. Monday is Veterans Day, a federal holiday; bond markets are closed, but the stock market is open and NewsCorp, American Apparel, Dick’s Sporting Goods and Trend Micro will present Q3 results. Tuesday brings earnings from Dish Network, DR Horton, Dean Foods and Pandora. Wednesday offers Q3 results from Cisco and Macy’s. On Thursday, earnings reports from Wal-Mart, Kohl’s, Nordstrom, Williams Sonoma, Vodafone, Viacom and Agilent arrive along with new initial claims figures. Reports on October industrial output and September wholesale inventories appear Friday.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+20.28

+23.03

+15.25

+6.07

NASDAQ

+29.80

+35.35

+27.58

+9.89

S&P 500

+24.15

+28.54

+18.04

+6.81

REAL YIELD

11/8 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.59%

-0.85%

2.86%

2.10%

Sources: usatoday.com, bigcharts.com, treasury.gov – 11/8/135,6,7,8

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»

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 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.

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.

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/kvl7fbr [11/8/13]
2 – usatoday.com/story/money/business/2013/11/07/third-quarter-gdp-report/3452547/ [11/7/13]
3 – marketwatch.com/Economy-Politics/Calendars/Economic [11/8/13]
4 – google.com/finance?q=INDEXDJX%3A.DJI&ei=oHF9Usj8IoOeiQLiKA [11/8/13]
5 – usatoday.com/money/markets/overview/ [11/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F8%2F12&x=0&y=0 [11/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F8%2F12&x=0&y=0 [11/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F8%2F12&x=0&y=0 [11/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F7%2F08&x=0&y=0 [11/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F7%2F08&x=0&y=0 [11/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F7%2F08&x=0&y=0 [11/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F7%2F03&x=0&y=0 [11/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F7%2F03&x=0&y=0 [11/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F7%2F03&x=0&y=0 [11/8/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/8/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/8/13]

CFGIowa Monthly Economic Update October 2013

THE MONTH IN BRIEF

A rampaging bull market overcame two significant challenges in October – a 16-day closure of most of the federal government, and the threat of a U.S. debt default. Congress broke the stalemate with a short-term rescue – a deal which guaranteed government funding until January 15 and extended the nation’s borrowing authority until February 7. Investors were relieved, and the S&P 500 added 4.46% to its YTD gain during the month. As expected, the Federal Reserve did not scale back its stimulus. As assorted commodities alternately rose and fell, global stock benchmarks mostly rose. Social Security recipients got a mild increase in payments for 2014, and uninsured individuals who visited healthcare.gov mostly got frustrated. Signs of the housing market cooling down a bit emerged, but there was still good news from the sector.1,2

DOMESTIC ECONOMIC HEALTH

Standard & Poor’s estimates that the October shutdown took 0.6% off Q4 Gross Domestic Product (GDP) and cost the U.S. economy $24 billion. It certainly dented consumer confidence: the October Conference Board index showed a one-month drop of 9.0 points to 71.2, and the month’s final University of Michigan consumer sentiment index came in at 73.2, the lowest reading since last November.3,4,5

The impasse in Washington delayed or postponed some regularly scheduled economic reports. We did learn that the jobless rate had ticked down to 7.2% in September, even with only 148,000 new jobs created (economists surveyed by Dow Jones Newswires had forecast a gain of 180,000). Consumer inflation rose 0.2% in September after ticking up 0.1% in August, while wholesale inflation decreased 0.1% in September after a 0.3% August advance. Retail sales retreated 0.1% in September, but were up 0.4% with auto buying factored out. Industrial output increased 0.6% in September, and durable goods orders rose 3.7%.4,5,6

Many uninsured consumers faced an impasse as they tried to use healthcare.gov, the federal government’s new website created to help people shop for health coverage in 36 states. The site was plagued by back-end design and security issues, leading some of its critics to call for the immediate resignation of Health & Human Services Secretary Kathleen Sebelius. Additionally, some insured Americans discovered they would have to buy new coverage in 2014 due to the inability of their current health insurance to meet the standards of the Affordable Care Act.7,8

In more positive news, the Institute for Supply Management’s manufacturing index rose to 56.4 in October, marking the fifth straight month of expansion. The last ISM report on the service sector (September) also showed expansion at 54.4, although this was a real drop from August’s reading of 58.6.9,10

As expected, the Federal Reserve refrained from tapering its $85-billion-per-month asset purchase program. Noting that “fiscal policy is restraining economic growth,” the Federal Open Market Committee’s October 30 statement also conceded that “the recovery in the housing sector slowed somewhat in recent months.” Social Security announced a 1.5% Cost of Living Adjustment (COLA) for 2014, one of the program’s smallest COLAs ever; that works out to an additional $19 a month for the average recipient.11,12

GLOBAL ECONOMIC HEALTH

Demand for exports seemed to be driving manufacturing growth in Asia. China’s official purchasing managers index (PMI) hit 51.4 in October, an 18-month high.  The HSBC/Markit PMI for China also rose to 50.9 in October. Good news, yet a Bloomberg poll of 52 economists projected China’s 2013 GDP at 7.6%, the poorest since 1999. Markit’s factory-sector PMI for Japan climbed 1.7 points in October to 54.2 and Taiwan’s rose to 53.0. October’s Markit manufacturing PMI for India showed sector contraction – it was at 49.6 for a second straight month.13,14

Great Britain’s Markit PMI slipped 0.3 points to a still-impressive 56.0 in October. The combined Markit PMI for the eurozone slipped from 52.2 in September to 51.5 last month, but that reading still marked the fourth consecutive time it was above 50. Eurozone unemployment was at 12.0%, but Markit noted 15 eurozone members reporting “modest growth of activity for the third month running, representing the first period of growth for these countries since early 2011.” Spain had actually emerged from its 2-year recession in Q3, and its jobless rate fell in Q3 as well.13,15  

WORLD MARKETS

Many benchmarks rose. Across the pond, the DAX gained 5.11% in October, the STOXX 600 3.84%, the CAC 40 3.78% and the FTSE 100 4.17%. Up north, the TSX Composite climbed 4.49%; to our south, the IPC All-Share gained 2.12%. While the Nikkei 225 and Shanghai Composite respectively lost 0.88% and 1.52% for the month, advances were more common in Asia: the Hang Seng added 1.52%, the Jakarta Composite 4.51%, the KOSPI 1.66% and the Sensex 9.21%. Looking at multinational/regional benchmarks, the MSCI World Index was up 3.83% for the month while the MSCI Emerging Markets Index gained 4.76%; the Asia Dow advanced 3.01%, the Europe Dow 4.24% and the Global Dow 4.38%.2,16i COmposite : the TSX Composite (-2.30%), the  gan’

COMMODITIES MARKETS

Performances were all over the place. While copper lost 0.63% and gold 0.34%, silver futures advanced 1.59% and platinum futures 2.98%. NYMEX crude fell 5.91% on the month and unleaded gasoline retreated 0.51%, but natural gas rose 0.39%. Among the major crop futures, sugar (+4.12%) and cocoa (+1.29%) were the gainers. Soybeans lost only 0.04%, but deeper October losses were in store for wheat (1.69%), corn (3.00%), coffee (7.59%) and cotton (11.50%). The U.S. Dollar Index lost 0.02 points on the month to wrap up October at 80.20.17,18

REAL ESTATE

Existing home sales fell 1.9% in September, but the National Association of Realtors said that the median home price was $199,200 – up 11.7% in the past 12 months, which marked the tenth consecutive month of double-digit annual price increases. August’s overall S&P/Case-Shiller Home Price Index mirrored this trend – it had prices up 12.8% year-over-year, improved from 12.3% in the July edition. NAR noted a 5.6% dip in pending home sales for September. October ended without September new home sales or new residential construction reports from the Census Bureau.4,19

Mortgage rates fell, with one exception. Comparing Freddie Mac’s October 31 and September 26 Primary Mortgage Market Surveys, we see the following decreases: 30-year FRMs, 4.32% to 4.10%; 15-year FRMs, 3.37% to 3.20%; 5/1-year ARMs, 3.07% to 2.96%. Interest rates on 1-year ARMs rose 0.01% in October to 2.64%.20

LOOKING BACK…LOOKING FORWARD

The S&P 500 closed at 1,756.54 on Halloween, while the Dow settled at 15,545.75 and the NASDAQ at 3,919.71. Small caps pushed higher as well: the Russell 2000 gained 2.45% last month, ending October at 1,100.15.2

 

% CHANGE

YTD

1-MO CHG

1-YR CHG

10-YR AVG

DJIA

+18.63

+2.75

+18.70

+5.86

NASDAQ

+29.81

+3.93

+31.66

+10.29

S&P 500

+23.16

+4.46

+24.39

+6.72

REAL YIELD

10/31 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.40%

-0.78%

3.14%

1.93%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 10/31/132,21,22

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

These returns do not include dividends.

 

Now we come into what is traditionally a sweet spot for the stock market – the fall. As the federal shutdown altered some of the data collection and research processes that normally go into the economic reports out of Washington, the market may take the upcoming editions of those reports with a few grains of salt. Private-sector reports may carry more weight this month and next. There is a sense of normalcy, as the market has again been concentrating on earnings – and normalcy is good for a mature bull market. The next big test for stocks will come in mid-December – will the new congressional supercommittee meet its deadline to craft a multi-year deficit reduction plan for the federal budget? If it doesn’t, we may have a replay of the October impasse on Capitol Hill – and a sense of déjà vu on Wall Street.

UPCOMING ECONOMIC RELEASES: As you will notice, the data stream is a bit off-kilter for November. Just ahead, we have August and September factory orders (11/4), the October ISM service sector PMI (11/5), September’s Conference Board leading indicators (11/6), the October Challenger job-cut report and the federal government’s delayed first estimate of Q3 GDP (11/7), the Labor Department’s October jobs report, the University of Michigan’s initial November consumer sentiment index and Commerce Department figures on September consumer spending (11/8), September wholesale inventories and October industrial production (11/15), the November NAHB housing market index (11/18), September business inventories, October’s CPI, retail sales and existing home sales and the October 30 FOMC minutes (11/20), the October PPI (11/21), October pending home sales, September and October housing starts and building permits, the September Case-Shiller and FHFA housing price indices, the second estimate of Q3 GDP and the Conference Board’s November consumer confidence survey (11/26), October consumer spending and durable goods orders and the final November University of Michigan consumer sentiment index (11/27). Thanksgiving falls on November 28, and due to the long weekend accompanying the holiday, there will be no further major economic releases until December. When will the Census Bureau put out some new home sales data? A combined September/October report is scheduled to appear December 4.


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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.

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.

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.

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 S&P / Case-Shiller U.S. National Home Price Index measures the change in the value of U.S. residential housing market. The S&P / Chase-Shiller  U.S. National Home Price Index tracks the growth in value of real estate by following the purchase price and resale value of homes that have undergone a minimum of two arm’s-length transactions. The index is named for its creators, Karl Case and Robert Shiller.

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 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.

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

The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization.

The Mexican IPC index (Indice de Precios y Cotizaciones) is a major stock market index which tracks the performance of leading companies listed on the Mexican Stock Exchange.

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 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 IDX Composite or Jakarta Composite Index is an index of all stocks that are traded on the Indonesia Stock Exchange (IDX).

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).

The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets.

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

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

The Global Dow is a 150-stock index of corporations from around the world created by Dow Jones & Company.

The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies.

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 – chicagotribune.com/news/chi-government-shutdown-20131016,0,1118789.story [10/17/13]
2 – online.wsj.com/mdc/public/page/2_3024-m_globalstockindexes.html [10/31/13]
3 – swampland.time.com/2013/10/17/heres-what-the-government-shutdown-cost-the-economy/ [10/17/13]
4 – briefing.com/investor/calendars/economic/2013/10/28-01 [11/1/13]
5 – tinyurl.com/lqwsp7p [10/25/13]
6 – stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-360718/ [10/22/13]
7 – arkansasonline.com/news/2013/oct/30/sebelius-apologizes-health-law-rollout-problems/ [10/30/13]
8 – arstechnica.com/information-technology/2013/10/healthcare-gov-deferred-final-security-check-could-leak-personal-data/ [10/30/13]
9 – ism.ws/ismreport/mfgrob.cfm [11/1/13]
10 – ism.ws/ISMReport/NonMfgROB.cfm [10/3/13]
11 – bloomberg.com/news/2013-10-30/fed-keeps-85-billion-qe-pace-awaiting-signs-economy-picks-up.html [10/30/13]
12 – money.cnn.com/2013/10/30/news/economy/social-security-benefits/ [10/30/13]
13 – bloomberg.com/news/2013-11-01/manufacturing-strengthens-from-china-to-south-korea-economy.html/ [11/1/13]
14 – tinyurl.com/qf55s9c [11/2/13]
15 – nytimes.com/2013/10/25/business/international/europes-economy-shows-modest-signs-of-life.html [10/25/13]
16 – mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [10/31/13]
17 – money.cnn.com/data/commodities/ [10/31/13]
18 – online.wsj.com/mdc/public/npage/2_3050.html?mod=mdc_curr_dtabnk&symb=DXY [10/31/13]
19 – latimes.com/business/money/la-fi-mo-existing-home-sales-20131021,0,6791691.story#axzz2jcIkT3V1 [10/21/13]
20 – freddiemac.com/pmms/ [11/3/13]
21 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F31%2F12&x=0&y=0 [11/3/13]
21 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F31%2F12&x=0&y=0 [11/3/13]
21 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F31%2F12&x=0&y=0 [11/3/13]
21 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F31%2F03&x=0&y=0 [11/3/13]
21 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F31%2F03&x=0&y=0 [11/3/13]
21 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F31%2F03&x=0&y=0 [11/3/13]
22 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/3/13]

CFGIowa Weekly Economic Update November 4, 2013

TAME INFLATION, 1.5% BOOST FOR SOCIAL SECURITY

Yearly inflation hit a 5-month low of 1.2% in September – the Labor Department noted a 0.2% rise in the headline Consumer Price Index. The core CPI rose 0.1%, with yearly core inflation at 1.7%. (Producer prices dipped 0.1% in September after a 0.3% advance in August.) With inflation so mild, the Social Security Administration announced a mere 1.5% increase in monthly benefit payments for 2014.1,2

MANUFACTURING SECTOR KEEPS GROWING

The Institute for Supply Management’s (ISM) manufacturing index rose 0.2 points in October to 56.4. This marks a 2013 peak for the index. American factory activity grew for a fifth straight month.3

RETAIL SALES HOLD UP; CONSUMER CONFIDENCE DIPS

While headline retail purchases declined 0.1% in September, the Census Bureau said retail sales were up 0.4% excluding autos. The Conference Board’s consumer confidence index fell 9.0% to 71.2 in October; chalk it up to the shutdown.4

HOT & COLD NEWS OUT OF THE HOUSING MARKET

Pending home sales fell again in September; the National Association of Realtors reported a 5.6% dip after a 1.6% retreat in August. August’s S&P/Case-Shiller Home Price Index, however, saw a 12.8% annual gain in house prices across 20 cities.4

FED STANDS PAT, S&P RISES A BIT MORE

On October 30, the Federal Reserve announced no tapering of QE3 (Quantitative Easing) and no change to interest rates. This helped the S&P 500 go +0.11% for the week and close at 1,761.64 on Friday. The Dow settled at 15,615.55 Friday, rising 0.28% for the week; the NASDAQ lost 0.54% in five days to settle Friday at 3,922.04.5,6,7

THIS WEEK: Monday brings earnings from CME Group, HSBC, Vulcan Materials and Tenet Healthcare. ISM’s October non-manufacturing index arrives Tuesday, along with Q3 results from AOL, Liberty Interactive and Tesla Motors. Wednesday offers earnings from Toyota, Time Warner and Icahn Enterprises and the Conference Board’s September LEI index. Thursday offers earnings from Wendy’s, Apache, Tim Hortons, Disney and Groupon, new initial claims figures and the federal government’s first take on Q3 GDP. Friday sees the release of the Labor Department’s October jobs report, the Commerce Department’s September consumer spending report, the University of Michigan’s initial November consumer sentiment index and Q3 results from Tesoro Logistics and Leap Wireless.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+19.17

+18.01

+13.49

+5.93

NASDAQ

+29.89

+29.87

+25.58

+10.30

S&P 500

+23.52

+23.40

+16.37

+6.77

REAL YIELD

10/25 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.50%

-0.77%

3.14%

1.93%

Sources: usatoday.com, bigcharts.com, treasury.gov – 11/1/136,8,9,10

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»

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.

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.

The S&P / Case-Shiller U.S. National Home Price Index measures the change in the value of U.S. residential housing market. The S&P / Chase-Shiller  U.S. National Home Price Index tracks the growth in value of real estate by following the purchase price and resale value of homes that have undergone a minimum of two arm’s-length transactions. The index is named for its creators, Karl Case and Robert Shiller.

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.

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 – bloomberg.com/news/2013-10-30/consumer-prices-in-u-s-rise-as-forecast-on-gain-in-fuel-costs.html [10/30/13]
2 – blogs.marketwatch.com/encore/2013/10/30/social-securitys-2014-raise-a-modest-1-5/ [10/30/13]
3 – ism.ws/ismreport/mfgrob.cfm [11/1/13]
4 – briefing.com/investor/calendars/economic/2013/10/28-01 [11/1/13]
5 – usatoday.com/story/money/business/2013/10/30/fed-october-meeting/3308411/ [11/1/13]
6 – usatoday.com/money/markets/overview/ [11/1/13]
7 – google.com/finance?q=INDEXDJX%3A.DJI%2CINDEXSP%3A.INX%2CINDEXNASDAQ%3A.IXIC&ei=PRt0UqjpHuGuiQKpyQE [11/1/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F1%2F12&x=0&y=0 [11/1/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F1%2F12&x=0&y=0 [11/1/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F1%2F12&x=0&y=0 [11/1/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F31%2F08&x=0&y=0 [11/1/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F31%2F08&x=0&y=0 [11/1/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F31%2F08&x=0&y=0 [11/1/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F31%2F03&x=0&y=0 [11/1/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F31%2F03&x=0&y=0 [11/1/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F31%2F03&x=0&y=0 [11/1/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/1/13]
10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/1/13]