Weekly Economic Update November 4, 2013

WEEKLY QUOTE “He who is not courageous enough to take risks will accomplish nothing in life.”       – Muhammad Ali           WEEKLY TIP Trying to curb runaway household spending? Abide by this rule: if you can’t pay cash for it, you can’t afford it.        WEEKLY RIDDLE How many times can you subtract the number 75 from 7,500?             Last week’s riddle: How could Gail drive her car from Cleveland to Miami with a flat tire?     Last week’s answer: It was her spare tire that was flat, not any of the four tires she was driving on.	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 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 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. % CHG 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 11/1 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.
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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]