It was a choppy week with major stock indices ending mixed. The Nasdaq had a modest gain and international indexes were lower. One vaccine and one antibody treatment trial were postponed out of caution due to unexplained illnesses but Pfizer announced they could seek emergency-use authorization for their vaccine as early as late November if their current large late stage trial is successful. Stocks rose later in the week as the White House agreed to accept the national test and tracing plan and cost in the House bill. Still it is unknown if a comprehensive Covid relief/stimulus bill will pass before the election.
Many states have seen an increase in Covid cases and it is unknown at this point how much further restrictions will have to be imposed before a vaccine becomes widely available.
Treasury yields fell with the 30-year bond yield dropping to 1.532% and the 10-Year note falling to 0.743%. Crude oil rose to $40.78 a barrel and natural gas fell to $2.687 per MMBTUs. The U.S. dollar index rose to 93.72 and gold prices fell to $1902.90 an ounce.
In the economic numbers this week:
- The International Monetary Fund upgraded it’s forecast for the global economy. In June it predicted a 5.2% drop in global gross domestic product. The forecast is now upgraded to a 4.0% drop.
- The Social Security Administration announced that there would be a 1.3% cost of living increase in Social Security benefits next year.
- The Federal Reserve reported that U.S. industrial production fell a seasonally adjusted 0.6% in September after rising 0.4% in August. Industrial production is still 7.1% below February. Industrial production included the following:
- Manufacturing down 0.3% in September after rising 1.2% in August.
- Utility production fell 5.6% in September mainly due to less air conditioning.
- Mining output, including oil and gas increased 1.7% in September.
- Freddie Mac reported that the average 30-year fixed mortgage rate hit 2.81%, a record low going back nearly 50 years.
- The Commerce Department reported that U.S. retail spending increased 1.9% in September, much more than forecast.
- The Labor Department reported:
- A seasonally adjusted 898,000 workers filed initial claims for unemployment in the prior week, an increase of 53,000 from a revised 845,000 the week before. This was the highest weekly claims since August.
- Continuing claims fell to 10MM down from 11MM partly due to people exhausting unemployment claims.
- Consumer prices rose 0.2% in September and 1.4% from a year ago. Excluding often volatile food and energy prices were also up 0.2%. Used vehicle prices were up 6.7% and were attributed to most of the gain. Dining out rose 0.6% while grocery prices fell. Driving fuel prices fell 5%.
- From a year earlier, consumer prices have risen 1.4% and core prices, excluding food and energy, have risen 1.7%.
- The EIA weekly oil report is here wpsrsummary. Also, the EIA reported in the past week:
- Field production of crude oil fell from 11MM barrels per day to 10.5MM barrels per day.
- Natural gas storage rose by 46BN cubic feet and is above the highest level at this time of year during the past five years.
- Baker Hughes reported the number of active oil rigs rose 12 to 205. The number of active natural gas rigs rose 1 to 74.
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Loren C. Rex, CFP®, AIF®, MA Erik A Smith AIF®
President Managing Partner
Generations Financial Planning & Wealth Management 269-441-4143
77 E. Michigan Ave, Suite 140
Battle Creek, MI 49017
Carrie Fuce, Assistant 269-441-4091
Toll Free: 800-513-8180
Visit our Website: www.genfinplan.com
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.
These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice. The Indices mentioned are unmanaged and cannot be invested into directly.