The Dow and the S&P 500 indexes were little changed in a volatile week. The Nasdaq had modest gains while small company and foreign stocks fared much better. Apart from earnings announcements, traders largely moved based on prospects for tax reform. A significant selloff on Wednesday, after one Senate Republican said he would not vote for the bill and others expressed concerns, was reversed on Thursday as the House passed its tax bill. A rebound from hurricane weakness was evident in industrial production and housing start numbers this week. The 10-year Treasury yield fell to 2.35% this week and the dollar depreciated against a basket of currencies. Crude oil saw significant declines and gold had modest gains.
In the numbers, this week:
- The Federal Reserve Bank of New York reported that household debt increased 0.9% in the third quarter. Delinquency rates remain relatively low, however auto loan delinquencies are rising.
- The Federal Reserve reported
- Manufacturing rose a very strong 1.3% in October, rebounding from hurricanes.
- Industrial production which includes manufacturing, mines and utilities rose 0.9%. From a year earlier industrial production was up 2.9% in October.
- The Labor department reported:
- Producer prices rose 0.4% in October and are up 2.8% from a year ago. Excluding volatile food and energy, producer prices also rose 0.4% and 2.4% from a year ago.
- Consumer prices rose 0.1% in October. From a year earlier consumer prices were up 2.0%. Excluding volatile food and energy, prices were up 0.2% in October and 1.8% from a year ago.
- Initial claims for unemployment in the prior week rose 10,000 to a seasonally adjusted 249,000. The four-week moving average of claims rose 6,500 to 237,750. The increase was attributed to a backlog of claims in Puerto Rico.
- The Commerce Department reported:
- Retail sales rose 0.2% in October mainly due to auto sales. From a year ago retail sales were up 4.6%.H
- Housing starts rose a sharp 13.7% in October from September, rebounding in the wake of the hurricanes. For the first 10 months of 2017 housing starts were up 2.4%. Single family housing starts were up 8.4% while multifamily starts were down 9.9%.
- Housing permits, an indicator of future housing activity, rose 5.3% in October.
- China reported:
- Industrial output rose only 6.2% in October from a year ago, down from 6.6% in September. The slowdown was attributed to tighter pollution controls and a closing of factories in northern China to reduce excess supply.
- Fixed asset investment for January through October was up 7.3%, down from 7.5% in January through October.
- The International Energy Agency lowered its forecast for oil demand increase this year and next by 100,000 barrels per day to an increase of 1.5MM barrels per day this year and 1.3MM barrels per day next year. The demand forecast was lowered based on higher prices and globally milder weather this fall. (not Michigan in the past couple of weeks)
- The Energy Information Administration’s Weekly Petroleum Data report is here: wpsrsummary (10). In addition, the EIA reported:
- Baker Hughes reported that oil drilling rigs were unchanged 738. Gas drilling rigs rose 8 to 177.
Please call us if you have any questions.
Loren C. Rex, CFP®, AIF®, MA Erik Smith
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.