Weekly Economic Review (October 28 - November 1, 2013).


US stock indexes closed higher this week amid strong earnings, better than expected economic data, and the Federal Reserve's decision to maintain its bond buying.

In its statement, the Fed said it would keep buying $85 billion of bonds per month, but removed a phrase from a previous statement expressing worries about credit conditions. Some investors interpreted the Fed's statement as relatively less dovish which weighed on Gold prices.

Following a partial government shutdown, economists that had expected the Fed to begin winding down the $85 billion monthly bond-buying program this year are now doubtful and expect tapering to take place in the first half of 2014. This news bodes well for the market that has been making new highs on Fed fuel despite not so impressive economic growth.

Following is an economic review for the week October 28 - November 1, 2013.

Monday, October 28

US Industrial Production:

Industrial production increased 0.6% in September, following a gain of 0.4% in August, helped by a 4.4% increase in utilities output.

US Pending Home Sales:

US pending home sales plunged 5.6% in September, indicating that slow economic growth and rising mortgage rates are hurting US housing market.

Tuesday, October 29

US Retail Sales:

US retail sales excluding automobiles, gasoline and building materials, increased 0.5% in September after a 0.2% gain in August.The increase reflected sales of Apple's new iPhones. Those sales also boosted receipts at non-store retailers, which increased 0.4% in September.

US Producer Price Index:

US producer price index fell 0.1% in September from August. The decline was primarily the result of an 18% decline in fresh-vegetable prices.

CB Consumer Confidence:

CB consumer confidence declined to 71.2 in October, down from 79.7 and missing economist expectations of 75. Consumer confidence deteriorated considerably mainly due to the federal government shutdown and debt-ceiling crisis.

Wednesday, October 30

ADP Non-Farm Employment Change:

US non-farm private employment rose at the weakest pace in six months in October, fueling concerns over US labor market. The ADP report estimated that private sector added 130K workers, below economists' consensus estimate for 150K.

US Consumer Price Index:

The consumer price index increased 0.2% in October, matching estimates, after rising 0.1% in September. Excluding volatile components such as food and fuel, the so-called core measure climbed 0.1% for October.

US Crude Oil Inventories:

US crude oil inventories increased by 4.1 million barrels for the week ended October 25 when compared to the previous week, well above expectations for an increase of 2.3 million barrels. T

FOMC Statement:

The Federal Reserve kept its monetary policy unchanged. However, the FOMC statement was relatively dovish compared to what the markets had expected — The FOMC statement said the US economy made improvements in recent months but expressed caution for elevated unemployment levels.

Thursday, October 31

US Unemployment Claims:

Unemployment claims fell 10K to a seasonally adjusted 340K vs. expectations of a decline to 335K.

Canada GDP (m/m):

Canadian economy grew at a modest pace of 0.3% in August vs. expectations of a 0.2% increase, thanks to strong growth in the oil and gas industry. Mining, oil and gas extraction increased 1.9%, including a 2.8% gain in oil and gas extraction.

China Manufacturing PMI:

China Manufacturing PMI beat expectations of 51.2 with a reading of 51.4 (above 50 indicates expansion) in October, reaching its highest level in 18 months. The official PMI report suggested China's economic growth is on track to reach the government's 7.5% target.

Friday, November 1

UK Manufacturing PMI:

UK Manufacturing PMI declined to 56 from a downwardly revised expected number of 56.3 and vs. expectations of 56.1. Although overall manufacturing activity indicated slow growth, export orders grew at their fastest pace in more than two years.

US ISM Manufacturing PMI:

Manufacturing activity held steady at a high level last month despite the government shutdown — ISM Manufacturing PMI grew to 56.4 in October from 56.2 in September.


Commentary by:
Adil Yousuf

This commentary is for informational purposes only and does not constitute investment advice. The opinions offered herein are not recommendations to buy, sell or hold securities. Market IQ expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Economy , Commodities , US Markets

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