Stocks rose modestly this week and treasury bonds declined as yields rose.  Commodities, including oil fell.  Overall, I think the outlook for the US economy is positive.  I believe holiday retail sales will be strong given the low gasoline prices.  China has taken steps to open their security and currency markets and the US and China announced agreements on reducing military tension, reducing carbon emissions and improving free trade.  Geopolitical risk is elevated somewhat as Russia sent military hardware into eastern Ukraine and announced bomber flights to the Caribbean and the Gulf of Mexico, something that never happened during the cold war.

In economic numbers this week:

• European factory output rose 0.6% in September, slightly less than expected.
• The Labor Department reported that first time claims for unemployment rose 12,000 to a seasonally adjusted 290,000 in the prior week, more than forecast.  The four week moving average of claims also rose to 285,000.  Still this was the longest string of sub 300,000 initial claims since 2000.
• The Commerce Department reported that US retail sales rose 0.3% in October more than forecast.  Excluding gasoline purchases, retail sales rose 0.5%.
• The 18 nation Eurozone grew at a sluggish 0.6% annual pace in the third quarter.  Spain and Greece reported the highest annualized growth rates of 2.0% and 2.8% respectively, an encouraging sign that economic reforms there are producing results.
• The Labor Department reported that US Import Prices fell 1.3% in October from September and were down 1.8% from the previous year.  Excluding petroleum, import prices fell 0.1% in October.