Major U.S. stock indices ended the week lower despite a rally on Friday. Developed foreign stocks ended the week higher and emerging markets stocks had strong gains.
The Federal Reserve raised short term interest rates 0.75% to a range of 3.75% to 4.00%. After the announcement, FED chair, Jerome Powell, hinted that future rate hikes, beginning in December, may be smaller but the peak rate next year may be higher than previously anticipated. The Bank of England also raised short term interest rates 0.75% to 3.0%. However, given the higher rates in the U.S. versus the U.K., the British Pound has continued to weaken, falling 2% after the announcement.
Treasury bond yields rose with the 30-year bond at 4.274% and the 10-Year note at 4.175%. 30 year mortgage rates rose to 7.41%. Crude oil rose to $92.60 a barrel and natural gas rose to $6.807 per MMBTUs. The U.S. dollar index rose to 110.75 and gold fell to $1684.20 an ounce.
* The Eurozone reported that inflation hit 10.7% in October from a year earlier.
* Energy prices were up 41.9%.
* Food prices were up 13.1%.
* Excluding volatile food in energy, core prices rose 5.0%, up from 4.8% in September.
* S&P Global released its purchasing managers indices for October. Keep in mind that anything over 50 represents expansion and under 50 represents contraction.
* U.S. manufacturing PMI fell from 52.0 in September to 50.4 in October.
* U.S. services PMI fell from 49.3 to 47.8.
* China manufacturing PMI rose from 48.1 to 49.2.
* China services PMI fell from 49.3 to 48.4.
* Japan manufacturing PMI fell from 50.8 to 50.7.
* Japan services PMI rose from 52.2 to 53.2.
* Eurozone manufacturing fell from 48.4 to 46.4.
* Eurozone composite PMI fell from 48.1 to 47.3.
* Canada manufacturing PMI fell from 49.8 to 48.8.
* Mexico manufacturing PMI was unchanged at 50.3.
* The Commerce Department reported that the U.S. trade deficit rose 11.6% in September as exports fell and imports rose. However, this follows five months of declines.
* The Labor Department reported:
* Job openings rose in September to 10.7MM, much higher than the 5.8MM unemployed people.
* Job quits fell slightly to 4.1M.
* The U.S. added 261,000 jobs in October, down from an upwardly revised 315,000 in September. The unemployment rose to 3.7% up from the 3.5% rate in September.
* Seasonally adjusted first time claims for unemployment were 217,000, down from a revised 218,000 in the prior week.
* The 4-week moving average of claims, designed to smooth out volatility, was 218,750 down from a revised 219,250.
* Field production of crude oil fell from 12.0MM BPD to 11.9MM BPD.
* Natural gas storage rose 107BN cubic feet and is below the 5-year average at this time of year.
* Baker Hughes reported the number of active oil rigs rose 3 to 613. The number of active natural gas rigs fell 1 to 155.
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Loren C. Rex, CFP®, MA Erik A Smith, AIF®
Founder / Emeritus President & C.E.O. 269-441-4143 517-795-2025
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.