Most major stock indices ended the week with small losses, except the Dow 30 Industrials eking out a very slight gain.  Home sales continue to fall and oil prices fell substantially this week.  Any enthusiasm for slower growth/inflation was offset by hawkish comments from Federal Reserve members.

Treasury bond yields were mixed with the 30-year bond down to 3.925% and the 10-Year note up to 3.821%.  30-year mortgage ended little changed at 6.92%.  Crude oil fell to $80.38 a barrel and natural gas rose to $6.76 per MMBTUs.  The U.S. dollar index rose to 106.98 and gold fell to $1750.60 an ounce.

• Japan reported that its gross domestic product shrank at a 1.2% annualized pace in the third quarter.
• China reported industrial production in October was 5.0% higher than a year ago, down from the 6.3% year over year in September.
• The U.K. reported that inflation in October was 11.1% from a year ago, up from 10.1% in September.
• The National Association of Realtors reported that existing home sales fell 5.9% in October and have fallen 28.4% from a year ago.
• The Federal Reserve reported that household debt increased 2.2% in the third quarter.  This was the fastest increase in 15 years. 
  • From a year ago, household debt has increased 8.3%.
  • The largest contributors to the debt increase were mortgage debt and credit card debt.
  • Delinquencies have increased but remain at historically low levels.
  • Foreclosures also remain low.
• The Commerce Department reported that retail sales rose a robust 1.3% in the month of October.  Retail sales are not adjusted for inflation.
  • Higher gasoline prices and increased spending on automobiles were attributed to the increase.
  • Auto sales have increased as supply chains have recovered and production has increased.
• The Labor Department reported:
  • The producer-price index rose 0.2% in October, a slowdown from previous months.  From a year ago, the index is up 8.0% down from 8.4% in September.
    • Core producer prices, excluding volatile food and energy also rose 0.2% in October and 5.4% from a year ago, down from 5.6% a year earlier.
  • Seasonally adjusted first-time claims for unemployment were 222,000, down from a revised 226,000 in the prior week.

• • • The 4-week moving average of claims, designed to smooth out volatility, was 221,000 up from a revised 219,000.
    • For the full unemployment report go here:  https://www.dol.gov/ui/data.pdf .
• The EIA weekly oil report is here: http://ir.eia.gov/wpsr/wpsrsummary.pdf .  Also, the EIA reported in the prior week:
  • Field production of crude oil was unchanged at 12.1MM BPD.
  • Natural gas storage rose 64BN cubic feet and at the 5-year average at this time of year.
• Baker Hughes reported the number of active oil rigs rose 1to 623.  The number of active natural gas rigs rose 2 157.
• Factset reported with 94% of S&P500 companies reporting Q3 earnings, the blended earnings increase is 2.2%.

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  Loren C. Rex, CFP^®, MA                                                                     Erik A Smith, AIF®

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  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.