Major stock indices ended the week substantially lower as uncertainty remains over Middle East tensions and treasury bond yields continue to rise.  Retail sales came in much stronger than expectations and layoffs remain near historic lows.  FED chair Powell indicated that the FED could suspend further rate hikes if inflation continues to trend lower..

Treasury bond yields rose sharply with the 30-year bond yield at 5.093% and the 10-Year note at 4.928%.  Freddie Mac reported that the average 30-year mortgage rate rose to 7.63%.  Crude oil rose to $89.02 a barrel and natural gas fell to $2.924 per MMBTUs.  The U.S. dollar index fell to 106.16 and gold soared to $1991.10 an ounce.

• China’s National Bureau of Statistics reported that its economy in the third quarter grew 4.9% from a year ago, beating expectations.  Still China’s real estate sector is providing a big challenge.
• The National Association of Realtors reported that existing home sales fell 2.0% in September and are down 15.4% from a year ago.
  • The inventory of unsold homes rose 2.7% in September and are at a 3.4-month supply.
• The Commerce Department reported that retail sales rose 0.7% in September and were up 3.8% from a year ago.
  • August retail sales were revised to a 0.8% gain.

• • Housing starts rose 7.0% in September from the revised August level but are down 7.2% from a year ago.
    • Single-family starts rose 3.2%.
    • Multi-family starts rose 17.1%.
    • Permits, a sign of future housing starts, fell 4.4%.

• The Federal Reserve reported that industrial production rose 0.3% in September and is up 0.1% from a year ago.
  • Manufacturing production rose 0.4%.
  • Mining production, including oil and gas production rose 0.4%.
  • Utility production fell 0.3%.
• The Labor Department reported:
  • Seasonally adjusted first-time claims for unemployment were 198,000, a decrease from a revised 211,000 last week.
    • The 4-week moving average of claims, designed to smooth out volatility, was 205,750, a decrease of 1000 from the previous week’s revised level. 
    • 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 13.2MM BPD.
  • Natural gas storage rose 97BN cubic feet and is above the 5-year average at this time of year.
• Baker Hughes reported the number of active oil rigs rose 1 to 502.  The number of active natural gas rigs rose 1 to 118.
• Factset reported with 17% of S&P 500 companies reporting 3^rd quarter earnings, the blended earnings decrease from last year was 0.4%.

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

Founder / Emeritus                                                                            President & C.E.O.                                  

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.

Sources:

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W

https://ir.eia.gov/ngs/ngs.html

https://www.freddiemac.com/pmms

https://www.wsj.com/market-data?mod=nav_top_subsection

https://bakerhughesrigcount.gcs-web.com/na-rig-count

https://www.census.gov/economic-indicators

https://www.bls.gov/news.release/ppi.nr0.htm

https://www.nar.realtor/newsroom/existing-home-sales-fell-2-0-in-september