Major U.S. stock indices rose this week while developed international and emerging markets fell.  The markets continued to gain through Wednesday anticipating that we have seen the last of rate increases for this cycle.  However, the markets sold off following Fed Chair Powell’s comments Thursday indicating that there may be more tightening ahead.  Despite this, stocks continued to rise on Friday.  One catalyst for higher stock prices has been overall positive increases in 3^rd quarter earnings.

The European Central Bank Governing Council member Francois Villeroy de Galhau said that barring unforeseen shocks, the ECB is done hiking rates as inflation has fallen sharply in the EU and continues to trend down.

Treasury bond yields rose with the 30-year bond yield at 4.739% and the 10-Year note at 4.618%.  (Last week the 30-year bond was at 4.703% this was incorrectly shown as 5.703%.)  Freddie Mac reported that the average 30-year mortgage rate fell to 7.5%.  Crude oil fell to $77.34 a barrel and natural gas fell to $3.290 per MMBTUs.  The U.S. dollar index rose to 105.80 and gold fell to $1941.60 an ounce.

• The Federal Reserve reported consumer credit rose 0.4% in the third quarter.
  • Revolving credit (credit cards) increased at an annual rate of 8.6%.
  • Non revolving credit increased at an annual rate of 2.4%.
  • The Commerce Department reported:
    • The trade deficit increased by 4.9% in September.

• • Wholesale inventories increased 0.2% in September. 
    • Wholesale sales were up 2.2%.
    • The ratio of wholesale inventories to sales fell to 1.3.

• The Labor Department reported:
  • Seasonally adjusted first-time claims for unemployment were 217,000, an decrease from the previous week’s revised level of 221,000.
    • The 4-week moving average of claims, designed to smooth out volatility, was 212,250, an increase of 1500 from the previous week’s revised level. 
    • For the full unemployment report go here:  https://www.dol.gov/ui/data.pdf .
• The Energy Information Agency Administration did not issue reports this week while it institutes a systems upgrade.
• Baker Hughes reported the number of active oil rigs fell 2 to 494.  The number of active natural gas rigs was unchanged at 118.
• Factset reported with 92% of S&P 500 companies reporting 3^rd quarter earnings, the blended earnings increase from last year is 4.1%.

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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.federalreserve.gov/releases/g19/current/default.htm