Major U.S. stock indices rose again last week with the biggest increase in the small cap Russell 2000.  International developed and emerging markets indices fell again.  As Q3 earnings season is in full swing, individual companies’ performance is largely affected by earnings and forecasted earnings.  Oil prices fell on signals that Israel will not target Iranian oil facilities.

The ECB met and cut its benchmark interest rate by 0.25% to 3.25%, citing a weakening economy and inflation falling below 2.0%.  

Treasury bond yields fell with the 30-year bond yield at 4.383% and the 10-Year note at 4.078%.  Freddie Mac reported that the average 30-year mortgage rate rose to 6.44%.  Crude oil fell to $69.42 a barrel and natural gas fell to $2.264 per MMBTUs.  The U.S. dollar index rose to 103.46 and gold rose to $2713.70 an ounce.

In economic reports this week:

• China’s growth rate slowed in the third quarter to an annual rate of 4.6%.
• The Federal Reserve reported that industrial production fell 0.3% in September and is down 0.6% from a year ago.
  • Manufacturing fell 0.4% and was down 0.5% from a year ago.
  • Mining, including oil and gas production, fell 0.6% and was down 2.2% from a year ago.
  • Utility production rose 0.7% and was up 0.6% from a year ago.
• The Commerce Department reported:
  • The seasonally adjusted advanced estimate of retail sales rose 0.4% in September.
    • Excluding motor vehicles, parts and gas stations, retail sales rose 0.7%.

• The Labor department reported:
  • Seasonally adjusted first-time claims for unemployment were 241,000, a decrease of 19,000 from the previous week’s revised level.  
    • The 4-week moving average of claims, designed to smooth out volatility, was 236,250 an increase of 4750 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 rose from 13.4MM BPD to a new record of 13.4MM BPD.
  • Natural gas storage rose 76BN cubic feet and is above the average level during the past five years at this time of year.
• Baker Hughes reported the number of oil rigs rose 1 to 482 and the number of natural gas rigs fell 5 to 99.
• Factset reported with 14% of S&P 500 companies reporting Q3 earnings the blended earnings increase is 3.4% from a year ago.

Please call us if you have any questions.

Loren Rex – Emeritus

Erik A Smith, AIF® – 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. The Dow Jones Industrial Average, Dow Jones, or simply the Dow, is a stock market index of 30 prominent companies listed on stock exchanges in the United States. The DJIA is one of the oldest and most commonly followed equity indexes. The Nasdaq Composite is a stock market index that includes almost all stocks listed on the Nasdaq stock exchange (more than 2500 stocks).

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/g17/current/