Economists polled by Dow Jones Newswires thought non-farm payrolls would increase by about 60,000 for October. In a pleasant surprise, the economy added 151,000 jobs instead. While the jobless rate remained at 9.6% for October, Labor Department data showed the economy adding jobs for the first time in five months – a development implying moderate growth instead of a “double dip” recession.1
TWO MORE SIGNALS OF EXPANSION
The Institute for Supply Management released its October assessments of the manufacturing and service sectors last week, and both ISM indices showed improvement. The manufacturing index climbed to 56.9 from 54.4 and the service sector index improved to 54.3 from September’s 53.2 reading.2
CONSUMERS SPEND A BIT MORE
September’s personal spending gain wasn’t that impressive – just 0.2%. Economists surveyed by Bloomberg had forecast a 0.4% increase in for the month. The Commerce Department data also showed a 0.1% decrease in personal income, the first such reduction since July 2009.3
PENDING HOME SALES SUDDENLY SLIP
They fell by 1.8% in September, according to the National Association of Realtors. They haven’t declined in three months. September 2010 pending sales were 24.9% underneath year-ago levels.4
STOCKS HIT 2010 HIGHS
The Dow, S&P 500 and NASDAQ quickly reached YTD peaks after the Federal Reserve announced its plans to buy $600 billion worth of Treasuries over the next eight months. Here is how the big three performed last week: Dow, +2.93% to 11,444.08; S&P 500, +3.60% to 1,225.85; NASDAQ, +2.85% to 2,578.98. Some key commodities took off as well – oil prices gained $5.42 on the week, gold gained $40.20 across five days to close at $1,397.30 on the COMEX Friday, and copper advanced 5.68% for the week.5,6,7
COMING NEXT WEEK: The schedule of economic releases is very light. Tuesday, we have data on September wholesale inventories. Wednesday, we have initial jobless claims for 11/6 and continuing claims as of 10/30. Friday, we get the initial October survey of consumer sentiment from the University of Michigan.
(Click on the picture below to enlarge the table in a new window.)
WEEKLY QUOTE
“The book you don’t read won’t help.”
– Jim Rohn
Best Regards,
Kevin Kroskey
Citations.
1 – online.wsj.com/article/SB10001424052748704353504575596060581399440.html [11/5/10]
2 - ism.ws/ISMReport/NonMfgROB.cfm [11/3/10]
3 - blogs.barrons.com/stockstowatchtoday/2010/11/01/markets-open-higher-despite-spending-woes [11/1/10]
4 - dailyfinance.com/story/real-estate/september-pending-home-sales-drop-uneven-economic-recovery/19704428/ [11/5/10]
5 - csmonitor.com/Business/2010/1103/Federal-Reserve-to-buy-600-billion-in-bonds-as-hedge-against-deflation [11/3/10]
6 - cnbc.com/id/40032470 [11/5/10]
7 - blogs.wsj.com/marketbeat/2010/11/05/data-points-energy-metals-396/ [11/5/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=11%2F5%2F09&x=0&y=0 [11/5/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=11%2F5%2F09&x=0&y=0 [11/5/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=11%2F5%2F09&x=0&y=0 [11/5/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=11%2F4%2F05&x=0&y=0 [11/5/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=11%2F4%2F05&x=0&y=0 [11/5/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=11%2F4%2F05&x=0&y=0 [11/5/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=11%2F6%2F00&x=0&y=0 [11/5/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=11%2F6%2F00&x=0&y=0 [11/5/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=11%2F6%2F00&x=0&y=0 [11/5/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [11/5/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [11/5/10]
10 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
