Weekly Economic Update for October 15, 2012

October 16, 2012  |   News

October 15, 2012

Economists weren’t expecting the University of Michigan’s preliminary October consumer sentiment survey to show a major advance – but it did. The index came in at 83.1, notably better than September’s final 78.3 mark. While the much-watched consumer gauge is still well below a “normal” reading of 100, this was the highest reading since September 2007.1

Wholesale inflation rose 1.1% for September, according to the federal government’s Producer Price Index. The major influence: a 4.7% spike in energy prices. The core PPI (minus food and energy prices) was flat last month. In the past 12 months, the PPI has advanced 2.1%. Annualized wholesale inflation hasn’t been that pronounced since March.2

The Federal Reserve’s latest survey of current economic conditions in its 12 districts noted that consumer spending “was generally reported to be flat to up slightly since the last report” while overall economic activity had “generally expanded modestly.” On the heels of the final 1.3% estimate of Q2 GDP, all this was hardly surprising.3,4

The Q3 earnings season got off to an unimpressive start, and the major indices reacted with their worst weekly performances since late May: the Dow lost 2.07%, the NASDAQ 2.94% and the S&P 500 2.21%. Gold slipped 1.18% as well; oil, on the other hand, managed a 2.20% advance. Where did everything settle Friday? Oil ended the week at $91.86 per barrel and gold at $1,759.70 an ounce; the Dow closed at 13,328.85, the S&P at 1,428.59 and the NASDAQ at 3,044.11.1,5

THIS WEEK: Monday brings Q3 results from Citigroup and September retail sales figures from the Census Bureau. IBM, Intel, Coca-Cola, Goldman Sachs, Johnson & Johnson, United Health, Mattel, PNC Financial and State Street report earnings Tuesday; the September CPI also appears. Wednesday, Q3 results come in from Northern Trust, US Bancorp, American Express, Bank of America, PepsiCo, Bank of NY Mellon, Blackrock and eBay; data on September housing starts also arrives. Thursday, earnings are in from Morgan Stanley, Phillip Morris, Nokia, Google, Microsoft, Travelers, Union Pacific, Verizon, Fifth Third, Huntington AMD, Capital One, Chipotle and E-Trade, plus new initial claims figures and the Conference Board’s September leading indicators index. Friday, we get the numbers on existing home sales in September along with earnings from GE, Honeywell and McDonald’s.

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 10/12/121,6,7,8
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1 – money.msn.com/market-news/post.aspx?post=bc2367f2-d20e-4178-ba68-c8bf60b299d9 [10/12/12]
2 – www.nasdaq.com/article/us-producer-prices-rise-11-core-ppi-flat-20121012-00342#.UHh9YaCMLHp [10/12/12]
3 – www.hispanicbusiness.com/2012/10/10/fed_beige_book_report_calls_spending.htm [10/10/12]
4 – www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm [9/27/12]
5 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F12%2F11&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F12%2F11&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F12%2F11&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F12%2F07&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F12%2F07&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F12%2F07&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F11%2F02&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F11%2F02&x=0&y=0 [10/12/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F11%2F02&x=0&y=0 [10/12/12]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/12/12]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/12/12]
8 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]



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