Markets had a terrible week. Why? Part of it is concern over the 10-year staying at about 3%. But much of it was centered on the Fed, and Fed Chair Powell’s implication the Fed was a long way from stopping their gradual raising of their interest rate. Friday’s rally helped, but Markets have been generally down since Powell made those comments in an interview with PBS on October 3rd. Markets were extremely volatile last Thursday and Friday. But Friday was an important test: the futures on Friday morning were good and indicated a strong opening. The question was whether the Markets could sustain the strong opening thru the trading day… and they did.
Several inflation data points came out last week. The Producer Price Index (more of a wholesale index) was up +0.2% as expected for September. Year-over-year the number dropped from +2.8% down to +2.6%. The Consumer Price Index only increased +0.1% last month, but also dropped on the year-over-year basis from +2.7% down to +2.4%. Markets liked the lower inflation data.
The economic focus of the week: After all the focus on the Fed, their latest minutes from their meeting three weeks ago will be released Wednesday afternoon. Further dissection is likely.
Retail sales numbers for September get released on Monday morning. Last month the growth was only +0.1%, with expectations this month for +0.6%.
Earnings season continues. Some of the companies reporting this week: Bank of America, Cleveland-Cliffs, CSX, IBM, Johnson & Johnson, KeyCorp, Morgan Stanley, Netflix, PPG, Proctor & Gamble, Progressive, and UnitedHealth (NE Ohio companies bolded).
Indicator focus: September’s retail sales (Mon); September’s industrial production (Tue); September’s housing starts, FOMC minutes (Wed); October’s Philly Fed business outlook (Thu); and September’s preliminary existing home sales (Fri).
Hope you have a great week.
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