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Economic Update 10.30.14

GAINS IN NEW & EXISTING HOME SALES

According to the National Association of Realtors, the pace of resales improved 2.4% in September. NAR reported fewer sales of distressed properties and more home sales to families versus investors. The Census Bureau measured only a 0.2% rise in new home buying last month, but a 17.0% annualized advance.

LITTLE INFLATION PRESSURE, LESS PRESSURE ON FED

September saw both the headline and core Consumer Price Index rise 0.1%, putting the yearly gain for each at 1.7%. If inflation continues to be so mild, the Federal Reserve may choose to stand pat on interest rates well into 2015. Food prices are up 3.0% over the past year, but energy prices have fallen 0.6%.

LEADING INDICATORS STAGE SEPTEMBER CLIMB

The Conference Board’s Leading Economic Index rose 0.8% last month to 104.4 after a flat August, suggesting solid Q4 economic growth. It rose 1.1% back in July.

STOCKS SURGE 4% IN A WEEK

Earnings beat forecasts, and investors bought back in: in five days, the S&P 500 rose 4.12% to 1,964.58, the Dow 2.59% to 16,805.41 and the Nasdaq 5.29% to 4,483.72.

THIS WEEK: The NAR issues a new pending home sales report Monday, joining earnings from Allergan, Amgen, Burger King, Omega Healthcare, T-Mobile, Twitter, Merck, HealthSouth and Eastman Kodak. Tuesday offers the August Case-Shiller home price index, a new Conference Board consumer confidence index, September hard goods orders and earnings from Aetna, Aflac, Anadarko Petroleum, Ameriprise, Cummins, U.S. Steel, Whirlpool, BP, AutoNation, UBS, Macerich, Martin Marietta, Novartis, Panera, Marriott, Coach, Sirius XM, PG&E, Sherwin-Williams, Starwood Hotels, Spirit Airlines, Pfizer and Electronic Arts. The Federal Reserve makes a policy statement Wednesday, and Avis, Baidu, Kraft, Deutsche Bank, Hershey, Hyatt, Sodastream, WellPoint, Waste Management, VISA, Revlon, Goodyear, Kraft, LG, MetLife, Norwegian Cruises, LifeLock, Ralph Lauren, CBRE, Garmin and Barrick Gold all release earnings. Thursday brings a first estimate of Q3 GDP, a speech by Janet Yellen at a Fed conference, a new initial claims report and earnings from Altria, Avon, Constellation Software, Expedia, Fluor, Samsung, Royal Dutch Shell, GoPro, ConocoPhillips, Marathon Petroleum, Public Storage, Starbucks, Mosaic, Newmont Mining, CME, Groupon, MasterCard, Tesoro, Time Warner Cable, Cigna, Kellogg, Live Nation and LinkedIn. Friday, September’s personal spending report and the final University of Michigan consumer sentiment index appear along with earnings from Chevron, Clorox, Exxon Mobil, Hilton and Weyerhaeuser.

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