Q3 GDP IMPRESSES, PERSONAL SPENDING DECLINES
Good news: America’s economy expanded 3.5% in the third quarter. The Commerce Department’s initial estimate topped the 3.1% consensus forecast of economists polled by MarketWatch, and offset September retreats in overall hard goods orders (1.3%) and personal spending (0.2%). Personal incomes rose 0.2% last month, the least since December; the dip in consumer spending was the first since January.
CONSUMER SENTIMENT: A TRULY POSITIVE 12 MONTHS
The Conference Board’s October consumer confidence index vaulted over analyst predictions with a 94.5 reading. A year ago, it was at 71.2. Rising 2.3 points during the month, the University of Michigan’s consumer sentiment index came in at a final October mark of 86.9 (compare that with 73.2 in October 2013).
BETTER NEWS FOR PENDING HOME SALES
They were up 0.3% in September, according to the National Association of Realtors. After a 1.0% dip for August, that headline was welcome. August’s S&P/Case-Shiller Home Price Index showed a 5.6% yearly overall gain in home values.
RALLY CONTINUES, WITH HELP FROM JAPAN
As the Federal Reserve ended QE3, the Bank of Japan ramped up its easing efforts in a surprise announcement. This made the week even sweeter for investors, with the major indices logging the following 5-day gains: Dow, 3.48% to 17,390.52; S&P 500, 2.72% to 2,018.05; Nasdaq, 3.28% to 4,630.74. October 27-31 represented the Dow’s best week in two years.
THIS WEEK: ISM releases its October manufacturing PMI Monday; factory PMIs for China and the euro area also arrive, plus earnings news from Marathon Oil, Sprint, Alleghany, Nautilus, Herbalife and Loews. On Tuesday, September factory orders data complements earnings from Alibaba, Michael Kors, International Paper, Archer-Daniels-Midland, Motorola Solutions, Office Depot, Time, 21st Century Fox, WestJet and Valero Energy. Wednesday offers ISM’s service sector PMI, the latest ADP employment report and earnings from Tesla, Toyota, Sunoco, Tim Hortons, Zillow, News Corp., Chesapeake Energy and Whole Foods. Thursday, the October Challenger job-cuts report and the latest initial claims figures arrive, EU finance ministers meet and earnings emerge from Lions Gate Entertainment, Molson Coors, Orbitz, AOL, Wendy’s, Walt Disney and Zynga. The Labor Department issues its October jobs report Friday; in addition, Fed chair Janet Yellen speaks on monetary policy in Paris, and Scripps Co. and Humana present Q3 results.