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Economic Update 11/18/13


While conceding that the Federal Reserve’s current stimulus effort “will not continue indefinitely,” Federal Reserve chair nominee Janet Yellen sounded decidedly dovish at her confirmation hearing in the Senate last week. “Supporting the recovery today is the surest path to returning to a more normal approach to monetary policy,” she noted, which global markets took as a signal that tapering was not in the immediate future. The S&P 500 hit a new record close after her comments Thursday; gold and silver futures and the MSCI Emerging Markets Index all rose 1.4% on the day.


While demand was reasonably high at the new online health insurance exchanges in October (975,000+ people found that they were eligible for coverage), total enrollment for the month was just 106,000. As tweaks continued to be made to, President Obama announced that insurers don’t yet have to cancel plans that fail to meet Affordable Care Act standards. Friday, the House passed a GOP bill that would let insurers offer such policies to new customers as well as existing ones in 2014; President Obama has indicated he will veto this bill.


As of Friday, 461 firms in the S&P 500 had reported earnings – and according to Bloomberg, 75% of them had beaten profit forecasts. Bloomberg projects S&P 500 earnings up 4.9% for Q3 and 5.8% for Q4.

DOW…16,000? S&P…1,800? NASDAQ…4,000?

Soon, the major U.S. indices could top those psychologically important levels. Friday saw another record close for the S&P 500: 1,798.18. The Dow settled Friday at 15,961.70 (also a new record close), the NASDAQ at 3,985.97. Weekly performances were as follows: S&P, +1.56%; DJIA, +1.27%; NASDAQ, +1.70%.

THIS WEEK: Monday brings earnings from Salesforce, Tyson Foods and Urban Outfitters and the November NAHB Housing Market Index. Tuesday offers earnings from Campbell Soup Co., TJX, Best Buy, Home Depot and Medtronic. Wednesday, NAR publishes October existing home sales numbers, and the federal government issues the October CPI, the October FOMC minutes and the report on October retail sales; ADT, Lowe’s, JCPenney, J.M. Smucker, Deere and Staples announce earnings. Thursday, October’s PPI and new initial claims figures complement earnings from Abercrombie & Fitch, Target, Gap, Gamestop, Ross, Intuit and Dollar Tree. Friday, PetSmart announces Q3 results.

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About the Independent Financial Advisor

Robert Pagliarini, PhD, CFP®, EA has helped clients across the United States manage, grow, and preserve their wealth for the past 25 years. His goal is to provide comprehensive financial, investment, and tax advice in a way that was honest and ethical. In addition, he is a CFP® Board Ambassador, one of only 50 in the country, and a real fiduciary. In his spare time, he writes personal finance books, finance articles for Forbes and develops email and video financial courses to help educate others. With decades of experience as a financial advisor, the media often calls on him for his expertise. Contact Robert today to learn more about his financial planning services.

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