Succinct summation of week’s events:

Positives:

1) Avg gallon of gasoline falls .10 on the week to $3.58 per, lowest since Aug.
2) Final Oct UoM confidence a touch less than est but at 82.6, highest since Sept ’07.
3) Q3 GDP grows 2% vs est of 1.8%, helped out by .6% contribution from defense spending. Consumption up by 2%.
4) Sept New Home sales at 389k is most since tax credit month of Apr ’10, months supply falls to 4.5, lowest since Oct ’05.
5) FOMC does nothing as they should but as expected this time. Dec meeting likely a different story though
6) German consumer confidence rises to highest level since Oct ’07.
7) Q3 UK GDP grows 1% q/o/q, above est of up .6% and officially out of recession thanks to the Olympics.
8) Both exports and imports in Hong Kong rise more than est in Sept.
9) Philippines follows South Korea and Thailand in cutting rates in part due to weakening their currencies as they fight the Fed’s debasement of the US$.

Negatives:

1) Revenue season continues to disappoint.
2) Pending home sales in Sept up just .3% vs est of up 2.5%.
3) Refi and purchase apps give back entire Fed induced gain with refi’s down 12.9% and purchases lower by 8.3%.
4) Avg 30 yr mortgage rate up to 3.5%, highest since Sept 20, just 7 bps below the day before QEtres.
5) Richmond and KC mfr’g survey’s fall below zero again.
6) Q3 GDP weighed down by inflation as price deflator up 2.8%, 2nd most since ’08.
7) Spanish Q3 unemployment rate rises to 25% from 24.6%.
8) German IFO falls to lowest since Feb ’10.
9) Euro zone mfr’g and services composite index drops to weakest since June ’09.
10) French consumer confidence down 1 pt to 8 month low.
11) UK mfr’g index falls to -23 from -8, lowest June ’10.
12) Japanese exports in Sept fall 10.3% y/o/y. Exports to China down by 14.1%, to Europe down by 21.1%.

Category: Markets

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4 Responses to “Succinct Summation of Week’s Events (10/26/12)”

  1. VennData says:

    Positive

    “…Early voters could account for up to 40 percent of all voters in the 2012 presidential election, and polls of people who already have cast ballots show President Barack Obama with a comfortable lead over Republican challenger Mitt Romney…”

    http://www.reuters.com/article/2012/10/26/us-usa-campaign-voting-idUSBRE89P15920121026

  2. With this week’s economic data releases, TRI gauged the economy troughed @ 0.2% in late August and had rebounded to a 0.6% pace in Sept (Q3). Oct is running at a 1.1% pace. So I’m anticipating major downward revisions of today’s BEA announced 2% guestimate.

    The current trend of revenue misses and slashed guidance will shortly turn to more positive outlooks for Q4. TRI’s measure of animal-spirits-plus fails to sense a so-called fiscal cliff calamity. Since June the model has been projecting 2013Q2 would be one of the most robust quarters of the current business cycle … seemingly anticipating a Romney victory. On that note, my last Race-for-the-White-House model update projects an ECV 269-269 tie which in the reality of a Republican House of Representatives majority would give Romney the win.

    To cement his loss perhaps, Obama has just warned he will veto the draft legislation proposed for the Nov13 – Dec14 lame-duck session by the Senate’s gang-of-8 to address fiscal cliff and Debt Limit issues. My Debt Wall model continues to project the date Congress will be handcuffed by its $16.4 trillion Debt Limit is Jan 7 2013. If Romney wins, November will see a new S&P500 record.

    General job creation is finally exceeding the 99k required to offset the monthly rise of the labour force via graduation and immigration, but the glide path toward 6.9% UR sucks. This is the threshold where FOMC will commence to normalize its discount rates, but it could be as far away as 2018Q1.

    Debt Wall & TRI charts: http://trendlines.ca/free/economics

  3. louis says:

    BR what’s with the big red X ads taking over the Internet.

  4. denim says:

    2) Pending home sales in Sept up just .3% vs est of up 2.5%.
    3) Refi and purchase apps give back entire Fed induced gain with refi’s down 12.9% and purchases lower by 8.3%.
    4) Avg 30 yr mortgage rate up to 3.5%, highest since Sept 20, just 7 bps below the day before QEtres.

    Same old same old. The Randian-lite version of Ayn Rand devotees, aka “free marketeer” are still hoping the “free market” tools will magically restore the housing market. It is fear keeping it down. Fear of losing one’s job and fear of buying something hugely expensive that will depreciate in value by the “new normal” game rules. The insurance industry is missing a golden opportunity by not offering a house depreciation insurance policy to home buyers and owners. In theory, it is little different than a CDS derivative. Once confidence is restored in the market that houses will appreciate in value, the risk of the policy issuer becomes almost nil. Who wants to be the next new Warren Buffett insurance success?