Succinct Summations week ending November 15, 2013.

Positives:

1. S&P 500 and Dow Jones Industrial Average both closed at all-time highs, advancing for the sixth straight week.
2. FOMC Chair nominee Janet Yellen gives traders what they want in her testimony: More accommodative Fed policy to come
3. Gas prices are down more than 10% since the start of September.
4. U.S. third-quarter productivity advanced 1.9%.
5. 10 yr yield though remains sticky at 2.70%+
6. Japan has had 4 consecutive quarters of growth, its best run in three years.
7. EU’s economy grew for 2nd straight Q by modest 0.1% after 0.3% in Q2. Note this follows  6 consecutive of contraction.
8. Bearish sentiment among newsletter writers hasn’t been this low since 1989 (I know, SELL!)
9. Credit growth slows in China in October from excessive levels. Total financing drops to 856b yuan from 1.4T in September.

Negatives:

1. Initial jobless claims came in at 339k v 330k expected (on the + side, they dropped for the 5th straight week).
2. Empire state manufacturing collapses to -2.2 v expectations of 5, lowest level in 6 months.
3. U.S. trade deficit widens 8% to $41.8b, the highest level in 4 months (is this even bad).
4. U.S. industrial production fell 0.1% in October after climbing 0.7% in September.
5. Productivity in Q3 was 1.9%, below the estimate of 2.2% and Q2 was revised lower to 1.8% from 2.3% and remains a drag on growth.
6. NFIB small business optimism index was not optimistic in October due to the government shut down and poor Obamacare launch. It fell to 91.6 from 93.9, the lowest since March.

 

Category: Markets

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4 Responses to “Succinct Summation of Week’s Events (11/15/13)”

  1. Concerned Neighbour says:

    So, at what point does Ms. Yellen consider this a bubble? Evidently not when the S&P rises 140 points in just over a month.

    How about if the S&P goes up every single day from here to the New Year? If the S&P hits 2,000 by Christmas? Something tells me we just may find out the answer to both of those hypotheticals. Because, ya’ know, fundamentals and all that.

    • Petey Wheatstraw says:

      It’s “frothy.”

    • RW says:

      To a central banker, at least one not distracted by fond memories of Ayn Rand, the stock markets really aren’t even a tertiary issue: Small compared to the bond markets, infinitesimal compared to the currency markets, and on the border of being utterly meaningless compared to national productivity (and labor share in same).

      Traders and equity investors disagree of course but since we don’t mean squat in the larger scheme of things it probably makes sense to fold that reality into our analysis. YMMD

  2. SecondLook says:

    The Federal Reserve, properly speaking, shouldn’t be concerned about the stock market.

    The whole “containing systemic risk that may arise in financial markets” applying to the equity market creates a morass that I don’t think anyone really wants to step into. .