Rover's Weekly Market Brief — 10/28/2016

October 28, 2016 |

Indices

DJIA: 18,161.20 (+0.09%)

NASDAQ: 5,190.10 (-1.28%)

S&P 500: 2,126.41 (-0.69%)

Commodities

Gold: 1,275.90 (+0.65%)

Copper: 219.65 (+5.17%)

Crude Oil: 48.76 (-4.11%)

Economy

After a weak first half of the year, the third quarter GDP came in strong, beating expectations with 2.9% annualized growth. Personal consumption, which rose 2.1% annualized, was the biggest contributor to the overall growth, adding 1.5 percentage points to the total. Exports were also a highlight, growing 10.0%, largely thanks to exports of food, especially soybeans. This added 0.8 percentage points to the quarter’s total growth and easily outweighed the 2.3% rise in imports. The third quarter started slowly but ended on a high note, suggesting there is momentum to be carried into the fourth quarter.

New home sales came up 3.1% in September to a 593,000 annualized rate. Despite sharp downward revisions to the July and August home sales numbers, the year is still looking strong, with Y/Y new home sales up 30% (compared with an almost flat resale market). Prices came up 6.7% in the month, bringing it to a 1.9% gain Y/Y. The median new home price is now $315,5000. Breaking it down by region, the South, Midwest, and Northeast all posted solid monthly gains, while the West saw a 4.7% decline. The two largest regions, the South and West, are both strongly up Y/Y.

In contrast to the strong GDP and new home sales reports, September durable goods orders were flat. Orders dropped 0.1% M/M, which was lower than expected, but does not look quite so bad in light of an upward revision to the August rate, which is now 0.3%. A very large monthly decline in defense aircraft is a special factor in this report, offsetting a rise in civilian aircraft and vehicle orders. Excluding transportation, durable goods orders were up 0.2% M/M.

Upcoming Economic Reports:

Mon October 31 — Personal Income and Outlays

Fri November 4 — Employment Situation

Earnings Calendar:

 

Monday Tuesday Wednesday Thursday Friday
NextEra Energy (NEE) Pfizer (PFE) Facebook (FB) Toyota Motor (TM) Berkshire Hathaway (BRK.B)
Dominion Resources (DCM) Gilead (GILD) Time Warner (TWX) Starbucks (SBUX) Regeneron Pharmaceuticals (REGN)




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