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October retail sales were strong, jumping 0.8% on top of a 0.4% upward revision for the September numbers that brought it to 1.0% growth. Auto sales led with a 1.1% increase (after September’s 1.9% surge). Building materials and garden equipment were also up 1.1%, suggesting that residential investment is high. Non-store retailers also had a good couple of months, up 1.5% in October and 0.9% in September. This solid report will raise estimates for fourth-quarter GDP.
Like retail sales, October’s strong housing starts report will help lift estimates for the fourth-quarter GDP. Starts jumped 25.5% in the month, the highest monthly increase since 1982. This brings the annualized rate to 1.323M, the highest since August 2007. The main component, single family homes rose 10.8% (on top of September’s 8.4% gain), while multi-family homes more than recovered from their anomalous 39% drop in September with a 69% increase.
The consumer price index (CPI) rose 0.4% M/M in October, mainly due to a 3.5% spike in energy costs—the largest since February 2013—plus a 0.4% rise in housing costs. The core CPI (ex energy and food) came up only 0.1%, which actually brings the Y/Y rate for the core down a notch to 2.1%.
Upcoming Economic Reports:
Tuesday November 22 — Existing Home Sales
Wednesday November 23 — Durable Goods Orders
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