WEDNESDAY, OCTOBER 17, 2018
Market Recap
Wall Street surged more than two percent, supported by strong corporate results and economic data, while the dollar and Treasury yields were little changed. Oil prices rose on expectations of disruption in supply due to U.S. sanctions on Iran and tensions with Saudi Arabia. Gold prices held steady.
Coming Up in U.S.
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Commerce Department is likely to report U.S. homebuilding fell in September to 1.220 million houses, compared with August’s reading of 1.282 million. Building permits for September is forecast edging up to 1.278 million units from 1.249 units in August.
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Federal Open Market Committee issues minutes of its Sept. 25-26 meeting. Separately, Federal Reserve Board Governor Lael Brainard speaks on “Fintech and Financial Inclusion” before the “Fintech, Financial Inclusion - and the Potential to Transform Financial Services” conference sponsored by the Federal Reserve Bank of Boston and the Aspen Institute in Boston.
Coming Up in Canada
- Canada becomes the first industrialized nation to legalize recreational cannabis but a legal buzz will be hard to find in its biggest cities as some, including Toronto and Vancouver, will have no stores open. Residents in Newfoundland and Labrador, Canada’s easternmost province, will be the first to toke legally, and have 22 outlets to buy pot.
- Data from Statistics Canada will likely show factory sales dipped 0.6 percent in August. Sales grew 0.9 percent in July.
Market News
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U.S. industrial output rises; job openings at record high
U.S. industrial production increased for a fourth straight month in September, boosted by gains in manufacturing and mining output, but momentum slowed sharply in the third quarter.
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OPEC urges producers to ramp up investment amid shrinking spare oil capacity
OPEC Secretary-General Mohammad Barkindo urged oil producing companies to increase capacities and invest more to meet future demand as spare oil capacity shrinks worldwide.
Chart of the Day
THURSDAY, OCTOBER 18, 2018
Market Recap
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Wall Street’s major indexes were down in choppy trading, after FOMC minutes from its September meet showed broad agreement on raising interest rates further.
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Treasury yields and the dollar rose, while gold prices edged lower.
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Oil fell sharply on increased U.S. stockpiles.
Market News
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Despite Trump criticism, Fed policymakers see need for more rate hikes
Despite sharp criticism from U.S. President Donald Trump for raising interest rates, Federal Reserve policymakers remain generally united on the need to raise borrowing costs further, according to minutes from their most recent policy meeting.
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Hurricane Florence, rising mortgage rates hurt U.S. homebuilding
U.S. homebuilding dropped more than expected in September as construction activity in the South fell by the most in nearly three years, likely held down by Hurricane Florence.
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Don’t mention the oil price: US legal threat prompts change at OPEC
OPEC has urged its members not to mention oil prices when discussing policy in a break from the past, as the oil producing group seeks to avoid the risk of U.S. legal action for manipulating the market, sources close to OPEC said.
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Canada’s economy hitches a ride with U.S. expansion
Canada’s economy will continue to grow faster than its potential over the coming quarters as U.S. fiscal stimulus boosts demand for its exports, setting the stage for more Bank of Canada interest rate hikes, a Reuters poll of economists showed.
Chart of the Day
MONDAY, OCTOBER 22, 2018
Market Recap
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Wall Street ended mixed, giving up initial gains, as strong earnings were offset by concerns about rising U.S. interest rates and geopolitical tensions. Treasury yields rose on hopes of reduced tension between Italy and European Commission over the country’s debt-laden budget. Reports that UK PM Theresa May is ready to drop a key Brexit demand pushed euro and sterling up against the dollar, while gold prices firmed. Oil prices were up on signs of surging demand in China.
Coming Up in U.S
- Markets will work through another spate of economic figures that include gross domestic product on Friday, durable goods, weekly jobless claims and pending home sales on Thursday; and Markit manufacturing PMI and new home sales on Wednesday. U.S. economic growth is expected to have expanded at a 3.3 percent annualized rate in third quarter, slower than its second-quarter reading of 4.2 percent.
- Overall orders for durable goods, items ranging from toasters to aircraft that are meant to last three years or more, is forecast to have dropped 0.9 percent in September, from a 4.2 percent surge in the month before.
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Initial claims for state unemployment benefits are likely to have increased 3,000 to a seasonally adjusted 213,000 for the week ended October 20.
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Pending home sales likely remained unchanged in September, compared to a decline of 1.8 percent in August.
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New home sales are expected to have marginally dropped to a seasonally adjusted annual rate of 625,000 units in September from 629,000 units in the month before. Markit U.S. manufacturing sector PMI is forecast to come in at 55.4 in October.
Chart of the Day
U.S. existing home sales fall for sixth straight month
U.S. home sales fell in September by the most in over two years as the housing market continued to struggle despite strength across the broader economy.
