U.S. and World News
- With the preemptive resignation of House Speaker John Boehner paving the way for compromise, this week President Obama signed into law a bill that extends federal funding until December 11th. Had Congress not come to an agreement, the government would have shut down on October 1st. Both sides now have about 10 weeks to formulate a long-term budget, with the parties aiming to strike a two year deal.
- The Reserve bank of India surprised markets by reducing its policy interest rate by a greater than expected 0.5% to 6.75%. The central bank cited low inflation as the main reason for the cut. This is the fourth interest rate cut this year in India, following three previous 0.25% cuts.
- Equity markets increased slightly this week. The S&P 500 ended the week up 1.04%, closing at 1,951. Similarly, the Dow Jones increased 0.97% and closed at 16,472. Year to date, the S&P is down 5.22% and the Dow is down 7.58%.
- Yields in the Treasury markets fell this week. The 10 year Treasury bond now yields 1.99% while the 5 year Treasury bond now yields 1.29%.
- The spot price of WTI Crude Oil decreased slightly this week. Prices dropped by 0.11%, closing at $45.65 per barrel. In 2015, WTI Oil prices are down 22.35%.
- The spot price of Gold decreased this week, declining 0.72% and closing at $1,137.99 per ounce. Year to date, gold prices are down 3.92%.
- Initial jobless claims came in at 277,000 which was an increase from the prior week’s figure of 267,000. The Labor Department noted that there were no special factors that affected the claims figure. The four week moving average for claims now stands at 271,000.
- The Case-Shiller home price index unexpectedly declined in July, showing prices falling 0.2% vs. an expected gain of 0.1%. Prices fell in 11 of 20 cities covered by the index. Over the past 12 months, home prices have risen a solid 5.0%.
- Nonfarm payrolls were 142,000 for the month of September, much lower than the forecasted figure of 201,000. Nonfarm payrolls for July and August were also revised down by a combined 59,000. Unemployment was unchanged at 5.1% and average hourly earnings remained flat.
Fact of the Week
- This week in 1981, the U.S. government issued 20-year Treasury bonds at a 15.78% yield, an all-time record high interest rate for any U.S. government issue.
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