U.S. and World News
- The Catalonia crisis intensified as the Catalan Parliament officially declared the region’s independence from Spain in a 70 to 10 vote on Friday, following weeks of demonstrations by its citizens. In response, Spanish Prime Minister Mariano Rajoy dismissed Catalonia’s president Carles Puigdemont and dissolved its Parliament hours after the independence vote. Rajoy called for new elections and fired the Catalan police chief as part of the series of measures aimed at seizing control of the revolting regime in Barcelona. Rajoy remarked, “In this moment, we need to be serene and careful, but we also need to have confidence that the state has the tools, backed by the law and reason, to peacefully and reasonably go back to legality and take away threats to democracy.”
- The European Central Bank held a widely anticipated meeting this week. While there was no change in interest rates made, there was an announcement that the ECB’s bond buying program would be reduced by half to €30 billion per month starting in January. The ECB’s quantitative-easing program was also extended through September 2018 as anticipated. ECB President Mario Draghi emphasized the commitment to an “open-ended program” that will “not stop suddenly.”
- Markets climbed higher this week with both the S&P 500 and Dow Jones Industrial Average setting new All-Time Highs on Friday. The S&P rose 0.23% and closed at 2,581. The Dow Jones rose 0.45% for the week and closed at 23,434. Year to date, the S&P is up 17.16% and the Dow is up 20.87%.
- Interest rates rose marginally this week. The 5 year and 10 year U.S. Treasury Notes are now yielding 2.03% and 2.41%, respectively.
- The spot price of WTI Crude Oil increased by 5.29% this week, closing at $54.16 per barrel. Year to date, Oil prices have risen 0.89%.
- The spot price of Gold ended the week lower by 0.56%, closing at $1,273.35 per ounce. Year to date, Gold prices are up 10.97%.
- Initial jobless claims increased by 10,000 from last week, coming in at 233,000 after reaching its lowest level since 1973 last week. The four week moving average for claims fell to 240,000.
- New home sales increased 18.9% in September to a seasonally adjusted annualized rate of 667,000 units which represents a new cycle high. A rebound in home sales in the hurricane-affected South region contributed over 75% of the overall increase.
- Real GDP increased by 3.0% in the 3rd quarter, above consensus expectations of 2.6%. The year over year rate of Real GDP growth now stands at 2.3%, the highest since 2015. The Bureau of Economic Analysis noted that the hurricanes that occurred during the quarter disrupted production activity and consumer spending but was unable to estimate the impact on growth.
Fact of the Week
- The United States has suffered 218 weather and climate disasters since 1980 in which the cost of damages exceeded an inflation-adjusted $1 billion, which is an average of 6 separate $1 billion+ disasters per year. (Source: National Centers for Environmental Information)
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