U.S. and World News
- Former British Prime Minister Tony Blair stated that there is a 50-50 chance of reaching another Brexit referendum as it is doubtful that Theresa May will secure a majority vote for a divorce deal with only six months until the deadline. Many issues remain unresolved before the deadline, including trade issues, security issues, regulatory uncertainty, and whether there will be a border separating Ireland. Japanese Prime Minister Shinzo Abe stated that Britain will be welcome to join the Trans-Pacific Partnership after it leaves the European Union, allowing it to retain its “global strength”.
- Rescuers have begun searching for survivors after Hurricane Michael flattened towns along the coast of the Florida panhandle. The hurricane made landfall early afternoon on Wednesday in Mexico Beach, Florida as a strong Category 4 storm with sustained winds of 155 miles per hour and knocked out power in about 1.5 million homes and businesses in the Southeast region. The storm is responsible for 12 deaths across Florida, Georgia, North Carolina, and Virginia and that number is expected to rise according to FEMA Administrator Brock Long. Offshore oil rigs in the Gulf were evacuated as the hurricane approached Florida, cutting oil production by over 40% and natural gas output by 33%.
- Stocks plunged this week following last week’s declines. The S&P 500 fell 4.06% and closed at 2,767. The Dow Jones declined by 4.17% and closed at 25,340. Year to date, the S&P is up 5.06% and the Dow Jones is up 4.27%.
- Yields pulled back this week after rising rapidly last week. The 5 year and 10 year U.S. Treasury Notes are yielding 3.02% and 3.17%, respectively.
- The spot price of WTI Crude Oil also fell dramatically, losing 3.81% this week to close at $71.51 per barrel. Year to date, Oil prices are up 18.97%.
- The spot price of Gold rose 1.20% this week, and closed at $1,218.04 per ounce. Year to date, Gold prices are down 6.51%.
- Initial jobless claims increased by 7,000 to 214,000 this week. The four-week moving average of claims increased by 3,000 to 210,000. Claims rose by 7,000 in Kentucky, and by 4,000 in North Carolina.
- The consumer price index (CPI) rose by 0.06% in September versus expectations for a 0.2% increase. The weaker figure was driven by lower energy prices. The year-over-year rate came in at 2.27% versus 2.4% expected.
- Core CPI rose by 0.12% in September versus expectations of a 0.2% increase. The year-over-year rate in Core CPI remains at 2.2%.
- The producer price index (PPI) increased by 0.2% in September, in-line with expectations.
- PPI ex-food and energy rose by 0.2% in September, in-line with expectations.
- Import prices rose by 0.5% in September month-over-month versus expectations for a 0.2% increase. The higher than expected reading was led by the foods, feeds, and beverages category.
- The University of Michigan’s index of consumer sentiment declined 1.1 points to 99.0 in the October preliminary reading against expectations for a reading of 100.5.
Fact of the Week
- A greater percentage of Millennials have all of their pre-tax retirement money invested in cash and bonds (20%) than those that have all of their pre-tax retirement money invested in stocks (19%). 2,593 Millennials (ages 20-36 in 2017) were surveyed in the 4th quarter 2017 (source: Transamerica Retirement Survey).
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