Top Stories Last Week
• US Stocks Rose Again
US stocks rose again in a quiet week without much important economic news. S&P index rose 0.4%, and MSCI EAFE index was flat. The MSCI Emerging Market Index dropped by 0.6%. Gold tumbled 3.6%, while the SPGC commodity index went up by 1.2%. The bond markets sold off slightly. Barclays US Treasury index declined by 0.2%, while US high yield bonds remained unchanged..
• US Inflation Rate Rose 1.0% on a Yearly Basis
The Department of Labor has reported that US consumer prices rose 1.0% on a yearly basis during October, in line with expectation though lower than September’s 1.2% gain. On a monthly basis, prices contracted 0.1% vs. 0.0% expected. Core CPI, excluding food and energy costs, rose 1.7% over the last twelve months and 0.1% month over month. Given the moderate inflation rate, there is no rush for the Fed to taper the bond purchase program.
• US Retail Sales Rose 0.5% in October
US retail sales rose more than expected in October as household continued spending, suggesting upward trend in the economy early in the fourth quarter. Retail sales excluding automobiles, gasoline and building materials increased 0.5% last month after advancing 0.3% in September. Overall retail sales rose 0.4% after being flat in September. The report was the latest sign that a 16-day government shutdown had a limited impact on the economy and should ease concerns about the holiday shopping season.
• Bank of Japan Kept Monetary Policy Unchanged
The Bank of Japan kept its policy rates and asset-purchasing program unchanged, as widely expected. The central bank also made no changes to its assessment of the economy, which it said “has been recovering moderately” as “exports have generally been picking up.” It also cited gains for businesses’ fixed investment and corporate profits. The bank will continue its bond purchases aimed at pumping some 60 trillion yen to 70 trillion yen ($600 billion to $700 billion) a year into the economy. The statement said the monetary easing would continue “as long as it is necessary.”
Top Stories to Watch This Week
• US Durable Goods Orders
US durable goods order excluding transportation is expected to rise 0.2% in October.
• European Inflation
European CPI inflation is likely to remain at 0.8% in November on a YOY basis.
• US Consumer Confidence
US consumer confidence index is expected to rise to 72.5 in November.