C.W. Copeland & Associates presents
Weekly Economic Update for the Week of November 2, 2009
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Quote of the week."We do not quit playing because we grow old, we grow old because we quit playing."- Oliver Wendell Holmes
3Q GDP: +3.5%.The longest economic contraction in America since 1947 ended in the third quarter as federal credits and stimuli encouraged robust growth. (Automobile output represented 1.6% of that growth, according to the Commerce Department.) This was the best quarterly GDP since 3Q 2007.1
Consumer spending dips 0.6%. September's slip appears partly a result of the end of the C.A.R.S. program. "Real" disposable income (after-tax income) fell 0.1% in September. However, durable goods orders rose 1.0% in that month.2,3
Slight rise in consumer sentiment.Last week, the Reuters/University of Michigan index improved from 69.4 to 70.6 for October. Yet that still meant a drop from the 73.5 reading for September.4
New home sales down 3.6%.Why the drop? Here's a hint: most sales contracts signed in September will likely close after the end of November (and the expiration of the federal $8,000 first-time buyer credit). A Congressional vote to extend that credit could occur early this week.5,6
Strong month for some hard assets.Despite losses last week, gold prices rose 3.14% in October - an ounce went for $1,039.70 at Friday's NYMEX close. Copper gained 4.93% last month (it hasn't had a down month in 2009). Oil prices ended October at precisely $77.00 a barrel - up 9.05% for the month.7
Week ends with profit-taking.Concerns over personal spending, commercial real estate and a spike in the dollar index weighed heavily on stocks at October's end. While the S&P 500 and NASDAQ had their toughest months since February, the DJIA managed a flat month (+0.005%, to be precise).8
% Change | Y-T-D | 1-Yr Chg | 5-Yr Avg | 10-Yr Avg |
DJIA | +10.67 | +5.80 | -0.63 | -0.95 |
NASDAQ | +29.68 | +20.41 | +0.71 | -3.11 |
S&P 500 | +14.72 | +8.61 | -1.66 | -2.40 |
Real Yield | 10/30 | 1 Yr Ago | 5 Yrs Ago | 10 Yrs Ago |
10YrTIPS | 1.41% | 3.06% | 1.63% | 4.14% |
(Source: CNNMoney.com, ustreas.gov, bls.gov, 10/30/09)9,10,11
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
Riddle of the week.What is the only planet within our solar system that rotates clockwise?
Contact my office or see next week's Update for the answer.
Last week's riddle: The names of two U.S. state capital cities rhyme but share no vowels. Name the two cities.
Last week's riddle answer:Austin and Boston.
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