Dow dropped 47 after paring losses in early trading, advancers were over decliners 3-2 & NAZ fell 13. The MLP index recovered another massive 16 to the 491s & the REIT index lost 1+ to the 299s Junk bond funds were mixed after recent selling & Treasuries plunged, taking the yield on the 10 year Treasury over 2.1%. Oil sunk to just over 80 (down 25 from its recent highs) & gold slid a little lower.
AMJ (Alerian MLP Index tracking fund)
Industrial production in the US rose in Sep by the most since Nov 2012, driven by a surge at utilities & a rebound in manufacturing. The 1% advance in output at factories, mines & utilities exceeded the highest forecast & followed a 0.2% drop the prior month, according to the Federal Reserve. Utility production was the strongest since May 2012, while factories made strides even as motor vehicle output fell for a 2nd month. Corp orders for equipment & sustained consumer spending on the heels of job gains, cheaper borrowing costs & lower gas prices kept factory floors busy last month. At the same time, a weakening in global markets could limit further progress in the pace of production. Manufacturing, which makes up 75% of total production, climbed 0.5% in Sep, erasing the previous month’s decline, topping the forecast for a 0.4% rise in total production. Capacity utilization, which measures the amount of a plant in use, rose to 79.3% in Sep from 78.7% the prior month. Utility output surged 3.9% after rising 1.2% in Jul. Mining production, which includes oil drilling, increased 1.8%, the most since Apr. Production of business equipment rose 0.3% after a 0.2% decline in Aug. Output of computers & electronic products increased 0.8% after a 1% gain. Factories also churned out more appliances & furniture in Sep. Output of cars, trucks & parts decreased 1.4% after a 7% slump. Auto assemblies eased to an 11.56M annualized rate, the slowest in 5 months, today’s report showed. Excluding vehicles & parts, factory production climbed 0.6%. Car & truck saloes, which have helped power production gains, cooled last month. Motor vehicles slowed in Sep to an annualized rate of 16.3M, the weakest since Apr, from 17.5M in Aug.
Industrial Output in U.S. Rises by Most Since November 2012
Applications for unemployment benefits in the US unexpectedly dropped last week to their lowest level in 14 years as employers avoided trimming staff even as global growth weakens. Jobless claims decreased 23K to 264K, the fewest since Apr 2000 & lower than all projections, according to the Labor Dept. Companies are beefing up staff as payrolls this year remain on track for their biggest gain since 1999. The risk remains that economic slowdowns in Europe & China, a plunge in commodity prices & geopolitical & health risks including the Ebola outbreak hurt confidence & curb further progress. The forecast projected the number of claims would increase to 290K. The 4 week average of claims, a less-volatile measure than the weekly figure, declined to 283K, the lowest since Jun 2000, from 287K in the prior week. The number continuing to receive jobless benefits rose 7K to 2.39M & the unemployment rate among people eligible for benefits held at 1.8%.
Jobless Claims in U.S. Unexpectedly Decrease to 14-Year Low
The Federal Reserve should consider delaying the end of its bond purchase program to halt the decline in inflation expectations, said St. Louis Federal Reserve Bank President James Bullard. Speaking in an interview today, Bullard said US economic fundamentals remain strong & he blamed the market turmoil on downgrades in the outlook for Europe. “Inflation expectations are declining in the U.S.,” he said. “That’s an important consideration for a central bank. And for that reason I think that a logical policy response at this juncture may be to delay the end of the QE.” Fed officials are scheduled to meet on Oct 28-29 & have said they expect to end asset purchases after that meeting.
Bullard Says Fed Should Consider Delay in Ending QE
Very helpful economic data did little for stocks but thoughts about extending QE brought back buyers. These are extremely volatile times & wild swings add to uncertainty in the markets that many investors are not used to. MLPs, a low beta sector, have been bouncing all over the place while REITs, another yield sector, have been fairly calm during these turbulent times. The Eubola mess is another major worry for markets. The threat is that it could cause a further slowdown in consumer spending which has been uneven all year.
AMJ (Alerian MLP Index tracking fund)
| CLX14.NYM | ...Crude Oil Nov 14 | ...80.57 |  ...1.21 | (1.5%) |
| GCV14.CMX | ...Gold Oct 14 | ......1,239.20 | ...4.90 | (0.4%) |
Industrial production in the US rose in Sep by the most since Nov 2012, driven by a surge at utilities & a rebound in manufacturing. The 1% advance in output at factories, mines & utilities exceeded the highest forecast & followed a 0.2% drop the prior month, according to the Federal Reserve. Utility production was the strongest since May 2012, while factories made strides even as motor vehicle output fell for a 2nd month. Corp orders for equipment & sustained consumer spending on the heels of job gains, cheaper borrowing costs & lower gas prices kept factory floors busy last month. At the same time, a weakening in global markets could limit further progress in the pace of production. Manufacturing, which makes up 75% of total production, climbed 0.5% in Sep, erasing the previous month’s decline, topping the forecast for a 0.4% rise in total production. Capacity utilization, which measures the amount of a plant in use, rose to 79.3% in Sep from 78.7% the prior month. Utility output surged 3.9% after rising 1.2% in Jul. Mining production, which includes oil drilling, increased 1.8%, the most since Apr. Production of business equipment rose 0.3% after a 0.2% decline in Aug. Output of computers & electronic products increased 0.8% after a 1% gain. Factories also churned out more appliances & furniture in Sep. Output of cars, trucks & parts decreased 1.4% after a 7% slump. Auto assemblies eased to an 11.56M annualized rate, the slowest in 5 months, today’s report showed. Excluding vehicles & parts, factory production climbed 0.6%. Car & truck saloes, which have helped power production gains, cooled last month. Motor vehicles slowed in Sep to an annualized rate of 16.3M, the weakest since Apr, from 17.5M in Aug.
Industrial Output in U.S. Rises by Most Since November 2012
Applications for unemployment benefits in the US unexpectedly dropped last week to their lowest level in 14 years as employers avoided trimming staff even as global growth weakens. Jobless claims decreased 23K to 264K, the fewest since Apr 2000 & lower than all projections, according to the Labor Dept. Companies are beefing up staff as payrolls this year remain on track for their biggest gain since 1999. The risk remains that economic slowdowns in Europe & China, a plunge in commodity prices & geopolitical & health risks including the Ebola outbreak hurt confidence & curb further progress. The forecast projected the number of claims would increase to 290K. The 4 week average of claims, a less-volatile measure than the weekly figure, declined to 283K, the lowest since Jun 2000, from 287K in the prior week. The number continuing to receive jobless benefits rose 7K to 2.39M & the unemployment rate among people eligible for benefits held at 1.8%.
Jobless Claims in U.S. Unexpectedly Decrease to 14-Year Low
The Federal Reserve should consider delaying the end of its bond purchase program to halt the decline in inflation expectations, said St. Louis Federal Reserve Bank President James Bullard. Speaking in an interview today, Bullard said US economic fundamentals remain strong & he blamed the market turmoil on downgrades in the outlook for Europe. “Inflation expectations are declining in the U.S.,” he said. “That’s an important consideration for a central bank. And for that reason I think that a logical policy response at this juncture may be to delay the end of the QE.” Fed officials are scheduled to meet on Oct 28-29 & have said they expect to end asset purchases after that meeting.
Bullard Says Fed Should Consider Delay in Ending QE
Very helpful economic data did little for stocks but thoughts about extending QE brought back buyers. These are extremely volatile times & wild swings add to uncertainty in the markets that many investors are not used to. MLPs, a low beta sector, have been bouncing all over the place while REITs, another yield sector, have been fairly calm during these turbulent times. The Eubola mess is another major worry for markets. The threat is that it could cause a further slowdown in consumer spending which has been uneven all year.
Dow Jones Industrials
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