Dow rose 37, advancers over decliners better than 2-1 & NAZ gained 17. The MLP index fell 1+ to the 283s & the REIT index added 1 to the 358s. Junk bond funds traded higher & Treasuries advanced. Oil went back over 17 & gold topped 1300 once again.
AMJ (Alerian MLP Index tracking fund)
US consumer sentiment unexpectedly surged to a 13-year high as Americans' perceptions of the economy & their own finances rebounded following several major hurricanes, a Univ of Mich survey showed. The sentiment index rose to 101.1 (est. 95), highest since 2004, from 95.1 in Sep. Current conditions gauge, which measures Americans' perceptions of their finances, jumped to 116.4, highest since 2000, from 111.7. The expectations measure increased to 91.3, highest since 2004, from 84.4. The jump in sentiment, which was greater than any analyst had projected, may reflect several trends: falling gasoline prices following a hurricane-related spike; repeated record highs for the stock market; a 16-year low in unemployment; & post-storm recovery efforts driving a rebound in economic growth. The advance in the main gauge spanned age & income subgroups as well as partisan views, according to the report. Almost 6 out of every 10 consumers thought the economy had recently improved in early Oct. Not all measures in the survey showed big gains: the share of consumers reporting improved finances held steady at about 50%, while the proportion expecting gains in their financial situation fell slightly to 40%. “While the early October surge indicates greater optimism about the future course of the economy, it also reflects an unmistakable sense among consumers that economic prospects are now about as good as could be expected,” Richard Curtin, director of the consumer survey, said. “Indeed, nothing in the latest survey indicates that consumers anticipate an economic downturn anytime soon -- which contrarians may consider a clear warning sign of trouble ahead.” 83% of respondents saw buying conditions for household durables as favorable, most in more than a decade; positive vehicle-buying attitudes at 75%, highest since 2004.
US inflation excluding food & fuel was below estimates for the 6th time in 7 months, even as a hurricane-driven spike in energy prices boosted the overall cost of living by the most since Jan, according to the Labor Dept. The consumer price index rose 0.5% M/M (est. 0.6% rise) after 0.4% advance the prior month; up 2.2% Y/Y (est. 2.3%). Excluding food & energy, core CPI rose 0.1% M/M (est. 0.2% rise), following 0.2% gain; up 1.7% Y/Y (est. 1.8%). Shelter index up 0.3% after 0.5% gain; prices fall for new & used vehicles, household furnishings & operations. Wireless-phone service prices rose 0.4%, first gain after 14 straight declines. While economists expected an overall pickup in price gains in the aftermath of Hurricane Harvey, energy costs rose by the most since 2009, the details suggest any broader acceleration in inflation may need more time to gain traction. Shelter, which accounts for about 1/3 of CPI, gave less of a boost to inflation than in Aug, when the index was affected by outsize swings in hotel rates. Auto prices also dragged down inflation. The latest data could give some Federal Reserve policy makers pause as officials debate whether to raise interest rates one more time this year, an outcome investors have seen as likely after the Fed generally judged the inflation slowdown this year to be temporary. A separate Commerce Dept consumer-inflation measure, preferred by the Fed, is running below the central bank’s 2% target, with a 1.4% gain in the 12 months thru Aug.
Wells Fargo (WFC) reported an 18% decline in Q3 profits, caused by a significant increase in the its legal expenses. The bank earned $4.6B in Q3, 84¢ a share, down from $5.64B, $1.03 a share, in the same period a year earlier. Results missed the EPS forecast of $1.02. Expenses jumped in the quarter, mostly due to the money it had to set aside to cover legal settlements. The bank says the $1B for legal costs are for investigations into the mortgage practices before the financial crisis. Quarterly revenue was $21.9B, which also missed the forecast of $22.38B. The stock dropped 1.65. If you would like to learn more about WFC, click on this link.
club.ino.com/trend/analysis/stock/WFC?a_aid=CD3289&a_bid=6ae5b6f7
The popular stock averages are at record highs, hoping earnings season will deliver good reports. However early bank earnings disappointed. Consumer confidence data is very encouraging for holiday spending. But tax reform along with lower taxes will be needed to keep the rally in stocks in motion & tax reform is going over serious bumps. That brings more buying for gold, now over 1300.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CL=F | Crude Oil | 51.18 | +0.58 | +1.2% |
| GC=F | Gold | 1,301.30 | +4.80 | +0.4% |
US consumer sentiment unexpectedly surged to a 13-year high as Americans' perceptions of the economy & their own finances rebounded following several major hurricanes, a Univ of Mich survey showed. The sentiment index rose to 101.1 (est. 95), highest since 2004, from 95.1 in Sep. Current conditions gauge, which measures Americans' perceptions of their finances, jumped to 116.4, highest since 2000, from 111.7. The expectations measure increased to 91.3, highest since 2004, from 84.4. The jump in sentiment, which was greater than any analyst had projected, may reflect several trends: falling gasoline prices following a hurricane-related spike; repeated record highs for the stock market; a 16-year low in unemployment; & post-storm recovery efforts driving a rebound in economic growth. The advance in the main gauge spanned age & income subgroups as well as partisan views, according to the report. Almost 6 out of every 10 consumers thought the economy had recently improved in early Oct. Not all measures in the survey showed big gains: the share of consumers reporting improved finances held steady at about 50%, while the proportion expecting gains in their financial situation fell slightly to 40%. “While the early October surge indicates greater optimism about the future course of the economy, it also reflects an unmistakable sense among consumers that economic prospects are now about as good as could be expected,” Richard Curtin, director of the consumer survey, said. “Indeed, nothing in the latest survey indicates that consumers anticipate an economic downturn anytime soon -- which contrarians may consider a clear warning sign of trouble ahead.” 83% of respondents saw buying conditions for household durables as favorable, most in more than a decade; positive vehicle-buying attitudes at 75%, highest since 2004.
Consumer Sentiment in U.S. Unexpectedly Surges to 13-Year High
US inflation excluding food & fuel was below estimates for the 6th time in 7 months, even as a hurricane-driven spike in energy prices boosted the overall cost of living by the most since Jan, according to the Labor Dept. The consumer price index rose 0.5% M/M (est. 0.6% rise) after 0.4% advance the prior month; up 2.2% Y/Y (est. 2.3%). Excluding food & energy, core CPI rose 0.1% M/M (est. 0.2% rise), following 0.2% gain; up 1.7% Y/Y (est. 1.8%). Shelter index up 0.3% after 0.5% gain; prices fall for new & used vehicles, household furnishings & operations. Wireless-phone service prices rose 0.4%, first gain after 14 straight declines. While economists expected an overall pickup in price gains in the aftermath of Hurricane Harvey, energy costs rose by the most since 2009, the details suggest any broader acceleration in inflation may need more time to gain traction. Shelter, which accounts for about 1/3 of CPI, gave less of a boost to inflation than in Aug, when the index was affected by outsize swings in hotel rates. Auto prices also dragged down inflation. The latest data could give some Federal Reserve policy makers pause as officials debate whether to raise interest rates one more time this year, an outcome investors have seen as likely after the Fed generally judged the inflation slowdown this year to be temporary. A separate Commerce Dept consumer-inflation measure, preferred by the Fed, is running below the central bank’s 2% target, with a 1.4% gain in the 12 months thru Aug.
Wells Fargo (WFC) reported an 18% decline in Q3 profits, caused by a significant increase in the its legal expenses. The bank earned $4.6B in Q3, 84¢ a share, down from $5.64B, $1.03 a share, in the same period a year earlier. Results missed the EPS forecast of $1.02. Expenses jumped in the quarter, mostly due to the money it had to set aside to cover legal settlements. The bank says the $1B for legal costs are for investigations into the mortgage practices before the financial crisis. Quarterly revenue was $21.9B, which also missed the forecast of $22.38B. The stock dropped 1.65. If you would like to learn more about WFC, click on this link.
club.ino.com/trend/analysis/stock/WFC?a_aid=CD3289&a_bid=6ae5b6f7
Wells Fargo 3Q earnings disappoint due to legal costs; shares fall
The popular stock averages are at record highs, hoping earnings season will deliver good reports. However early bank earnings disappointed. Consumer confidence data is very encouraging for holiday spending. But tax reform along with lower taxes will be needed to keep the rally in stocks in motion & tax reform is going over serious bumps. That brings more buying for gold, now over 1300.
Dow Jones Industrials
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