Strong Q3 GDP, Mixed Housing Indicators, Retreat for Equities


A 4.0% gain in consumer spending and a 3.3% advance in government spending helped strengthen the economy in the three months ending in September. Bureau of Economic Analysis data shows that the past two quarters represent the best 6-month period for U.S. growth since 2014. It appears likely that the economy will expand more than 3% this year; if that happens, 2018 will enter the history books as the best year for the economy since 2005.1


According to the Census Bureau, new home buying decreased 5.5% last month, even as the number of new homes on the market hit a nine-and-a-half-year high. The median sale price of $320,000 was 3.5% lower than it was in September 2017. Pending home sales surprised to the upside in September: they rose 0.5%. Economists polled by Briefing.com expected the National Association of Realtors to announce a housing contract activity decline of 0.3%.2,3


Friday, the final University of Michigan consumer sentiment index for October appeared, bearing a reading of 98.6. This was 0.4 points below its preliminary October mark, but little cause for concern.3


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Investors would love to see the major indices recapture some of their October losses, and perhaps that will happen as the month ends. The Dow Industrials, S&P 500, and Nasdaq Composite all retreated significantly last week after five days of sizable ups and downs, as anxieties about reduced profit margins and rising interest rates lingered. The blue chips gave back 2.97% to settle at 24,688.31 Friday. Losing 3.78% for the week, the Nasdaq fell to 7,167.21 at Friday’s closing bell; across the same stretch, the S&P 500 slipped 3.94% to 2,658.69.4


Monday, the Department of Commerce presents its snapshot of September personal spending, and the September PCE price index appears; investors will also consider earnings from Akamai, Blackbaud, Bloomin’ Brands, Booz Allen Hamilton, Embraer, Mondelez, Nautilus, Transocean, U.S. Auto Parts, and Wingstop. | Tuesday, Wall Street reviews earnings from Aetna, Allergan PLC, Amgen, Anadarko Petroleum, AutoNation, Baidu, Baker Hughes, Big 5 Sporting Goods, BP, Brinker International, Coca-Cola, Container Store, Cummins, Curtiss Wright, Denny’s, Eaton, eBay, Edison International, Electronic Arts, Extra Space Storage, Facebook, Fiat Chrysler, Fresh Del Monte Produce, GE, Genworth Financial, Herbalife, Honda Motor Co., Huntsman, Hyatt Hotels, Mastercard, MGM Resorts, Pfizer, Public Storage, Regis Corp., Sony, Under Armour, Voya Financial, Vulcan Materials, Waddell & Reed, WestJet, and Wyndham Hotels & Resorts; the latest Conference Board consumer confidence index and Case-Shiller home price index also arrive. | On Wednesday, the corporations announcing earnings include Air Canada, Allstate, AIG, Anthem, Chesapeake Energy, Clorox, Diebold Nixdorf, Estee Lauder, Express Scripts, Fitbit, Garmin, General Motors, GlaxoSmithKline, Kellogg, Molson Coors, Sprint, Taylor Morrison, Yum! Brands, and Zynga, and ADP releases its September payrolls report. | The October ISM manufacturing PMI comes out Thursday, along with the September Challenger job-cut report, the latest initial unemployment claims numbers, and earnings from AMC Networks, Apple, Arcelor Mittal, Avon, CBRE Group, CBS, Cigna, Cirrus Logic, DowDuPont, Exelon, Fluor, GoPro, Hanesbrands, Kraft Heinz, Live Nation, Marathon Petroleum, MetLife, Motorola Solutions, Pitney Bowes, RE/MAX Holdings, Royal Dutch Shell, Shake Shack, Spotify, Starbucks, Symantec, U.S. Steel, Wayfair, and WW. | Friday, the Department of Labor issues its October employment report, and Alibaba, Chevron, Duke Energy, Enbridge, Exxon Mobil, Seagate Technology, and Willis Towers Watson offer earnings news.

DJIA -0.13 5.50 11.71 20.20
NASDAQ 3.82 9.31 16.35 37.59
S&P 500 -0.56 3.84 10.22 21.32
10 YR TIPS 1.02 0.57 0.35 3.02

Sources: wsj.com, bigcharts.com, treasury.gov - 10/26/184,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.


1 - marketwatch.com/story/third-quarter-gdp-cools-a-bit-to-a-still-solid-35-rate-2018-10-26 [10/26/18]

2 - bloomberg.com/news/articles/2018-10-24/u-s-new-home-sales-fall-more-than-forecast-to-least-since-2016 [10/24/18]

3 - briefing.com/investor/calendars/economic/2018/10/22-26 [10/26/18]

4 - markets.wsj.com/us [10/26/18]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F26%2F17&x=0&y=0 [10/26/18]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F26%2F17&x=0&y=0 [10/26/18]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F26%2F17&x=0&y=0 [10/26/18]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F25%2F13&x=0&y=0 [10/26/18]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F25%2F13&x=0&y=0 [10/26/18]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F25%2F13&x=0&y=0 [10/26/18]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F27%2F08&x=0&y=0 [10/26/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F27%2F08&x=0&y=0 [10/26/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F27%2F08&x=0&y=0 [10/26/18]
6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/26/18]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/26/18]

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