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Weekly Economic Update

Posted: October 29, 2018

First Estimate of Q3 GDP: 3.5%

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

New Home Sales Slump, But Pending Home Sales Improve

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 expected the National Association of Realtors to announce a housing contract activity decline of 0.3%.2,3

A Slight Dip for Consumer Sentiment

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

More Turbulence on Wall Street

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

Tip of the Week

If you have adult children living with you, it is perfectly fine to ask them to shoulder some financial responsibility in your household. Ask them to regularly pay one expense a month (such as the electric bill) or have them pay rent.

This Week

Monday’s earnings calendar lists announcements from Halliburton, Hasbro, Kimberly-Clark, Lennox International, Sify, TD Ameritrade, and Zions Bancorp. | On Tuesday, earnings roll in from 3M, Ameriprise Financial, Avery Dennison, Biogen, Capital One, Caterpillar, Corning, Fifth Third, GATX, Harley-Davidson, JetBlue, Lockheed Martin, McDonald’s, NextEra Energy, Pulte Group, Quest Diagnostics, Regions Financial, Six Flags Entertainment, Texas Instruments, and Verizon. | Wall Street considers September new home sales data and a new Beige Book from the Federal Reserve on Wednesday, along with earnings from Aflac, AT&T, Boeing, CoreLogic, Ford Motor Co., Freeport-McMoRan, General Dynamics, Hilton Worldwide Holdings, Ingersoll Rand, Microsoft, Norfolk Southern, Northrop Grumman, O’Reilly Auto Parts, Raymond James, Sirius XM Holdings, Smith Micro, Visa, Whirlpool, and W.R. Grace. | Thursday, investors react to earnings from Alaska Air Group, Ally Financial, Alphabet, Altria Group, Amazon, American Airlines, Anheuser-Busch, Briggs & Stratton, Bristol-Myers, Celgene, Chipotle, Comcast, Conoco-Phillips, Discover, Dunkin’ Brands, Expedia, First Solar, Gilead Sciences, GrubHub, Hershey Co., IMAX, Intel, International Paper, Mattel, Merck, Netgear, Nokia, Penske Auto Group, Raytheon, Sherwin-Williams, Snap, Southwest Airlines, Stanley Black & Decker, Stryker, T. Rowe Price, The Hartford, Twitter, Union Pacific, Valero Energy, Verisign, Waste Management, and Western Digital, plus new initial jobless claims numbers, September pending home sales, and a new report on durable goods orders. | The federal government’s first estimate of Q3 GDP arrives Friday along with the final September University of Michigan consumer sentiment index and earnings announcements from AON, Charter Communications, Colgate-Palmolive, Goodyear, Phillips 66, Ryder Systems, and Weyerhaeuser. 

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1 - [10/26/18]
2 - [10/24/18]
3 - [10/26/18]
4 - [10/26/18]

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