Bartlett Market Week
Market Week: November 9, 2009
The Markets
The equities markets largely reversed the decline of the last two weeks and the Dow clawed its way back over the 10,000 mark despite unemployment numbers that were worse than anticipated. The Nasdaq's year-to-date lead over the other major domestic indexes began to narrow a bit.
Note: Market indexes listed are unmanaged and are not available for direct investment.
Last Week's Headlines
- If you remember Lech Walensa winning the Nobel Peace Prize in 1983, you remember the last time the unemployment rate went over 10%--that is, before last month. The 10.2% unemployment rate, which represents 15.7 million people, was up by 0.4% from the previous month. Including people who are working part-time involuntarily, who have given up looking, or who are otherwise marginally attached to the work force would put the unemployment rate at 17.5%. However, September's 263,000 job-loss estimate was revised to 219,000.
- The Federal Reserve Board continued to foresee no change in interest rates for an "extended period." The Fed's statement indicated it's keeping an eye on employment, incomes, home prices, credit availability, utilization of manufacturing capacity, and inflation expectations to determine when it's safe to raise interest rates without jeopardizing a fragile economic recovery. In the meantime, it said, subdued inflation expectations permit the central bank to keep interest rates "exceptionally low."
- U.S. manufacturing remained in expansion mode in October for the third straight month. The Institute for Supply Management's index was at 55.7 (a number over 50 indicates growth). That's the best number in the last three years. September construction spending also rose; it was up 0.8% from the previous month.
- Pending sales of existing homes leaped 6.1% in September, according to the National Association of Realtors.
- Transportation was in the news as Berkshire Hathaway announced it will buy Burlington Northern Santa Fe (its largest acquisition ever) and Ford said it returned to being in the black during the third quarter.
- India's central bank agreed to buy half the 403 tons of gold to be sold by the International Monetary Fund, which helped goose the spot gold price to a record high before retreating a bit.
Eye on the Week Ahead
In a week that's light on economic data, the bond market could take center stage. A record $81 billion in new Treasury debt will be auctioned off and investors will be watching to see whether other buyers step up to take the place of the Fed, which recently ended its program of purchasing Treasuries.
Key data releases: Balance of trade (11/13).
Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results.
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