The market is moving on better than expected earnings in the financial and healthcare sectors? Imagine that! Wasn’t it just last week a pall hung over the earnings season? Then again, maybe the market is seeing a bit more than just earnings …
- World shares and the euro hit their highest marks in over a week on Tuesday, buoyed by returning confidence in Germany’s economy. The closely watched monthly survey from the ZEW institute showed a better than expected improvement in German investor confidence.
- Chinese exports rose almost 10 percent year-over-year to 186.35 billion U.S. dollars in September on improved overseas demand, while imports recovered slightly, widening the country’s trade surplus to $26.67 billion.
- Industrial output rose by more than expected in September, posting a sharp rebound from a downwardly revised drop the previous month.
- U.S. vehicle sales rose last month to a seasonally adjusted annualized rate of 14.9 million, the highest since March 2008.
- Household debt as a share of disposable income sank to 113 percent in the second quarter from a record high of 134 percent in 2007 before the recession hit. Debt payments on that basis are the smallest in almost 18 years, while the delinquency rate for credit cards is the lowest since the end of 2008.
- Foreclosure filings fell 16 percent in September from a year earlier to their lowest level since July 2007.
Now, on to an interesting comment from a reader …
I too am glad that the economy is improving, but there is a problem with the data, the way I see it, at least. Since the absolute data is in $$$, the rise could largely be due to increasing prices rather than sales volume, so it might not be an accurate indicator to gauge the economic activities, but it is good enough … my two cents 🙂
Yes, according to the CPI numbers this morning, gasoline and food prices are up 0.5 percent and that after a 0.6 climb in August. Core inflation (minus food and energy) rose only 0.1 percent, though. Given that most of the CPI increase came from gasoline prices (up 7.0%) and overall energy prices (up 4.5%), one could assume the rise in other retail sales (discretionary) came from goods that either dropped in price or remained steady in price. For example, the price of cars, one of the big-ticket items selling these days, actually dropped while the numbers of units sold increased (see above list).
- The price for new vehicles in September fell 0.1% and used car and truck prices dropped 1.4% last month, the largest decline since February 2009.
To your point, real average weekly earnings were unchanged in September from the prior month, according to the Labor report just released. This suggests the consumer is cash strapped, which could support your point, if not for the data above and the fact that inventory restocking has begun, which means more than just $$$ are moving. Actual product is going out the door. Apparently, consumers are willing to step up and buy cars, houses, and refrigerators, despite the bad news floating everywhere. This suggests confidence to me. By the way, I appreciate and thank you for your two hard-earned cents.
Whatever you feel about the imminent fiscal doom of America, the election or re-lection of an American president, or the potential of hyper-inflation from Federal reserve policies, forget about it for a bit and make your money work in a market that wants to go up, in a market that seems to be getting more in tune all the time. Don’t fight the tape. Let go of your fears. Be nimble, be quick, and, if you can, jump over the candlestick (that tiny flame of doubt).
Trade in the day; Invest in your life …
