Markets
For the week of Monday, October 7, 2013 through Friday, October 11, 2013:
- Standard & Poor’s 500 Index: 0.81%
- Dow Jones Industrial Average: 1.13%
- NASDAQ Composite: -0.41%
With no end in sight to the federal government shutdown, stock markets slid Monday, as investors sought out the safer havens of gold and some government bonds. The uncertainty sent stocks to their 10th decline in the past 13 sessions. The turmoil continued on Tuesday when investors sent markets to their lowest levels in more than a month. The possibility the federal debt ceiling will be breached and the Treasury will default on its debt concerned investors, even though most investors consider the risk of a default remote. On Wednesday, stocks advanced slightly. The market pop extended through Thursday when stocks rose sharply, boosted by signs that President Obama was considering proposals from both House and Senate Republicans to end the standoff. The rally continued again on Friday buoyed by hopes lawmakers would soon end the partial government shutdown and avoid a U.S. default. The University of Michigan’s consumer sentiment index fell to 75.2 in October from 77.5 in September, showing consumers’ concerns regarding the government shutdown.
- Releases not available as a result of government shutdown:
- Jobs Report
- International Trade
- Wholesale Trade
- Chain Store Sales Snapshot:
- The chain store sales index fell 0.1%.
- Year-over-year growth slowed to 1.8%.
- MBA Mortgage Applications Survey:
- Refinance activity helped increase overall mortgage applications.
- The composite index increased 1.3%.
- The purchase index fell 0.7%
- The refinance index increased 2.5%.
- Mortgage interest rates declined for both 15 and 30 year mortgages.
- Refinance activity helped increase overall mortgage applications.
- Federal Open Market Committee Minutes:
- The September meeting minutes indicated the decision to delay tapering was a close call.
- After much speculation over the taper, these minutes point to communication from the FOMC facing some challenges.
- Those in favor of cutting back the Fed’s monthly asset purchases believed the economy had met the criteria outlined for tapering.
- Those in favor of maintaining the status quo were concerned about signs of weakness in the labor market.
- The current government shutdown will likely push any taper into 2014.
- Jobless Claims:
- Initial claims for unemployment insurance claims rose 66,000 to 374,000.
- The four-week moving average rose 20,000 to 325,000.
- Continuing claims fell 16,000 to 2.91 million the week before the government shutdown began.
Earnings:
- Alcoa Inc. (NYSE: AA)
- Net income was $24 million, or $0.02 a share, compared to a loss of $143 million, or $0.13, year-over-year.
- Sales fell to $5.77 billion from $5.83 billion.
- Excluding restructuring charges, earnings rose to $120 million, or $0.11 a share, compared to $32 million, or $0.03 last year.
- Analysts expected $0.05 a share.
- Yum! Brands, Inc. (NYSE: YUM)
- Yum Brands, owner of KFC, Pizza Hut, and Taco Bell reported profit fell 68%, as its China unit struggles to recover from a bird flu scare and controversy over its chicken supply.
- China same-restaurant sales fell 11% in the quarter.
- Yum’s net income $0.33 a share $152 million, compared to $471 million, or $1.02 a share, last year.
- Analysts expected $0.93 a share.
- Sales fell to $3.02 billion, missing analysts’ expectations of $3.54 billion.
- Yum Brands, owner of KFC, Pizza Hut, and Taco Bell reported profit fell 68%, as its China unit struggles to recover from a bird flu scare and controversy over its chicken supply.
- Costco Wholesale Corporation (NASDAQ: COST)
- Costco earned $617 million, or $1.40 a share, compared to $609 million, or $1.39 a share, a year ago.
- Costs increased 0.8% to $31.5 billion.
- Revenue rose 0.8% to $32.49 billion.
- Same-store sales increased 5%.
- Analysts expected $1.46 a share, on sales of $32.82 billion.
- Costco earned $617 million, or $1.40 a share, compared to $609 million, or $1.39 a share, a year ago.
- Rates rose as the budget standoff continued for a second week.
- The two-year Treasury rate rose three basis points to 0.36%.
- The five-year Treasury rate increased five basis points to 1.46%.
- The 10-year Treasury rate increased six basis points to 2.71%.
- The 30-year Treasury yield rose six basis points to 3.78%.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
