Week Ends Relatively Flat as Investors Look for Signs to Predict Fed Actions

Markets

For the week of Monday, November 4, 2013 through Friday, November 8, 2013:

• Standard & Poor’s 500 Index: 0.60%
• Dow Jones Industrial Average: 1.04%
• NASDAQ Composite: 0.01%

Stocks edged higher on Monday, as investors weighed lackluster factory-orders data against strong earnings results following the market’s recent gains. Stocks closed slightly lower on Tuesday, despite a stronger-than-expected reading on the U.S. services industry. Investors were likely looking ahead to key jobs data later in the week. Wednesday brought another record day for the Dow Jones Industrial Average, as investors maintained hope for a continued easy-money policy from the Federal Reserve. Stocks tumbled on Thursday, erasing the week’s gains. Data showed the economy expanded faster than estimated in the third quarter, while the European Central Bank cut a key interest rate. Friday’s jobs report well exceeded expectations, allowing the markets to close positive for the week.

Economic Data

• Factory Orders:
  • Manufactured goods orders increased 1.7% in September, erasing August’s 0.1% decrease.
    • Previous durable goods numbers were revised up from 3.7% to 3.8% increase.
    • Durable goods shipments were revised up from 0.2% to 0.4%.
  • Unfilled orders rose 0.9%, while inventories rose 0.4%.
  • Capital goods orders were revised down to a 1.3% decrease from the previous 1.1% decrease.
• Chain Store Sales:
  • Chain store sales fell 0.6%.
  • Year-over-year the index is 1.9% higher.
• Institute for Supply Management Services Index:
  • The ISM nonmanufacturing index increased to 55.4 in October, suggesting that services were relatively unaffected by the government shutdown.
    • The business activity index increased 4.6 points to 59.7.
    • Employment rose 3.5 points to 56.2.
    • New orders dropped 2.8 points to 56.8.
• MBA Mortgage Applications Survey:
  • The mortgage applications composite index fell 7%.
    • Purchase applications slid 5.2%.
    • Refinancing applications fell 7.9%.
• Jobless Claims:
  • Initial claims for unemployment insurance slid 9,000 to 336,000.
  • Continuing claims increased 4,000 to 2.87 million.
  • The four-week moving average dropped 8,500 to 2.87 million.
• Gross Domestic Product:
  • According to the Bureau of Economic Analysis’ first report, GDP grew by 2.8% in the third quarter.
    • Second quarter GDP grew 2.5%.
    • The growth was broad-based with investment, trade and government contributing more this quarter than last.
  • Inflation increased in the quarter.
    • Real disposable income growth slowed.
    • The saving rate increased slightly.
• ECB Unexpectedly lowers rates:
  • Shocking the market, the European Central Bank unexpectedly cut its main interest rate:
    • The main interest rate was cut to 0.25% from 0.5%, and
    • The emergency lending rate was cut 0.25% to 0.75%.

Earnings:

• Kellogg Company (NYSE: K) 
  • Kellogg’s reported income of $326 million, or $0.90 a share, compared to $318 million, or $0.89 a share, last year.
  • Revenue decreased to $3.72 billion.
• Vulcan Materials Company (NYSE: VMC)
  • Vulcan Materials reported earnings of $0.32 a share on revenue of $775.2 million.
  • Analysts expected $774.13 million in revenue.
• IntercontinentalExchange, Inc. (NYSE: ICE)
  • ICE reported earnings of $141.3 million, or $1.92 a share, compared to $131.1 million, or $1.79 a share, year-over-year.
    • One-time items and cost related to the NYSE deal pulled earnings down from $1.97 a share, which easily topped estimates of $1.83 a share.
  • Revenue increased 5% to $337.9 million.
• Whole Foods Market, Inc. (NASDAQ: WFM)
  • Whole Foods reported profits of $121 million, or $0.32 a share, compared to $113 million, or $0.30 a share, a year ago.
    • Revenue increased 2% to $2.98 billion.
    • Analysts expected $0.31 a share on $3.04 billion in sales.

Interest Rates

• The two-year Treasury rates fell three basis points to 0.28%.
• The five-year Treasury rate slid one basis point to 1.32%.
• The 10-year Treasury rate rose nine basis points to 2.64%.
• The 30-year Treasury yield increased 13 basis points to 3.77%.

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.