|
The Month In Review
The 10-year Treasury opened at 1.63%
this morning (December 7), down from
1.75% on November 2. The month opened with oil at $88.13, the Euro at
$1.285 vs.... the Dollar and Gold at $1,677.80. The
Commerce Department's Consumer Confidence Index opened the months
at 72.2, it's highest level since February 2008. In addition, the
index is up from 40.9 a year ago, the biggest one year jump since 1994.
A reading of 90 indicates a healthy economy. Fitch Ratings
warns that if President Obama does not reach agreement with Congress on the
fiscal cliff, it may strip the US of it's AAA rating. OC housing
inventory shrinks to an 8-year low, as the median home price hit a 4-year
high, up 12.3% from a year ago. California home prices rose for the eighth
straight month as October sales hit the highest level since May.
October retail sales dropped 0.3% while auto sales fell 1.5%, on
concerns over the looming fiscal cliff and the effects of Hurricane Sandy.
The FED meeting minutes indicate they will likely continue
buying bonds to stimulate the economy, keeping interest rates artificially
low. The current stimulus program expires the end of December.
Bernanke also indicated the FED will take action to speed growth and help
with a rebound in the housing market. OC unemployment ticked up to
7.2% due to more new workers coming into the market than new jobs created.
Statewide, California's unemployment rates dropped one tick to 10.1%, while
the unemployment rate nationwide sits at 7.9% for October.
Bernanke strongly urged Congress to ward off the sudden and severe
combination of tax increases and federal spending cuts coming the end of
the year. "Uncertainties about the situation in Europe
and especially prospects for federal fiscal policy seem to be weighing
on spending decisions of households and businesses as well as on financial
condition," Bernanke said in a speech at the New York Economic
Club. Meanwhile, lines seem to be being drawn in the sand
by Obama and Congress. Not doubt, an agreement will be reached at the
last minute. If not, most economist believe that if the automatic
cuts go into place, the economy would likely slip back into recession.
Over regulation and the employee union's unwillingness to compromise gave
Hostess no choice but to file Chapter 7 and go out of business.
No more Twinkes. "Where is John Gault?"
The University of Michigan's consumer confidence index ticked up to 82.7 in
October, the highest since 1984. Gas prices drop to $3.77, the lowest
since July. At the same time, the Conference Board' s CCI rose to
73.7 in November. Positive news on Black Friday sales as well as
positive economic news from Germany and China boosted stocks.
Germany's business confidence index rose unexpectedly after six straight declines,
and China' s manufacturing expanded for the first time in 13 months, the
latest encouraging sign that the world's second largest economy is
recovering from the 2008 recession. OC housing inventory fell to a
record low for the 14th consecutive week, while the closely watched
Case-Schiller Home Price Index, showed regional home prices (LA and OC) up
1% August to September and up 4% since September 2011. Nationwide,
home prices were up 3.6% over the past year. The Cal State Fullerton
Leading Economic Indicator for Southern California hit it's highest level
since 1991, up three consecutive years to 107.7, after sinking to 97.9
in the 3rd Q 2009. November auto sales achieved
the best pace in 5 years, largely due to replacements from Hurricane
Sandy. US workers productivity grew by 2.9% from July to
September. That's the fastest pace in more than two years, and well
above the 1.9% increase economists had expected. When hiring slows,
productivity goes up as less workers are doing more.
Employers added 146,000 jobs, while the reported unemployment rate dropped
to 7.7%. This is interesting as the real unemployment rate still stands
just under 15% with millions who have given up looking or are part-time and
want full-time jobs, and still well below 250,000 new jobs needed monthly
to correct that real unemployment rate. December 7 saw oil at
$86.05, the Euro at $1.29 vs.. the Dollar and Gold at $1,701.55.
|
