Market tone
Global and US markets rebounded this week, relieved that September’s disappointing payrolls report as well as weak US, UK and German export data could mean low US interest rates. The Chicago Board Options Volatility Index (VIX) fell below 18, reflecting improved investor confidence and ending its first month-long stretch above 20 since 2012. This week’s reports:
- Fed officials held back from raising short-term interest rates at their September policy meeting because of concerns that global weakness could impact the US economy, according to minutes released Thursday. The officials were also concerned about persistently low inflation
- US exports fell 2% in August while imports rose 1.2%, resulting in the US trade deficit widening 15.6% to $48.3 billion. The strong US dollar and weak demand in foreign markets contributed to the growing trade gap
- US import prices fell 0.1% in September, less than the expected 0.5% decrease
- Prices for imported oil rose 1.1% while non-oil import prices declined 0.2%, half the pace of contraction in July and August
- Export prices fell 0.7%.
- The Institute for Supply Management’s non-manufacturing index fell from 59.0 in August to 56.9 in September
- The business activity index, a gauge of services production, declined from 63.9 in August to 60.2 in September. Both measures indicate continued expansion, but at a slower pace than in the previous month
- Initial jobless claims fell 13,000 to 263,000 for the week ending October 3rd, near a 42-year low
- Continuing claims rose 9,000 to 2.2 million for the week ending September 26th
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or
remove ads
.
For the week, the S&P 500 rose by 3.26%% for a year to date return of (-) 2.14%.
Summary
IBD: Confirmed uptrend
GMI: 3/6- Sell signal since market close of August 24, 2015
BCI: Maintaining a cautious but fully-invested portfolio of in-the-money calls and out-of-the-money puts.