Fundamentals Remain Strong Despite Mixed Economic Data

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Economic data reported today was mixed. First the bad news - durable goods orders were weak in September, falling 1.3 percent mainly because of the volatile aircraft orders component. However, nondefense capital goods shipments rose at a 16.0 percent at an annual rate in third quarter, suggesting capital expenditures and exports in the 3Q GDP report should be strong. Next the okay news - housing prices as reported by the Case Shiller Index showed 5.6 percent year-over-year growth in August. This means housing prices are still clearly rising, but at a slower rate. Finally, the good news - the Conference Board reported that consumer confidence in October rose to 94.5 from 89 in September, a seven year high. Falling oil prices, improving labor conditions and an overall positive U.S. economic outlook are bolstering consumer sentiment. Meanwhile, corporate earnings continue to look strong with year-over-year growth of about 7 percent with half the companies reporting. Concerns of the global growth outlook are still present but the market has settled down after weeks of volatility. An up day today may actually reverse the S&P 500 returns for the month from negative to positive. Please follow durable goods orders on page 61 of the Global Perspectives book.

This morning on Fox Business, Doug explained what caused the current drop in oil prices and what this means for consumers. If you missed it, watch it here.

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