(eToro Blog) The United States released a mixed bag of economic data this morning. The Philly Fed index rose to 8.7 in October from -17.5 in September. This huge jump was welcomed with a sign of relief by manufacturers. This was the first positive print in three months. A print above zero indicates expansion in manufacturing. The number came well above market expectations of a print of -9. In August the Philly Fed index fell to -30.7 sending shockwaves in the manufacturing industry. Another index, the Empire State index printed -8.5 in October, up from -8.8 in September. Both of these indices are watched by the markets for strength of the manufacturing industry. The manufacturing industry has steadily lost jobs since the recession began in 2008. Markets are waiting now for the ISM manufacturing index which will be released in November. The last couple of economic indictors has been positive for the broader economy with September Non-Farm payrolls showing a growth of 103K jobs.
Sales of existing home sales fell by 3% in September according to the National Association of Realtors. It has become difficult for buyers to qualify for home loans due to limits that went into effect in October. The cancellation rate is also higher around 18%. The median prices of homes dropped 3.5% to $165,000. As rents stay constant, buyers are not motivated to make purchases of homes. The housing market is faced with a deluge of existing homes due to a large number of home owners no longer being able to make payments. Foreclosed homes account for 305 of the existing home market. Mortgage rates have plunged to record levels recently after the Federal Reserve initiated Operation Twist. The Fed seeks to lower longer term interest rates to encourage more consumers to buy homes.
The Dollar strengthened today as U.S. equity markets stayed firmly in the red. The Dow plunged 0.8%, the Nasdaq plunged 1.5% and the S&P 500 is down 0.8%. Traders on OpenBook continue to bearish and have benefited from the recent moves down. The shorts have their limits around 11,300 and stops around 11,700.
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