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Twitter Goes Public; US Economy Grows

Market Digest – Week Ending 11/8

Strong US jobs growth and an interest rate cut by the ECB left domestic stocks up modestly and international stocks down modestly for dollar based investors. American employers added 204,000 jobs in October as the private sector largely ignored the government shutdown. The numbers exceeded even the most optimistic forecasts. Bonds and gold fell as a result, as the data suggests the Fed will begin tapering bond purchases in the coming months. In Europe, inflation fell below 1% in October. Combined with falling economic growth expectations, this prompted the ECB to cut benchmark interest rates by half to 0.25%.

Weekly Returns:

S&P 500: 1,771 (+0.5%)
FTSE All-World ex-US: (-0.9%)
US 10 Year Treasury Yield: 2.75% (+0.13%)
Gold: $1,289 (-2.0%)
USD/EUR: $1.336 (-0.9%)

Major Events:   

  • Tuesday – US home ownership rates dropped to 65.3% in the third quarter, the lowest in 18 years, according to the Census Bureau.
  • Wednesday – Blockbuster announced it will shut its remaining 300 stores and close its mail by DVD operation.
  • Wednesday – Tesla Motors shares dropped 15% after reporting a shortage of batteries and higher than expected development costs.
  • Thursday – Twitter began trading on the NYSE, with shares rising over 70% for the day on strong demand.
  • Thursday – Citing low inflation, the ECB cut its benchmark lending rate to 0.25%.
  • Friday – American employers added 204,000 jobs in October, ahead of expectations.

Our Take:

In 140 characters or less in honor of Twitter’s successful IPO: In spite of our dysfunctional government, the US economy is doing what it does best – grow and innovate.

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