Daily Market Wrap
October 13, 2017
Stocks have ended the day higher. The Dow closed up 30.71 at 22,871.72 and the S&P 500 closed up 2.24 at
2,553.17. Ā Mortgage Bonds ended the session near their highs and above the 100-day Moving Average.
The Consumer Price Index (CPI), which measures inflationĀ onĀ the consumer level, increased 0.5% in
theĀ monthlyĀ of September. Ā On a year over year basis, headline CPI rose from 1.9% to 2.2%, which was slightly
lower than the 2.3 expected.Ā The Core CPI Rate, which strips out food and energy prices, remained unchanged at
1.7%, which was lower than expectations of 1.8%.Ā Both of these numbers being beneath expectations and Core
Inflation remaining unchanged and beneath 2% helped push Bonds higher.
Retail Sales for September were up 1.6%, which was weakerĀ than the 1.8% gain expected. Ā The Control Group,
which strips out autos, gas, and building materials, was up 0.4%. Ā This was stronger than expectations looking for a
0.2% gain.Ā Overall, this number is really market moving, but Sales minus autos and the control group were
stronger than expectations.
Consumer Sentiment was reported at 101.1, coming in over expectations of 95.4 and last month’s 95.1. Today’s
reading was nearly a 14 year high.
Economic Data
Consumer Price Index: Actual = 2.2%; Previous = 1.9%
Consumer Price Index Core: Actual = 1.7%; Previous = 1.7%
Retail Sales: Actual = 1.6%; Consensus = 1.8%; Previous = negative 0.1%
Consumer Sentiment: Actual = 101.1; Consensus = 95.4; Previous = 95.1
Upcoming Events
Next week is highlighted by Housing Data ā We will be receiving the NAHB Housing Market Index, Housing Starts,
and Existing Home Sales.
Technical Picture
Mortgage Bonds have broken above the 103 resistance level and 100-day Moving Average that they were
battling with earlier in the day.Ā Bonds are now just beneath the next ceiling at the 25-day Moving Average.Ā The
10-year Treasury Note Yield has broken beneath the 200-day Moving Average and is now just above the 25-day
Moving Average, which is the next floor.Ā The technicals are looking favorable.
Position
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