Locker Room

Weekly Economic Update 11/10/2008

11/10/08 in Locker Room   |   hskrdave   |   10828 respect


David Goodrich Presents

Weekly Economic Update for the Week of November 10, 2008

Quote of the week. “Committing a great truth to memory is admirable; committing it to life is wisdom.” – William Arthur Ward

Jobless rate: 6.5%. U.S. unemployment hit its highest level since 1994 in October; 10.08 million Americans were jobless, the most in a quarter-century. The rise from September’s 6.1% figure may inspire yet another interest rate cut. Some economists think the Federal Reserve will make a quarter-point or half-point cut at or before its December 16 policy meeting.1

Sectors contract. The Institute for Supply Management’s October service-sector index read 44.4, showing contraction after two months of growth. Its October manufacturing index came in at 39.0.2

What will happen in Detroit? U.S. auto sales fell by 31.9% in October.3 The plunge may lead to federal aid. Friday, General Motors Corp. suspended merger talks with Chrysler LLC and stated that it might run out of operating cash before the end of the year if help did not come. While Ford Motor Company reported having “sufficient liquidity”, an auto industry bailout now seems imminent to some analysts.4

Pending home sales dip. There just wasn’t much good news last week. After a 7.4% August gain, the National Association of Realtors’ pending home sales index fell 4.6% for September. However, the index was still 1.6% higher than it was one year ago. 5

Weak earnings, wan indicators. Those factors hurt the Street early last week, but stocks rose on Friday, powered by the hope that the Fed might make a rate cut in the wake of the new jobless figures.

% Change



5-Yr Avg









S&P 500




(Source:, 11/7/08)6


Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Riddle of the week. Two incense sticks of equal length are lit at the same time. Stick #1 burns for 6 hours before it extinguishes itself. Stick #2 burns for 3 hours before it extinguishes itself. How long must stick #1 burn before it is 2x the length of stick #2?

Contact my office or see next week’s Update for the answer.

Last week’s riddle: A man walked across the surface of a lake on his own two feet. How did he do it?

Answer: It was winter; the lake was frozen.

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These views are those of Peter Montoya Inc., and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the "NYSE") and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. The market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.




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