Weekly Economic Update: October 15, 2018

The Markets (as of market close October 12, 2018)

Despite a surge at the end of the week, stocks plummeted last week. The major benchmark indexes all lost value, led by the small caps of the Russell 2000, which fell over 5.0%. The S&P 500, which rebounded last Friday, suffered through its biggest two-day decline last Wednesday and Thursday since early February when the stock market had a similar slide. The CBOE Volatility Index shot to its highest level since late March last Thursday as trading volumes soared. The cause of the latest stock dump is hard for analysts to determine and may be due to a combination of the trade conflict between the United States and China, a weakening global economy, and rising interest rates. As investors moved from equities, some money was pushed to bonds, driving long-term bond yields lower as prices rose. The price of crude oil (WTI) fell back last week while the price of gold (COMEX) rose for the second week in a row.


  • Inflationary pressures at the consumer level remained subdued last month as the Consumer Price Index increased a scant 0.1%. Over the last 12 months, the CPI has risen 2.3%.
  • Sellers of domestic goods and services saw their prices rise 0.2% in September, according to the Bureau of Labor Statistics.
  • Import prices rebounded in September. Higher fuel prices led the import price increase. For the year, import prices are up 3.5%. A strong dollar has kept upward pressures of import prices in check.


The housing sector is one segment of the economy that’s been lagging for some time. September’s figures on housing starts and existing home sales may finally show some upward movement, particularly in-home prices.