Weekly Economic Update: October 28, 2019

The Markets (as of market close October 25, 2019)

Solid corporate earnings reports and encouraging signs on the trade war front spurred stocks higher last week. The S&P 500 reached its second highest closing value by last Friday, while the Dow is nearing a record high. Word came from U.S. government officials last Friday that progress had been made in negotiations with China on the first phase of a potential trade agreement between the two economic giants.The technology-heavy Nasdaq led the way among the major indexes gaining almost 2.0%, followed by the small caps of the Russell 2000, which surged over 1.5%. The large caps of the S&P 500 and Dow also fared well. Even the Global Dow rose more than 1.0%. As to corporate earnings, the majority of S&P 500 companies posting earnings for the third quarter beat analysts’ expectations. Investors may also be anticipating the Fed dropping interest rates this week following its October meeting.


  • September, the last month of the federal government’s fiscal year, recorded a budget surplus of $83 billion ($119 billion in September 2018). For the fiscal year, the deficit was $984 billion, 26.4% greater than the 2018 fiscal year deficit. In 2019, total individual income tax receipts were $1,718 billion, while corporate tax receipts were $230 billion. The largest government expenditures in 2019 were $1,044 billion for Social Security, $688 billion for national defense, and $651 billion for Medicare.
  • September proved to be a sour month in the manufacturing sector. New orders for long-lasting durable goods fell 1.1% in September from August. This decrease follows three consecutive monthly increases.
  • After climbing for two consecutive months, sales of existing homes fell 2.2% in September. Overall, sales are still up 3.9% from a year ago.
  • Sales of new single-family homes fared no better than existing home sales last month. New home sales dropped 0.7% in September, but are still 15.5% ahead of their pace a year ago.


This is a busy week for market-moving economic reports:

  • The week starts off with the latest report on international trade in goods for September.
  • The first release of the gross domestic product for the third quarter is also available this week.
  • The Federal Open Market Committee meets this week.
  • Finally, the report on personal income and spending is out at the end of the week, covering how much consumers are making and at the prices of consumer goods and services — an important inflationary indicator used by the Federal Reserve.