George Chamberlin's Money in the Morning

October 23, 2014

The terror in Ottawa took stock prices lower yesterday. The markets had been meandering throughout early morning trading, a brief respite after three consecutive winning sessions. However, things changed as word spread about the events in the Canadian capital and the markets turned south, with the Dow industrials ending the session with a 153-point loss. As has been the case for some time, it is not actually the event itself driving the market lower, but the uncertainty about how serious the situation could become. Too be sure, the intent of organized terrorism is to take down the economies of the free world. It was no coincidence that the attacks of Sept. 11, 2001, targeted the World Trade Center in New York and the neighboring financial hub of the world.

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The terror in Ottawa took stock prices lower yesterday. The markets had been meandering throughout early morning trading, a brief respite after three consecutive winning sessions. However, things changed as word spread about the events in the Canadian capital and the markets turned south with the Dow industrials ending the session with a 153-point loss.

However, it didn't take very long for the markets to rebound. Stocks came out the chute fast this morning, adding more than 200 points in the first half-hour of trading. Some strong quarterly reports from companies including 3M and Caterpillar are helping to lift stocks.

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Small businesses, the backbone of the U.S. economy, are surprisingly optimistic about the economy and their own businesses. The American Express small-business monitor finds that 63 percent of owners maintain a positive outlook, a level we haven't seen since 2007. It could be the result of higher revenue as 42 percent say they are seeing higher sales and profits. "Cash flow is less of a concern and key indicators such as hiring and capital investments are trending in a positive direction," said Alice Bredin of American Express.

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Mortgage rates keep moving lower. Freddie Mac said today the average rate on a 30-year fixed-rate mortgage fell to 3.92 percent, the lowest rate in more than a year. Last week’s swoon over concerns about global economies drove other interest rates lower and it continues to result in lower rates for mortgage loans.

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The number of people filing for unemployment benefits in the past week rose slightly to 283,000, up 17,000 from the previous week. However, it was the sixth week in a row that the number has been below 300K, the first time we've had such a streak since June 2006.

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Add all this stuff together and it is easy to explain why the Conference Board's report of leading economic indicators took a big jump in September. "The outlook for improving employment and further income growth are expected to support the moderate expansion in the U.S. economy for the remainder of the year," said economist Ataman Ozyildirim. However, leave it to the folks at the board to put a negative spin of good news, saying, "The weak advances in the housing market remain a bigger risk to the outlook than short-term financial gyrations." Note to the Conference Board: Did you guys miss the report from the National Association of Realtors saying existing home sales rose in September to the highest level so far in 2014?

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One of the 50 original Apple computers manufactured by Steve Jobs and Steve Wozniak in the Jobs' garage in 1976 sold at auction yesterday for $905,000. The preassembled computer, still in working condition, was expected to sell for about half that amount. It was bought by the Henry Ford Foundation and will be on display at a museum in Dearborn, Mich.

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With the exception of loyal fans here in San Diego, the vast majority of people nationwide will be rooting for the Denver Broncos in the game against the Chargers tonight. The latest Harris Poll released last week said the Broncos are now America's favorite football team, replacing the Dallas Cowboys who had been in the top spot for six years. Rounding out the top five fan favorites are the New York Giants, Green Bay Packers, Dallas Cowboys and Pittsburgh Steelers. The Bolts are way down the list, tied for the No. 23 spot with the Baltimore Ravens and Kansas City Chiefs. The Jacksonville Jaguars are the least popular team in the NFL.

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The terror in Ottawa took stock prices lower yesterday. The markets had been meandering throughout early morning trading, a brief respite after three consecutive winning sessions. However, things changed as word spread about the events in the Canadian capital and the markets turned south with the Dow industrials ending the session with a 153-point loss.

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