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George Chamberlin's Money in the Morning

On a day when most "experts" were predicting some serious profit taking on Wall Street, the markets roared higher and, combined with the big rally on Friday, erased most of the losses in September. The Dow industrials rose 300 points, extending the big gains on Friday. The S&P 500 stock index was also up more than 1.5 percent, making it five sessions in a row to the upside, the first time that has been accomplished in 2015.


The growing belief is the U.S. economy is nowhere near a recession, despite the constant messages of doom and gloom. "Equity bear markets typically occur when the economy falls into recession and corporate profits experience a pronounced decline. The odds of a global or U.S. recession are low, which means more upside potential than downside risk to the earnings outlook," said Bob Doll, chief equity strategist at Nuveen Asset Management.

Whenever the talk turns to energy prices, most people think about the price they pay at the pump. Here on the West Coast we don't worry too much about the cost of home heating oil, which is a big burden for people back east. Well, good news for them comes from the U.S. Energy Information Administration. "If winter temperatures come in as expected by U.S. government weather forecasters, U.S. consumers will pay less to stay warm this winter no matter what heating fuel they use," states the Energy Outlook. Like lower gas prices, lower heating oil prices put more money in consumer pockets, just in time for the holiday shopping season.

The U.S. Treasury yesterday auctioned off $21 billion in three-month T-bills with a yield of zero. That's right, lend your money to Uncle Sam for three months and get paid absolutely nothing. More aggressive investors who wanted to buy a three-month bill in the secondary market will get paid 0.003 percent. Again, more evidence people are more concerned with the return of their money, not the return on their money.

Home prices continue to rise at a pace faster than inflation. CoreLogic reports this morning that home prices nationwide rose 6.9 percent in August compared to the same month a year earlier. When compared to the previous month, prices in August were up 1.2 percent. "Continued gains in employment, wage growth and historically low mortgage rates are bolstering home sales and home price gains," said CoreLogic CEO Anand Nallathambi. He adds, "These factors will likely support continued home price appreciation in 2016 and possibly beyond."

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