Sunday, October 3, 2010

Friday - Inside Day - October 1 st

Q4 trading started cautiously with the Dow and the S&P 500 showing small gains while the Nasdaq 100 failed to advance. Equities saw their highs early on but then slid on the heel of a slew of economic data releases (discussed below). Afternoon upside was light, but sufficient to bring green closes to some of the indexes.

Among the economic data released today were August income and spending numbers. These came in solidly, with personal income up 0.5% (consensus estimate: a rise of only 0.3%), representing the best monthly increase in personal incomes in 2010. Personal spending was also up, rising 0.4% (consensus estimate: a 0.3% increase). Core personal consumption expenditures were also on the increase, up 0.1%, meeting consensus estimates.

The University of Michigan reported its final September consumer sentiment reading today. Consumer confidence improved from 66.6 to 68.2 (consensus estimate: a reading of 67.0). The latest reading on construction spending was also positive, up 0.4% in August (prior month's reading: a decline of 1.4%; consensus estimate: a 0.5% decrease). Proving to be disappointing on the other hand were the latest ISM Manufacturing readings for September. The ISM index lost some ground month-over-month, sliding to 54.4 from a prior reading of 56.3 (consensus estimate: a reading of 54.8).
The US SEC and the US Commodity Futures Trading Commission jointly released their findings on the causes of the ominous 'flash crash' from early May today. A 100+ page paper was compiled on the issue. The document entitled 'FINDINGS REGARDING THE MARKET EVENTS OF MAY 6, 2010 - REPORT OF THE STAFFS OF THE CFTC AND SEC TO THE JOINT ADVISORY COMMITTEE ON EMERGING REGULATORY ISSUES' can be downloaded from the SEC website.


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