Heritage Market Brief – October

Each month, our Heritage Investment team publishes a market brief to provide an overview of the major factors influencing the US economy, including a summary of key sectors and the current positives & challenges.

Click here for the October 2015 update.

Here are some key highlights:

POSITIVES

  • September auto sales continued to soar as pent-up demand from an aging fleet, low interest rates, and declining oil prices have auto sales on track to reach an annualized rate of 18.17 million units, the highest rate since July 2005.
  • While pending home sales and home prices have softened a bit in recent months, housing still continues to be a bright spot in the economy
  • Consumers may be feeling more confident as a recent decline in the savings rate to 4.6% and increase in spending may indicate consumers are now willing to spend while saving less

CHALLENGES

  • While still in expansionary territory after 33 months, the September IMF Manufacturing Index fell to 50.2 driven largely by a 5 point decline in backlog orders to 41.5 and a 1.6 point decline in new orders to 50.1
  • The Fed will likely have a tough time meeting its 2% inflation goal as commodity prices continue to weaken and manufacturing raw materials & finished goods prices have recently come under pressure
  •  September nonfarm payrolls only added 142,000 jobs relative to the 200,000 the market expected with private payrolls missing estimates substantially