Stocks rose on better than expected earnings reports coupled with a jump in oil prices. The Dow moved up 40 points to 18,202 on heavier volume and continues to hold within a tight trading range as cash levels are higher than Ben Franklin’s kite. The Federal Reserve issued its latest Beige Book of economic data showing that inflation was running at 1.7% and overall economic growth was “modest”. The report took some wind out of the “raise rates now” crowd.
Intel reported earnings today and while the big tech player posted better than expected earnings and sales its shares were lower thanks to a weak forward outlook. Sales were up 9% and profits were higher by 21% but the stock was off 6%. Go figure.
Q3 Economic data from China showed that GDP growth remained at 6.7%. The number was due to more gubment spending, record bank lending and a strong real-estate market. While these look good they are unfortunately adding to the country’s massive debt load. Economist Julian Evans “hyphen” Pritchard said the reports show than China’s growth is increasingly being driven by financial debt growth and a real-estate boom. This kind of sounds like the US in our buildup to the ’08 crisis. “Hyphen” thinks that unless policy makers can pull a rabbit out of their hat the growth rates could be on borrowed time.
Gold closed up $7 an ounce to $1,269 while WTI crude oil finished at $51.43 up 2.24%.