Weekly Economic Update



|Maggie Roche Presents: |

|MONTHLY ECONOMIC UPDATE |

| |

| | |

|MONTHLY QUOTE |November 2014 |

| |THE MONTH IN BRIEF |

|“Reflect on your present |Wall Street had a dramatic October, as investors grew anxious about the big Es: Ebola, Europe and easing |

|blessings, of which every man |(specifically, the end of QE3). Ultimately, stocks climbed higher with help from another big E: earnings. The S&P |

|has many; not on your past |500 advanced 2.32% for the month, pushing into record territory again. Many Asia Pacific stock indices posted |

|misfortunes, of which all men |solid gains; many European indices racked up October losses. It was a rough month for gold, silver, oil and many |

|have some.” |crop futures. Domestic indicators were mostly positive and made the U.S. look like a bright spot in the global |

| |economy. Sales picked up slightly in the housing market, and the stock market seemed to take the wrap-up of the |

|– Charles Dickens |Federal Reserve’s historic stimulus program in stride.1 |

| | |

| |DOMESTIC ECONOMIC HEALTH |

|MONTHLY TIP |The initial Q3 GDP reading suggested that the economy was now on solid footing. The Bureau of Economic Analysis |

| |reported 3.5% expansion in Q3; that and the 4.6% growth of Q2 represented the best six months for the economy in |

|Paying off credit card debt has|more than a decade. Consumer spending was the question mark: it grew just 1.8% in Q3, and it actually retreated |

|more than an immediate benefit:|0.2% in September, a month which also brought a 0.3% decline in retail sales. Some of the Q3 personal spending |

|it can save you money in the |slowdown could be attributed to limited wage growth; personal incomes had grown by an unspectacular 2.0% in 12 |

|long term by improving your |months.2,3 |

|credit, and with less consumer | |

|debt, you can potentially save |Consumer confidence, on the other hand, kept improving. The Conference Board’s October index hit 94.5, and the |

|more for retirement. |University of Michigan’s consumer sentiment gauge had a final October reading of 86.9.2,3 |

| | |

| |Thanks to 248,000 new hires, the U.S. jobless rate fell to 5.9% in September. America hadn’t seen such low |

|MONTHLY RIDDLE |unemployment since July 2008. The U-6 rate (unemployed + underemployed) dipped to a 71-month low of 11.8%.4 |

| | |

|An elephant manages to drink |September saw no real pickup in consumer prices – just another 0.1% gain in both the headline and core Consumer |

|water from a puddle 26' away, |Price Index. The annualized advance for both was just 1.7%. (Food prices, however, had risen 3.0% in 12 months.) |

|but how does the elephant do |Producer prices dipped 0.1% in September after being unchanged for August.2,5 |

|this with an 18' chain around | |

|his left hind leg? |Speaking of production, September brought a 1.0% gain in factory output, although hard goods orders tailed off |

| |1.3%. The 59.0 reading on the Institute for Supply Management’s October manufacturing PMI defied the forecast of |

| |analysts polled by MarketWatch, who had predicted a 0.1% decline from September to a mark of 56.5. (ISM’s |

|Last month’s riddle: |non-manufacturing PMI fell a whole percentage point in September to 58.6.)2,6 |

|You have two twins, three | |

|triplets and four quadruplets |Lastly, the month ended with the American Automobile Association forecasting the average U.S. gas price to dip |

|in a room; how many total |under $3 a gallon in early November, a prediction that came true. On November 3, AAA had a mean nationwide price |

|people do you have in the room?|of $2.98 for regular unleaded, which had become 36¢ cheaper over a year.7,8 |

| | |

| |GLOBAL ECONOMIC HEALTH |

|Last month’s answer: |Just as the Fed halted its monetary stimulus, the Bank of Japan increased its asset purchase program. On |

|9. Two twins are 2 people, |Halloween, the BofJ said that it would boost its quantitative easing to 80 trillion yen a year from the current 50|

|three triplets are 3 people, |trillion yen. The announcement gave a boost to global stocks and poised Japan’s currency for depreciation.7 |

|and four quadruplets are 4 | |

|people. 2 + 3 + 4 = 9. |Not all the news out of the Asia Pacific region was so encouraging. China’s economy was coming off its poorest |

| |quarter since 2008: its official GDP reading for Q3 was 7.3%, down from 7.5% in Q2 and the poorest measurement |

| |taken since Q1 2009. The country’s industrial output rose to 8.0% in September from 6.9% in August, perhaps a sign|

| |of a better number for Q4. The Chinese government’s manufacturing PMI declined 0.3 points to 50.8 for October, |

| |while the HSBC/Markit PMI for the nation came in at a slightly improved 50.4.9,10 |

| | |

| |Was a recession imminent for the euro area? At month’s end, the European Central Bank had refrained from easing, |

| |even with the risk of deflation. Germany’s manufacturing sector grew slightly in October, but there was |

| |contraction in Italy and France and the overall Markit factory PMI for the eurozone was a tepid 50.6.10 |

| | |

| |WORLD MARKETS |

| |European stock market investors lacked confidence in October: the month saw the Europe Dow lose 2.98%, the STOXX |

| |600 1.83%, the FTSE MIB 5.30%, the CAC 40 4.15%, the DAX 1.56%, the RTS 2.87% and the FTSE 100 1.15%.1 |

| | |

| |In Asia, key indices turned in much better performances. While Korea’s KOSPI retreated 2.76%, the Shanghai |

| |Composite gained 2.38%, the Nikkei 225 1.49%, the ASX 200 4.42%, and the Asia Dow 1.98%; the Sensex and Hang Seng |

| |both advanced 4.64%. In the Americas, the Bovespa gained 0.95%, the IPC All-Share 0.09% and the DJ Americas 1.98%.|

| |Up north, the TSX Composite slipped 2.32% for October.1 |

| | |

| |Finally, the Global Dow lost 0.26% last month; the MSCI Emerging Markets Index rose 1.07% and the MSCI World Index|

| |advanced 0.57%.1,11 |

| | |

| |COMMODITIES MARKETS |

| |For the second straight month, big losses characterized this sector (select crops aside). Supply again outweighed |

| |demand for NYMEX crude: oil prices dropped 11.63% to $80.54 a barrel by Halloween. Other energy commodities were |

| |hit hard, too: heating oil slipped 5.11%, natural gas 6.35% and unleaded gasoline a whopping 16.94%. While copper |

| |moved 1.30% north on the month, silver retreated 5.44% and gold fell 2.94%; platinum futures lost 5.38%. Silver |

| |ended October at $16.11 an ounce, gold at $1,171.60 an ounce. The U.S. Dollar Index gained a little more in |

| |October. On September 30, it had settled at 85.94; on Halloween, it closed at 86.92 to go +1.14% for the |

| |month.12,13 |

| | |

| |With winter coming to northern climes, certain ag commodities had a great month. Wheat futures rose 10.04%, |

| |soybean futures 14.31% and corn futures 16.33%. Sugar advanced 3.36%. The major losses came in warm-weather crops:|

| |cocoa fell 11.96%, coffee 3.01%.12 |

| | |

| |REAL ESTATE |

| |September saw a minor acceleration in purchases of both new and existing homes: the National Association of |

| |Realtors reported resales up 2.4% and the Census Bureau found a 0.2% monthly advance in sales of new residences. |

| |Year-over-year, new home sales had improved 17.0%. NAR’s pending home sale index rose 0.3% for September after |

| |falling 1.0% for August. As for home prices, the yearly gain in the S&P/Case-Shiller Home Price Index continued to|

| |moderate, lessening 1.1% to 5.6% in the August edition.2,14 |

| | |

| |Markedly declining mortgage rates may have promoted an increase in home buying for October. On October 30, Freddie|

| |Mac had the average interest rate on a conventional home loan at 3.98%. In Freddie’s September 25 Primary Mortgage|

| |Market Survey, it was up at 4.20%. While the mean rate that Freddie measured for the 1-year ARM was 2.43% in both |

| |surveys, the 15-year fixed became cheaper in October with average interest rates falling to 3.13% from 3.36%, and |

| |so did 5/1-year ARMs with mean rates falling from 3.08% to 2.94%.15 |

| | |

| |As the housing industry said goodbye to another summer, the yearly rate of housing starts topped the 1 million |

| |mark again thanks to a 6.3% September rise in groundbreaking. The Census Bureau also noted a 1.5% gain in building|

| |permits for that month.16 |

| | |

| |LOOKING BACK…LOOKING FORWARD |

| |Last month, one of the biggest threats to stocks wasn’t an economic development but a disease. The first Ebola |

| |cases reported in the U.S. and the fear about the global reach of the virus contributed to the Dow’s triple-digit |

| |plunges as much (or more) than headlines from Europe and China. The fears eventually lessened, the market went |

| |back to focusing on fundamentals, and U.S. equities came out ahead. Across October, the DJIA rose 2.04% to |

| |17,390.52, the S&P 500 2.32% to 2,018.05, the Nasdaq 3.06% to 4,630.74 and the Russell 2000 a tremendous 6.52% to |

| |1,173.51, taking its YTD return to +0.85%. The CBOE VIX lost 2.28% in October, descending to 14.03 on Halloween.1 |

| | |

| |% CHANGE |

| |Y-T-D |

| |1-YR CHG |

| |5-YR AVG |

| |10-YR AVG |

| | |

| |DJIA |

| |+4.91 |

| |+11.87 |

| |+15.81 |

| |+7.30 |

| | |

| |NASDAQ |

| |+10.87 |

| |+18.14 |

| |+25.29 |

| |+13.39 |

| | |

| |S&P 500 |

| |+9.18 |

| |+14.89 |

| |+18.95 |

| |+7.85 |

| | |

| |REAL YIELD |

| |10/31 RATE |

| |1 YR AGO |

| |5 YRS AGO |

| |10 YRS AGO |

| | |

| |10 YR TIPS |

| |0.43% |

| |0.40% |

| |1.41% |

| |1.67% |

| | |

| | |

| | |

| |Sources: online., , - 10/31/141,17,18 |

| |Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. |

| |These returns do not include dividends. |

| | |

| |So, is Wall Street poised for a great month? The market doesn’t seem to be complaining (yet) about the lack of |

| |easing from the Fed, as it remains sensitive and responsive to the needs and wishes of investors. November began |

| |with the S&P at another all-time peak, and the factors which may affect the market the most appear predictable: |

| |earnings, the mid-term elections, and the ECB’s decision on quantitative easing. On Halloween, Thomson Reuters |

| |said corporate earnings growth was averaging 9.3% with 76% of S&P 500 firms so far beating estimates, we just got |

| |the second impressive quarterly GDP reading in a row, and the Fed likely won’t make a move with interest rates |

| |until at least mid-2015 – all factors that might inspire some calm and some further gains for stocks, or at least |

| |the S&P hanging around the 2,000 level for a while.19 |

| | |

| |UPCOMING ECONOMIC RELEASES: Coming up, the important economic reports include: October’s ISM services PMI and the |

| |September ADP employment report (11/5), the October Challenger job-cut report (11/6), the October employment |

| |report from the Labor Department (11/7), September wholesale inventories (11/12), October retail sales, the |

| |initial November consumer sentiment index from the University of Michigan, and September business inventories |

| |(11/14), October industrial output (11/17), the October PPI (11/18), the October Fed policy meeting minutes and |

| |October housing starts and building permits (11/19), October existing home sales, the October CPI and the |

| |Conference Board’s latest leading indicator index (11/2o), September’s Case-Shiller home price index, the |

| |Conference Board’s November consumer confidence index and the second estimate of Q3 growth from Washington |

| |(11/25), and then a raft of data all at once on the eve of Thanksgiving – October new home sales, pending home |

| |sales, personal spending and hard goods orders plus the final November University of Michigan consumer sentiment |

| |index (11/26). |

| |

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|Securities offered through Cetera Advisors LLC, Member FINRA/SIPC. Roche Financial and Cetera Advisors LLC, are not affiliated entities. |

| |

|This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This|

|information has been derived from sources believed to be accurate. MarketingPro, Inc. is not affiliated with any broker or brokerage firm that may|

|be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the|

|purpose of avoiding any Federal tax penalty. This is not a solicitation or recommendation to purchase or sell any investment or insurance product |

|or service, and should not be relied upon as such. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip |

|stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association|

|of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be |

|representative of the stock market in general. It is not possible to invest directly in an index. The Russell 2000 Index measures the performance |

|of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index® (VIX®) is a key measure of market expectations of near-term |

|volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock |

|Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading |

|provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's |

|largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two |

|divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The |

|Europe Dow measures the European equity markets by tracking 30 leading blue-chip companies in the region. The STOXX Europe 600 Index is derived |

|from the STOXX Europe Total Market Index (TMI) and is a subset of the STOXX Global 1800 Index. The FTSE MIB (Milano Italia Borsa) is the benchmark|

|stock market index for the Borsa Italiana, the Italian national stock exchange. The CAC-40 Index is a narrow-based, modified |

|capitalization-weighted index of 40 companies listed on the Paris Bourse. The DAX 30 is a Blue Chip stock market index consisting of the 30 major |

|German companies trading on the Frankfurt Stock Exchange. The RTS Index (abbreviated: RTSI, Russian: Индекс РТС) is a free-float |

|capitalization-weighted index of 50 Russian stocks traded on the Moscow Exchange. The FTSE 100 Index is a share index of the 100 companies listed|

|on the London Stock Exchange with the highest market capitalization. The Korea Composite Stock Price Index or KOSPI is the major stock market |

|index of South Korea, representing all common stocks traded on the Korea Exchange. The SSE Composite Index is an index of all stocks (A shares and|

|B shares) that are traded at the Shanghai Stock Exchange. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE). |

|The Nikkei average is the most watched index of Asian stocks. The S&P/ASX 200 is Australia's “premier” share market index. The Asia Dow measures |

|the Asia equity markets by tracking 30 leading blue-chip companies in the region. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), |

|also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 |

|well-established and financially sound companies listed on the Bombay Stock Exchange (BSE). The Hang Seng Index is a freefloat-adjusted market |

|capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The Bovespa Index is a gross|

|total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The Mexican IPC |

|index (Indice de Precios y Cotizaciones) is a major stock market index which tracks the performance of leading companies listed on the Mexican |

|Stock Exchange. The Dow Jones Americas Index measures the Latin American equity markets by tracking 30 leading blue-chip companies in the region. |

|The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by |

|market capitalization. The Global Dow is a 150-stock index of corporations from around the world created by Dow Jones & Company. The MSCI World |

|Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging |

|Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The US Dollar Index |

|measures the performance of the U.S. dollar against a basket of six currencies. Additional risks are associated with international investing, such|

|as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of |

|the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past |

|performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally |

|invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors |

|cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is |

|needed, the reader is advised to engage the services of a competent professional. |

| |

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