US industrial production in September is projected to increase 0.2% vs. the previous month in tomorrow’s report from the Federal Reserve, according to The Capital Spectator’s median point forecast for several econometric estimates. The expected gain represents a modest revival relative to August’s 0.1% decline.
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Retail sales fell more than expected last month, according to this morning’s update from the US Census Bureau. Spending dropped 0.3% in September—a sharp reversal from August’s robust 0.6% gain and the first monthly dose of red ink since January. The news arrives in the wake of a hefty wave of selling in the stock market lately and so it’s tempting to see dark signals in today’s release. The weak data on retail spending could be the start of trouble for the macro climate in the US, but it may just as easily turn out to be noise. For the moment, the latter is a reasonable view, based on the year-over-year trend.
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The US stock market’s recent turbulence took a breather yesterday, providing a bit of calm to the VIX Index, a measure of the implied volatility of S&P 500. Nonetheless, the VIX closed yesterday at its highest level in more than two years. Since Sep. 19, the VIX has doubled to 22.79 as of Oct. 14. Clearly, volatility has taken a sharp swing higher, raising worries that the so-called fear index is flashing a warning sign for the market. But interpreting the VIX, and market volatility generally, can be tricky. For some perspective, let’s consider how the VIX and several alternative measures of market volatility compare in an apples-to-apples framework via percentile ranking. By that standard, there’s still room for debate for interpreting the latest spike in vol.
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● US-led air strikes intensify as Syria conflict destabilises Turkey | Reuters
American-led forces have sharply intensified air strikes in the past two days against Islamic State fighters threatening Kurds on Syria’s Turkish border after the jihadists’ advance began to destabilise Turkey.
● Oil Falls to Four-Year Low as Bond Yields Drop to Records | Bloomberg
Crude oil fell to the lowest level in almost four years and yields on government bonds from Germany to Spain dropped to records on evidence growth is slowing.
● U.K. Jobless Rate Lowest Since Late 2008 | RTT News
The jobless rate fell to 6 percent during June to August, the lowest since late 2008 and down from 6.5 percent seen in March to May period.
● German inflation steady but still low | MarketWatch
German inflation remained stable at a very low level in September, Germany’s Federal Statistics Office said Wednesday, keeping the European Central Bank under pressure to add further stimulus boost the eurozone economy.
● China inflation slows to near five-year low | BBC
Inflation in China eased to a near five-year low in September, adding to further evidence of a slowdown in the world’s second largest economy.