Financial market indexes finished higher for the October 31 week. The S&P 500 gained 2.69% while the Dow Jones Industrial Average was up 3.43% for the week.
The Federal Open Market Committee’s October meeting was the highlight of the week. The FOMC reported it would end its QE3 asset purchase program. The FOMC will cease the purchasing of mortgage-backed securities and longer-term Treasury securities. It will, however, continue the reinvestment of the securities already on its balance sheet. In its weekly balance sheet report the Federal Reserve reported total assets of $4.49 trillion.
The FOMC’s October announcement to end QE3 followed improved economic conditions in the U.S. The unemployment rate is currently 5.9%, according to the Bureau of Labor Statistics. Inflation is currently at 1.4%, according to the Bureau of Economic Analysis’ PCE price index. The BEA’s most recent reading for GDP reported a 3.5% growth rate for the third quarter on a seasonally adjusted annual rate basis compared to a 4.6% increase in the second quarter.
In its October meeting the FOMC also reported that it would keep the federal funds rate unchanged at 0% to 0.25%. The rate is likely to increase in the second half of next year however some predictions call for a rate hike as soon as June 2015.
During the week, credit card companies Visa (V, Financial) and American Express (AXP, Financial) showed strong gains for the DJIA with Visa up 13.09% and American Express up 4.11%. Meanwhile, the technology and financial sectors led the S&P 500. The S&P 500’s technology sector was up 3.29% for the week while the financial sector gained 3.20%.
Next week, third quarter earnings season nears its end with a few Dow Jones Industrial Average companies slated to report earnings during the week. October employment data will be a highlight for next week as the ADP private sector employment report gets released on Wednesday and the Bureau of Labor’s employment report gets released on Friday.
