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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Cactus Jack who wrote (55729)	10/22/2002 2:46:21 PM
From: stockman_scott	Respond to of 65232

ECONOMY WATCH 1. HOUSING CONTINUES TO SURGE Housing starts rose by 13.3% in September, their highest monthly increase since July 1995. This brought the annual rate to 1.8 million new homes, its highest level since 1986. This reading beat expectations, and made up for a slower August. Any thoughts of a slowdown in housing should be put to rest, as this sector continues to drive the economy. 2. ADDING FUEL TO THE RED HOT HOUSING MARKET Fannie Mae (FNM, $72, up 7) and Freddie Mac (FRE, $63, up 5) are considering raising the limit on the size of the loans they purchase. The change is expected take effect in January 2003. This means that higher value loans would become "conventional," which allows a lot more property to be bought. The amount will be announced in November, but it is expected to rise to $325,000 from its current level of $300,000. 3. TRADE GAP SWELLS TO RECORD HIGH The U.S. trade deficit grew to $38.5 billion in August, reaching a new record high. Imports were up 2% to their highest levels since March 2001, to $120 billion. At the same time, exports decreased by 1.3% to $82 billion. Expectations were for a widening of the trade gap to $36 billion. This news is not promising as this is a lot cash going out of the country into foreign hands. Weaker dollar, here we come. 4. UNEMPLOYMENT BACK UP First time claims for unemployment benefits rose last week, in contrast to the previous week's fall. Jobless claims grew by 22,000 to 411,000. Economists predicted an increase, though total claims were expected to stay below 400,000. Just when jobless claims finally broke through the 400,000 mark and were heading in the right direction, the job market returned to its sour ways. And this is important because consumers need to earn income if they are going to spend it. 5. OCTOBER RETAIL SALES START OFF STRONG Retail sales for the first week of October were up 1.0% from the first week of September according to Redbook Research. The reading beat expectations of a 0.6% gain. The first week sales in October were also up 0.4% from the same period last year. This could be good news on consumer spending going into the holiday season. 6. BUT BUSINESSES RELUCTANT TO STOCK UP Business inventories fell for the first time in four months in August by 0.1% after a 0.4% rise in July. Wall Street had anticipated a rise of 0.2% for August. Businesses are reducing inventory because of fears of weak consumer spending. bull-market.com