Thursday, November 22, 2018 1:00 am
Cost of oil falls below $65 a barrel
FRANKFURT, Germany – Holiday shoppers should enjoy more spending power thanks to the recent sharp drop in oil prices, though cheaper energy could also weigh on the U.S. economy by dampening investment in shale oil production.
While the fall in oil prices doesn't yet match the 2014-16 slump to $26 per barrel, the current decline should soon make itself felt through the global economy.
The international crude benchmark, Brent, has fallen under $65 per barrel from a four-year high in early October over $86, and U.S. crude has dropped below $55 a barrel.
Retailers in the U.S., who depend on heavy Christmas spending, should see a boost as lower gasoline prices give consumers more spare cash to spend on gifts.
Manufactured goods orders dip sharply
Orders to U.S. factories for big-ticket manufactured goods fell by the largest amount in 15 months with a key category that tracks business investment showing weakness for the third consecutive month.
The Commerce Department said Wednesday that orders for durable goods dropped 4.4 percent last month. The October drop led by a huge decline in the volatile areas of commercial and military aircraft.
The slowdown has raised the specter that a widening trade war between the United States and China is causing U.S. companies to grow more cautious about committing resources to expand and modernize their operations.
Mortgage rate drop largest in 4 years
U.S. long-term mortgage rates recorded the biggest drop in nearly four years this week, but remain much higher than they were a year ago.
Mortgage giant Freddie Mac says the average rate on the benchmark 30-year, fixed-rate mortgage fell to 4.81 percent this week, down from 4.94 percent a week earlier. It was the biggest weekly drop since January 2015. But the 30-year rate was still up from 3.92 percent a year ago.
Home sales rise, end 6 months of decline
U.S. home sales rose in October, breaking a six-month losing streak. But sales are still down from a year ago, hurt by rising interest rates.
The National Association of Realtors said Wednesday that sales of existing homes climbed 1.4 percent to a seasonally adjusted annual rate of 5.22 million last month from 5.15 million in September.
But the October sales were still down 5.1 percent from a year earlier, the largest annual drop since July 2014.
“No way is the housing market on solid ground at the moment,” says Lawrence Yun, the association's chief economist.
Deere & Co. profits rise but miss hopes
A boost in construction equipment sales drove profit higher for Deere & Co. in the fourth quarter, but the results fell short of Wall Street expectations.
The weaker-than-expected results sent shares lower as the market opened, but the stock quickly recovered as the company stated an upbeat outlook for equipment demand.
The maker of agricultural and construction equipment reported a 46 percent boost in profit, to $784.8 million, or $2.42 per share. Earnings, adjusted for pretax gains, came to $2.30 per share, 14 cents short of industry analyst projections, according to a survey by Zacks Investment Research.