Philly Fed and Leading Indicators Offer Upside

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We have two separate reports showing mixed signals on the economic growth front. The Federal Reserve Bank of Philadelphia released its October Business Outlook Survey. This is the "Philly Fed," according to Wall St. We have also seen the "Leading Indicators" from the Conference Board at the same time.

The Philly Fed showed that general activity returned to positive levels, but also that new orders and shipments recorded levels near zero with a continued decline in employment and hours worked. Indicators for the firms' expectations over the next six months remained positive. The report came in at 5.7 for October, up from -1.9 a month ago and well above the 0.5 consensus from Bloomberg. This was the first positive reading since April.

Today's leading indicators was for September and rose to 0.6%, up from -0.1% the prior month and above the Bloomberg consensus of 0.2%. This actually was higher than all economists were calling for. We would caution that by the time the leading indicators get reported much of the formal data and components already have been seen. In short, those leading indicators are not quite as leading as the name suggests.

Equities are still mixed but we have seen a pop in S&P and DJIA index futures since the reports hit.

JON C. OGG

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