- Retail sales saw a 1.7% increase in October from the prior month
- The Leading Economic Index rose 0.9% from the month prior in October
- U.S. companies have announced share buyback plans totaling $1.06 trillion since January
Top Three Market Headlines
Retail Sales Post Third Straight Monthly Rise: The U.S. Census Bureau reported last week that sales at retail and food service establishments advanced 1.7% in October from the prior month, the third straight monthly increase and the strongest gain since March 2021. Compared to the prior year, sales jumped 16.3%. On-line retailers observed the greatest increase in October, followed closely by gasoline stations and electronics and appliance stores. While on-going supply chain pressures have fueled concerns that consumer spending could be hindered in the latter months of the year, October's report evidenced continued strong demand for goods and services.
Leading Economic Indicators Point Towards More Growth: The Leading Economic Index (LEI) for the U.S. continued rising in October, gaining 0.9% over September's level, the fastest pace in three months. The LEI, published monthly by The Conference Board, is intended to signal shifts in the business cycle based on readings of various economic and financial indicators. Gains were widespread among the indicators measured, with only two of the ten components―the average workweek and consumer expectations―detracting from the overall gain. Based on recent trends in the LEI, The Conference Board forecasts U.S. economic growth remaining strong in the fourth quarter before leveling out in 2022.
Stock Buyback Plans on a Record Pace: Since the start of January, U.S. corporations have announced plans to spend $1.06 trillion repurchasing their own stock, on pace to eclipse 2018's record announcement of $1.11 trillion, according to data from Birinyi Associates and Bloomberg. The surge in buyback plans has occurred as businesses look to put record levels of cash to use. Share repurchases can play a key role in supporting stock prices, and strategists at Goldman Sachs expect corporations to be the largest source of U.S. equity demand in 2022.