Mid Term Elections

Much has been made of the importance of the mid-term congressional elections as they relate to the stock markets. J.P Morgan recently released a study showing historical stock market returns by political party control. The three entities identified were; Senate/House/President. The combination that produced the best results were markets when the Senate and House were controlled by the Republicans, coupled with a Democrat president. The average annual return during those years was 15.3 percent. In second place were years in which there was a Republican Senate, a Democrat House and a Republican President. The S&P 500 averaged 10.5 percent during those years. The worst combinations were when all three entities were controlled by the same party, with all Democrat producing average annual gains of 5 percent and all Republicans coming in at 3.3 percent.

Home Are Selling - Believe it or Not

The real estate market is still holding strong since buyers are realizing that there are major opportunities in this market. As for sellers, many of them are pricing aggressively. They know that if they price right, homes are selling quickly. Just to give you a taste of what I mean, these are the numbers of single family homes that sold in the past year: Tewksbury - 195; Lowell - 382; Billerica - 247; Dracut - 220; Chelmsford - 241; Tyngsboro - 72; Westford - 184. Don't let anyone tell you that homes are not selling.

LAST Week in the News

According to the ICSC-Goldman Sachs index, retail sales rose 0.4% for the week ending September 25. On a year-over-year basis, retailers saw sales increase 3.6%, the best reading since early August.

The Standard & Poor's/Case-Shiller 20-city housing price index — on a seasonally adjusted basis — rose 0.6% in July after a 0.3% increase in June. On a year-over-year basis, prices rose 3.2% compared with July 2009.

The consumer confidence index fell to 48.5 in September from a downwardly revised 53.2 in August. The index was benchmarked at 100 in 1985, a year chosen because it was neither a peak nor a trough in consumer confidence.

The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending September 24 fell 0.8%. Refinancing applications fell 1.6%. Purchase volume increased 2.4%.

The Institute for Supply Management reported that the monthly composite index of manufacturing activity was 54.4 in September after reaching 56.3 in August. Economists had anticipated a reading of 54.5. A reading above 50 signals expansion. It was the 14th straight month of expansion.

Total construction spending rose 0.4% to $811.8 billion in August, following a downwardly revised 1.4% drop in July. Economists had anticipated a drop of 0.4% in August.

The Commerce Department reported that consumer spending rose $41.3 billion or 0.4% in August, matching what economists had anticipated. Personal income increased $59.3 billion or 0.5%.

Initial claims for unemployment benefits fell by 16,000 to 453,000 for the week ending September 25. Continuing claims for the week ending September 18 fell by 83,000 to 4.45 million.