FIRST REPUBLIC BANK equities and shares

The economic and earnings backdrop remains favorable to equities, with good news for manufacturing and housing. Industrial production rose 0.9% in October, quickly recovering from the hurricane-related disruptions and topping economists’ expectations. According to the U.S. Department of Commerce, Housing starts were better than expected in October, with overall housing starts up 13.7%. Starts were up in three of four regions, led by the Northeast and Midwest, suggesting that the recent strength was not just a reaction to the hurricanes. Third quarter earnings in the U.S. continued to come in above expectations. According to Bloomberg, 95% of companies in the S&P 500 have reported earnings and of those reporting, 73% beat consensus estimates. October Core CPI numbers showed a mild increase to 1.8% year over year, a bit ahead of expectations. However, other metrics show little signs of inflation and investors in the long term Treasury market expect inflation to remain very low, as seen in the decline in yields for the week.