Economy grows faster than expected. Costco sales rise and Twitter launches IPO.
US economy grew at higher than expected rate in Q3
According to the Associated Press, the US economy expanded at a 2.8 percent annual rate from July to September, a surprising sign of strength despite the 16-day partial government shutdown. Exports rose, home construction increased and state and local governments spent more. The outcome was nearly a full percentage point higher than most economists has predicted.
Twitter stock priced at $26 per share
The Wall Street Journal is reporting that Twitter has priced its IPO at $26 per share, valuing the company at $14.4 billion. It will be the biggest IPO since the Facebook debut last year. The deal will raise $2.1 billion for the company which remains unprofitable but which has transformed public discussion on subjects from politics to pets. The average one-day “pop” or price increase for US listed IPOs this year has been 17 percent. Six companies have doubled in price on their first day. Only 20 percent of Twitter shares will be available to retail purchasers compared to the 26 percent offered by Facebook.
ECB cuts rates
The European Central Bank has cut interest rates in response to falling inflation across the euro zone. The Financial Times reports that the central bank cut the main refinancing rate to 0.25 percent. The deposit rate, which it pays on lenders’ reserves, remains at 0. The rate at which banks borrow from the ECB was cut by 25 basis points to 0.75. The cut was largely unexpected but economists indicate that it was the right decision.
Jobless claims fall
Fewer Americans filed applications for unemployment benefits last week, according to USA Today. The number of initial claims for the week ending Nov. 2 dropped by 9,000 to 336,000. The four-week moving average fell to 348, 250. The jobless claims numbers have been volatile in the last two months due to a California backlog. The Labor Department will release its jobs report on Friday.
Costco sales rise 3 percent
Costco Wholesale Corp. said that comparable sales for the four-weeks ended Nov. 3 climbed 3 percent, ahead of the 2.6 percent estimate by analysts. Sales rose 4 percent in the US and 3 percent internationally. Excluding negative impacts from gasoline price deflation and foreign exchange, Fox Business reports that comparable sales climbed 6 percent, also better than the 4.1 percent predicted by analysts.
HealthCare.gov was warned that it could only handle 1100 users
Documents released by the House Oversight and Reform Committee indicated that the government was warned that the site could only handle 1100 users, the day before the launch of the HealthCare.gov site. Fox News reports that Health and Human Services Secretary Kathleen Sebelius acknowledged on Wednesday that the early enrollment figures for ObamaCare will be “very low” due to website problems.
Catherine S. McBreen is President of Millionaire Corner. McBreen plans and develops content for Millionaire Corner. Catherine balances editorial content to meet the informational needs of both new and seasoned investors. She designs special monthly surveys on topical issues affecting the economic environment.
McBreen has a B.S. in speech communications from Northwestern University and a J.D. from DePail University College of Law. She is a member of the American Bar Association, the Illinois Bar Association, and the Chicago Bar Association.
Well-known for her expertise in the affluent and retirement arenas, McBreen is a frequent speaker at industry conferences. She has been quoted widely by the financial media, including The Financial Times, The Wall Street Journal, Research, Private Asset Management, On Wall Street, Reuters, Bloomberg News, The Dow Jones Newswires and Worth. Cathy has appeared as a guest on CNBC Closing Bell, First Business Morning News, Neal Cavuto at Fox Business News, ABC and CBS radio.
McBreen is co-author with Spectrem President George H. Walper, Jr. of the book "Get Rich, Stay Rich, Pass It On: The Wealth-Accumulation Secrets of America's Richest Families" (Portfolio, January 2008)
Catherine is the mother of four and is involved in many school and community events.