Financial and Economic Brief - October 17, 2017by © Liberty Publishing, Inc.
Bright Outlook for Economy
Federal Reserve Chair Janet Yellen, in speaking to an international banking seminar, said she had a bright outlook for the U.S. economy and for inflation forecasts in the coming months. Her comments suggested that the Fed will soon resume raising interest rates. Most economists foresee the next rate hike coming in December. Yellen recognized “the persistence” of low inflation this year, but she said she expected inflation to start picking up. “Economic activity in the United States has been growing moderately so far this year, and the labor market has continued to strengthen,” Yellen said.
Tesla Model 3 Production Slows
According to reports, Tesla dismissed several hundred workers because the company is off to a slow start in manufacturing its Model 3 electric car. The firings come as Tesla is hoping to quickly expand production of its new mass-market Model 3. CEO Elon Musk had said the company would be making 5,000 cars per week by the end of 2017, but that goal appears to be at risk. Musk acknowledged that the company was facing “bottlenecks” in production. He said Tesla was “diverting resources” to clear up production challenges.
Indexes Hit Records
Wall Street indexes hit records at the open on Monday on gains in financial and technology stocks even as investors awaited earnings reports this week. Apple gained 1.05%, providing the biggest increase to the Nasdaq and the S&P after KeyBanc upgraded the stock to “overweight”. Financial stocks gained for the first time in four days, led by bank stocks. “The market still wants to be optimistic, it wants to continue to move higher from here,” said Robert Pavlik, chief market strategist at Boston Private Wealth. “It seems to be the trend recently that companies report good earnings and the market sells them off a little bit, taking it as an opportunity to lock in profits. But it’s not something that should worry long term investors.”