The US economy grew faster than expected in this year’s third quarter, according to this morning’s “advance” GDP estimate for the July-through-September period. Economic activity expanded 3.5% in Q3, the Bureau of Economic Analysis reports — comfortably above the consensus forecast’s 3.0% estimate, according to Econoday.com’s survey. Meanwhile, today’s weekly update on jobless claims continues to signal ongoing growth for the labor market. The numbers du jour aren’t terribly surprising if you’ve been following the macro updates recently, but the news is no less encouraging for anticipating that moderate growth for the US will persevere for the foreseeable future.
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It’s nearly Halloween, but the frightening rise in US stock market volatility earlier this month is looking less creepy at the moment. In particular, the Volatility Index (VIX) for the S&P 500 has tumbled substantially over the past week, settling at a level yesterday (Oct. 29) that prevailed before the sharp correction took a hefty bite out of equities in the first half of October. The descent in risk is a bullish sign, but it comes with caveats. Indeed, other measures of market volatility have yet to confirm the VIX’s drop. As a result, it’s premature to say that October’s menacing volatility signal was a false alarm about the potential for an extended run of the market’s horror show .
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● NATO Tracks Large-Scale Russia Air Activity in Europe | Wall Street Journal
Russian military aircraft conducted aerial maneuvers around Europe this week on a scale seldom seen since the end of the Cold War, prompting NATO jets to scramble in another sign of how raw East-West relations have grown.
● Fed’s Bond Buying Ends–Rates Could Stay Low for Years | Street.com
Six years after the Federal Reserve rode to the rescue during the financial crisis, the central bank is ending its bond-buying program in October.
● German Unemployment Unexpectedly Falls | Bloomberg
German unemployment unexpectedly declined in October in a sign of companies’ confidence in the underlying strength of Europe’s largest economy.
● Spanish economy grows for 5th quarter in a row | BusinessWeek
Spain’s economy grew by 0.5 percent in the third quarter compared with the previous three months, its fifth consecutive quarterly growth.
● US loan applications to buy homes lowest since Feb | Reuters
U.S. mortgage applications to buy homes fell to their lowest level last week since February as interest rates on 30-year home loans edged up from the previous week’s 16-month trough, an industry group said on Wednesday.

If you’re pondering the allure of real estate investment trusts (REITs) these days, consider two attributes of late: strong performance vs. the US stock market and relatively high yields over Treasuries. As winning combinations go among asset classes at the moment, US REITs cast an attractive profile.
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● US factory orders unexpectedly drop for 2nd straight month | LA Times
Orders for durable goods, a key indicator of manufacturing activity, unexpectedly dropped in September for the second straight month in a potentially troubling sign for the U.S. economy.
● Wall Street eyes Fed’s next move as QE winds down | USA Today
Quantitative easing, the policy experiment the Federal Reserve hatched during the financial crisis, is expected to be phased out by the Fed Wednesday when it concludes its two-day meeting.
● Consumer confidence jumps in October | Reuters
US consumer confidence rose in October to its highest level since October 2007 as views on the job market improved, according to a private sector report released on Tuesday.
● World Bank: China Needs Reform, Not Growth Targets | AP
China’s growth could decline to close to 7 percent next year but Beijing should focus on overhauling its economy instead of trying to stick to official growth targets, the World Bank said Wednesday.
● US home-price growth continues to slow | HousingWire
Home-price growth continues to slow, according to the latest S&P/Case-Shiller Home Price Indices for August 2014.
● The narrowing of global imbalances | VOX
Global current-account imbalances narrowed substantially over the past eight years. As a result, the systemic risks associated with these imbalances have decreased.

The Federal Reserve is expected to formally announce the end of QE3 in tomorrow’s FOMC monetary statement. But as quantitative easing (buying assets with newly printed money) fades into the sunset, the trend in inflation expectations is moving in the wrong direction: down.
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● Seeking Unity, U.S. Revises Ebola Monitoring Rules | NY Times
The federal government on Monday tried to take charge of an increasingly acrimonious national debate over how to treat people in contact with Ebola patients by announcing guidelines that stopped short of tough measures in New York and New Jersey and were carefully devised, officials said, not to harm the effort to recruit badly needed medical workers to West Africa.
● Sweden’s central bank cuts benchmark rate to zero | MarketWatch
Sweden’s central bank cut its main interest rate to zero Tuesday, in a bid to boost inflation which has once again fallen below expectations.
● Italy Oct business confidence rises unexpectedly | Reuters
Morale among Italian manufacturers rose unexpectedly strongly in October, reversing four months of straight declines, data showed on Tuesday.
● ECB Praet: Risk of Deflation in Eurozone ‘Limited’ | MNI
European Central Bank Executive Board member Peter Praet said Tuesday that the risk of deflation in the Eurozone remained limited and that he expected the economy to avoid slipping into recession.
● Oil extends losses over weak price outlook | AFP
Oil moved lower in Asian trade Tuesday after Goldman Sachs slashed its price forecasts for the next two years owing to a global supply glut.

The recent surge in US stock market volatility has rattled nerves and inspired some analysts to announce that a new bear market has arrived. The warning has resonated a bit deeper in some circles with the sight of the S&P 500 falling below its 200-day moving average earlier this month. The bearish view can’t be ruled out entirely, of course, but the latest stumble in stock prices looks like a temporary bout of anxiety rather than a start of an extended decline. Why? A key factor for this outlook is the economic trend, which continues to provide a bullish tailwind. Not surprisingly, an econometric test for bear-market signals in US stocks continues to show minimal signs of danger.
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The US economy is on track to expand at a substantially slower pace in the third quarter vs. Q2, according to The Capital Spectator’s median econometric nowcast. Today’s revised GDP estimate for this year’s July-through-September period anticipates an increase of 2.6% (real seasonally adjusted rate). That’s well below the 4.6% increase in the previous quarter, according to the Q2 report published by the Bureau of Economic Analysis (BEA) in late-September.
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● Bank stress test relief lifts European assets | Reuters
European stocks, low-rated government bonds and the single currency all rose on Monday as financial markets gave a tentative thumbs-up to euro zone bank health checks.
● German Business Confidence Falters Again in October | Wall St Journal
The closely watched lead indicator from the Ifo Institute fell to 103.2 after 104.7 in the previous month. This marked the sixth straight decline in the lead indicator.
● Rousseff reelected president of Brazil | RT
Brazil’s leftist president Dilma Rousseff has been re-elected for another term with over 51 percent of the vote in a tight presidential run-off on Sunday.
● As Ebola Spreads, Asia Senses Vulnerability | NY Times
Governments and doctors around Asia are now much more worried that the region’s densely populated cities and towns could be vulnerable if infected people start flying here from Africa.
● Goldman slashes 2015 oil price forecast | Reuters
Goldman Sachs has slashed its 2015 oil price forecasts, making it the most bearish among major financial institutions, following a near 25 percent fall in crude prices over the past five months.