Economic indications have been strengthening going into QE2 (Nov 3, 2010), gains
reflected by two strong back-to-back 0.5 percent gains for the
Conference Board's index of leading economic indicators (September
revised from plus 0.3 percent). A wide yield spread continues to be the
biggest positive though to a smaller degree given declines underway in
long rates, declines triggered and furthered by QE2. A rise in money
supply, also related to QE2, is an increasingly significant plus.
Another central positive is the factory workweek, strength that is
likely to continue given the uplift underway in the manufacturing
sector.
Other readings in today's report include a 0.1 percent
uptick in the coincident index, a small gain that follows two unchanged
readings in a reminder of the economy's mid-year soft patch and the
contrasting acceleration now underway.