Markets higher despite economic concerns! Upbeat earnings for the third quarter by the key companies amid concerns for sub-prime mortages, and rising oli prices saw very volatile stock markets. In the end, stock markets closed higher for the week. Stocks rose on the positive earnings news by companies like Apple (AAPL), Dupont (DD), Merck (MRK) and American Express (AXP). Stock market went higher despite fears that continuing credit crisis, banking sector problems, record high oil prices, and sliding dollar may slow down the economic growth. The S&P500 gained 37 points, the Dow gained 285 points and the NASDAQ gained 98 points for the week ending October 26th, 2007.
Housing market continues to decline. In September, existing home sales fell by 8% to a new low of 5.04 million homes per year. Experts were expecting the home sale rate to be closer to 5.25 million homes per year. Home prices also declined 4.2% in September from their year-ago levels. Buying a home is the biggest purchase people make in their lives, usually by taking a big loan, called mortgage. Buying a house means making a long term commitment (from 15 years to 30 years) to make mortgage payments. Existing and new home sales numbers are very important, because people buy homes when they feel confident about their future, jobs, and the economy so as to make mortgage payments. As number of home sales increase, sales of appliances, home building material, and jobs go up.
Oil prices continue to set record over $90 a barrel. Experts believe that Iran-US political tensions, winter heating oil needs, and weak US dollar could create a situation where oil supply will not meet the oil demand. As we have talked about in our previous newsletters, the weak US dollar makes things (such as oil) more expensive to import. High oil prices could impact the economy because higher oil prices make products, services, and travelling more expensive. We plan to watch the oil prices closely.

Professor's Corner
Starting this week, we are adding a reputed business professor to our team who will write on key topics. Enjoy!
Dollar slide continues We noted in earlier newsletters that the US dollar had become weaker in the past few weeks. At this time, one Canadian dollar is worth 1.04 US dollar, and one Euro is worth 1.44 US dollar. The weakening of American dollar against Canadian dollar is especially remarkable, given that for most of the last two decades, one Canadian dollar was worth less than one US dollar. At one time, in early nineties, the Canadian dollar had fallen so low, that it was worth about 67 American cents. What is the impact of weakening US dollar? First of all, for US residents, imports will become costlier. So if you want to buy a bottle of Canadian Maple Syrup, you will have to pay more in US dollars, even though the cost of the syrup in Canadian dollars has not gone up. Imported cars will cost more. It also means that US residents will find it more expensive to travel abroad. Since US imports oil, the cost of oil is likely to go up leading to over increase in prices and higher inflation. The second impact is on foreigners. They will find US produced items cheaper to buy. So if a European wants to buy Saturn car that is made in US, he/she will have to pay less money now than before. Foreigners will find it cheaper to visit US, because the cost of a hotel room, air fare, museum fee, etc., will be less now, when converted into their own currency, for example, in Canadian dollars or Euros. On the upside, all this can have beneficial impact in the short run on the US economy as US producers will be able to sell more goods. US will also benefit from tourists visiting , because these tourists will contribute to revenue of American hotels, restaurants, museums, etc.

Learn more about... What is Credit History? Why is it important to have a good credit history? Volume 12. Does it pay to study hard? Volume 17. What is Currency and Foreign Currency Exchange rate? Volume 14. What is stronger or weaker currency? Volume 20. What is Economy, Business, Workers, Goods, Services, Stock, DOW, S&P500, and NASDAQ in Volume 16. How does money grow in a bank? Volume 21. How to read stock information? Volume 25.

October 22-26, 2007

Weekly Stock Market

Bull Market-Stocks up!

Index

Change

Last

DOW

Up 285

13,807

S&P500

Up 37

1,535

NASDAQ

Up 98

2,777

**Foreign Exchange Rate**

**($1 is equal to)**
Currency	Change	Last
Euro (€)	-0.01	0.69
Yen (¥)	-0.30	114.23
Pound (£)	0.00	0.49
Yuan ()	-0.02	7.49
Rupee (Rs.)	-0.38	39.33
Canadian (C$)	-0.01	0.96

**Your Favorite Stocks**
Company	Bought one stock in Jan-07	This week stock is?	Your gain or loss?
	$34.20	$34.38	$0.18
	$49.89	$54.44	$4.55
	$43.87	$58.47	$14.60

We use multiple information resources, such as, websites, companies, stock exchanges, newspapers, and others.