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Five Things You Need to Know: Consumer Price Index, Monkey Climb on Fed's Back; Usage of Words "Plunge" and "Housing" In Same Headline Reaches 14-Year High; Intel; Apple; First Baby Boomer Applies for Social Security

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What you need to know (and what it means)!

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Minyanville's daily Five Things You Need to Know to stay ahead of the pack on Wall Street:

1. Consumer Price Index, Monkey Climb on Fed's Back

The Consumer Price Index did its part to keep the monkey on the Fed's back, rising slightly more than forecast in September.

  • The Labor Department reported that the headline CPI increased by 0.3%, largely reflecting higher energy and food costs.
  • Energy prices were higher for the first time in three months and food prices jumped by the largest amount since June.
  • Core inflation, which excludes energy and food, was up 0.2%, in line with expectations.
  • This is right in line with what Federal Reserve Chairman Ben Bernanke said in his speech to the Economic Club of New York on October 15, namely, that "the Committee noted some improvement over the past year in measures of the trend component of inflation, such as core inflation."
  • However, the energy and food components that are pressuring headline inflation are not going unnoticed, and increasingly the Fed is having to balance the recognition that "resource utilization" is the fly in their ointment of credit creation.
  • For perspective, below is a long-term chart of the Consumer Price Index from 1920.

    Click to Enlarge


2. Usage of Words "Plunge" and "Housing" In Same Headline Reaches 14-Year High

Copy editors in the U.S. associated the words "plunge" and "housing" in the same headline at their highest rate in 14-years, according to data reported this morning from all media everywhere.

  • The key driver in headline writers' ability to use "housing" and "plunge" together remains the Commerce Department's monthly Housing Starts report.
  • The Commerce Department said the number of new starts fell by 10.2% to 1.191 million homes, compared to forecasts for 1.285 million.
  • Building permits fell 7.3%, the sharpest decline since January 1995, and 30.8% below last year.


3. Intel Beats Estimates... for Layoffs

Intel (INTC) said yesterday afternoon that profit rose 43% thanks to demand for personal computers in Europe and Asia and forecast sales that beat analyst estimates.

  • Intel's revenue rose 15%, to $10.09 billion, higher than the company's initial outlook on Sep. 11, which raised revenue forecasts to a range of $9.4 billion to $9.8 billion, from $9 billion to $9.6 billion.
  • Oops! Sorry, about that. These "housing plunge" things keep popping up everywhere.
  • Andy D. Bryant, Intel's chief financial officer, said sales were strong across all categories and regions, and particularly strong in Europe and Asia.
  • The company's upbeat sales forecast for the fourth quarter countered concern that a slowing U.S. housing market could hurt consumer demand in the upcoming holiday shopping period, when sales of computers usually peak, Bloomberg happily noted.
  • Also exceeding estimates? Layoffs.
  • The company plans to lay off 2,000 more employees, exceeding previous estimates for job losses.
  • Since April 2006, the company has trimmed its workforce by about 14,500 people.


4. Apple Competing With Competition in Not Worrying About Competition

Apple (AAPL) announced that it's cutting the prices of songs it sells without copy
protection to 99 cents from $1.29.

  • The price cut, which began on Tuesday, puts the company's iTunes store closer in line with its rivals.
  • For example, Amazon (AMZN), which opened its own online music store in September, sells songs without anticopying software locks for 89 cents to 99 cents.
  • Stop it! Go away!
  • An Apple spokeswoman, Natalie Kerris, said the price cut at iTunes was not in response to competition, the New York Times reported, which raises the question, why not just make the songs free?


5. First Baby Boomer Applies for Social Security

The nation's "first" baby from the post World War II generation known as "Baby Boomers," applied for Social Security benefits this week, according to the Associated Press.

  • First in line? A retired school teacher from New Jersey, the AP said.
  • Kathleen Casey-Kirschling was born one second after midnight on Jan. 1, 1946, becoming the first Baby Boomer.
  • Now, that's enough!
  • Casey-Kirschling will be eligible for benefits after she turns 62 next year, the article said.
  • Social Security Commissioner Michael Astrue told the AP it is "America's silver tsunami."
  • Ironically, the generation that coined the phrase "Never trust anyone over 30," now understands what it feels like to "Never trust anyone under 30."
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No positions in stocks mentioned.

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