SECURITY ANALYSIS TERM PAPER 1

SECURITY ANALYSIS TERM PAPER

Andrew PiconeProfessor Mulugetta

12/7/14Section: 9:25am

Table of Contents

I. Introduction…………………………………………………………………………3-4

II. Macroeconomic Outlook……………………………………………………………4-6

III. Security Selection………………………………………………………………….6-16

IV. Comparative Performance………………………………………………………………………16-17

V. Conclusion: Recommendations, Summary, & Future……………………………17-19

VI. Appendixes……………………………………………………………………….20-27

VII. References……………………………………………………………………………28

Introduction

The purpose of this assignment is to invest in securities in the market as a bottom-up strategist

over the timeline of 78 days in the goal of increasing the initial capital of $1 million more than

the competitors. The trading transaction began on September 15th and ended on December 2nd,

with Professor Abraham Mulugetta acting as the broker charging a stated of commission of .001

for both the purchase and sale of the security at the time of the transaction. To create a more

realistic trading scenario, students were only allowed to trade during the times the market was

open; Monday-Friday (excluding holidays) and during the times of 9:30am- 4:30pm. In addition,

the bid and ask price reflected during the transaction had to be calculated using “real-time”

which could only be done using the Bloomberg terminal or Eikon within the trading room.

Before I begin a more descriptive analysis of my portfolio I would like to give a brief overview

of my position prior to entering the game and the strategies I chose to use throughout the course

of it. Coming into the class I had little knowledge of securities and how the process of

purchasing them worked. In fact, just picking up finance as a concentration this was my first

class involved with securities other than Business Finance where we learned of them from a

more general perspective. When we were told to makes trades I had no idea where to begin,

which stocks to choose, or even which stocks were out there other than the big companies I had

previously heard of. Communicating with classmates and receiving some help I was able to gain

a little more knowledge of how the system worked. For example, previously I had never heard of

“shorting” and it was a perplexing concept to me on how you could sell a stock you did not own.

I accepted the fact that I would most likely be behind from the rest of the class who had already

taken finance classes before or had prior knowledge of stocks coming in. After a week of not

making any trades I decided to finally enter the market and see what happened. Because we were

not using real money I figured I had nothing to lose and there was no better way to learn than

picking a stock and seeing what happened, reading up on news and looking at company data, and

using that to better my knowledge for future transactions. So, to start off my trades I decided to

purchase stock in both Apple and Boeing, which I will address further in my analysis.

Macroeconomic Outlook

We began our trading back in early September of this year where a variety of events around the

world impacted the economic situation nationwide and thus impacted the decisions I made

throughout my trades, anticipating the market’s reaction. Entering the market, the economy was

pretty stable adding over 248,000 jobs during the month (later reported to be higher than

271,000) beating what economists were predicting; and also experiencing a decline in the

unemployment rate, dropping from 6.1% to 5.9% (marking the first time it had dropped below

6% since the recession. (Forbes, 2014). To add onto consumer confidence during this period, the

US economy expanded much higher than anticipated in the 3rd quarter. “GDP in fact, grew at a

3.5% annualized rate in the 3 months ending in September after a 4.6% gain in the second

quarter, marking the strongest back-to-back readings since 2003” (Stilwell, 2014). With growth

in the market increasing, especially in three major fields: business services, construction, and

health care it seemed a good time overall in the economy to make some moves within these

markets as consumer confidence would be increasing and thus consumers would be prone to

spend more.

On the other side of things, there were numerous other factors in the world occurring that would

have to be taken into consideration when making trades during this particular time period. The

big ones of course were, an inflating dollar, the outbreak of Ebola, declining oil prices, and the

Fed’s decision to keep interest rates constant. The first of which directly affects consumer

spending habits; inflation. As the price of goods increased and inflation remained relatively

stable over the past 12 months, 1.7%, consumers were paying more for goods such as groceries

which held potential for impacting their spending habits (US Inflation in September Rises,

2014).

In addition during this time, the price of oil and thus the price of gasoline has been steadily

declining, allowing consumers to have more spending power in this category and also allowing

large manufacturers such as those involved with planes to potentially save money. Over the last 3

months the price of gas has dropped on average to about 75 cents nationwide. The main reasons

being international events such as the crisis in the Ukraine as well as continuing issue within the

Middle East (Kennedy, 2014). To add to this production within the US and other oil producing

countries like Libya has been increasing leading to a high supply that brings down the

price/barrel.

From more of a crisis standpoint, the obvious macro factor during this time which has affected

the health industry is the Ebola Outbreak. Due to recent law, under President Barrack Obama, the

Affordable Health Care Act provides an opportunity for citizens of any level of income to

receive insurance regardless of their financial situation and health conditions. With that being

said, since it’s most recent epidemic, Ebola cases became apparent in West Africa as several

deaths followed and then made its way over to the United States via transportation of patients to

locations such as Dallas and Maryland where well known hospitals are located. The spread of

this horrific disease created fear around the world, and a boom in health care research was

created specifically in regards to treating patients. Because of this outbreak stocks in such related

industries became a huge investment opportunity.

The last major factor within the US that would play a large macroeconomic role in investing

during this 78 day holding period was with regards to the decisions made by the Fed. Following

a recession in 2008, the Federal Reserve implemented an asset purchase plan: purchasing

trillions of dollars in bonds in the goal of reviving the American economy (NY Times, 2014).

Along with this plan, the Federal Reserve decided to implement a monetary policy strategy of

keeping short-term interest rates close to zero (0-1/4%) while also lowering long-term interest

rates to support the US economy. In the month of October, they then made the decision to

remove the previous asset plan due to an increasing economy (FRB, 2014). Because of this a

debate on what to do with interest rates came about with anticipation that rates would rise. Yet

due to the report of jobless claims significantly dropping and GPP increasing, they retreated from

this and decided to keep interest rates where they currently were and continue to support the

boosting economy.

Security Selection

Boeing (BA)

When first beginning our trading game on September 15th, 2014 I was cautious to making any

immediate trades since I had little experience prior to the course and was unfamiliar with

successful companies out there that would be beneficial to invest in. On 9/25/14I made the

decision to finally make my first security transaction and I figured Boeing would be the best bet,

purchasing it at $128.09/share. Boeing is an aerospace company that manufactures commercial

jetliners and defense, space and security systems. As a large cap company Boeing seemed to be

safe opportunity for me to start my investment. Looking at the company information advertised

via Yahoo Finance I was able to find that Boeing at the time was reporting the highest revenue

and growth in the last 3 years, while appearing to be continually growing.

In addition, I was impressed with the companies EPS. Over the last two quarters Boeing had

surprised the market by underestimating its EPS. For example, during the 2nd quarter earnings

were anticipated at $2.02/share yet were delivered at $2.42 (Yahoo Finance). I expected the

company to continue this progress throughout the duration of our trading period. With all this

past information it seemed to be a solid company to invest in but what really drove my decision

was what I found through company headlines. The company was preparing a variety of big

orders in September, including an order with “Kuwait to purchase 10 Boeing 777 passenger jets

that would amount to approximately $3.2B. In addition Ethiopian Airlines had just made an

order at the time for 20 737 MAX 8’s totaling $2.1B (Yahoo Finance). Because of these orders I

expected sales to increase; at the same time I believed that falling oil prices would help the

company decrease their costs and thus have an overall positive effect on the stock price in the

future. I held onto this stock all throughout the duration of our holding period and the stock

proved to be very stable although unfortunately the return was not as great as I had hoped. I

ended up collecting a gain on my 1000 shares, of $3,649.91 after commissions, selling the stock

at $132/share.

Apple Inc. (AAPL)

The second stock I decided to purchase throughout this game I knew much more about and felt

confident overall in its purchase due to the growth the company has seen over the years. Apple is

a company that designs, manufactures, and markets mobile communication and media devices,

personal computers, portable digital music players, and sells a variety of related software to

consumers. I decided to originally purchase only 750 shares of this company due to two major

contributions within the company. The first of course being the addition of the IPhone 6. After a

week on the market alone over $6 million in sales had been generated and I anticipated that trend

to continue as it surpassed its competition.

The second interesting factor, was the acquisition of Apple to purchase Beats Headphones.

Becoming the biggest acquisition of Apple analysts were expressing hypothesis regarding the

intentions of this acquisition; specifically that Apple would attempt to integrate this sound

quality into the ITunes software under its own brand image (Yahoo Finance). Purchasing stock

in the company at $100.40 I quickly decided to purchase additional shares after a “controversial”

report written from renowned analyst Carl Icahn stated how the stock is way undervalued and is

being sold on the market for half the price it is worth. In fact, he highly recommended that the

company repurchase shares and attempt to change the price and resell them on the market

(Yahoo Finance). The moment I read this news I knew that I had to seize the opportunity to

purchase additional share before the stock jumped way up or before Apple decided to repurchase

stock and sell it at a higher price. Of course as expected the stock began to sky rocket up until the

time I sold it for $115.55/share; becoming the largest profit in my portfolio of $25,734.19 while

also having the highest HPR: 14.82% (68.43% annualized).

eBay Inc. (EBAY)

eBay, a company that provides an online market places for the sale of goods and services to both

individuals and businesses. This transaction proved to be one of two losses I incurred early on in

my portfolio. Originally I decided to purchase the stock for $56.29/share because of their

decision back in September to split from their PayPal subsidiary. After seeing the stock jump

$4/share over the weekend I got excited and thought this process would continue as investors

would see this split as an opportunity for both companies to go their separate ways and even

potentially look for new mergers. Despite the initial jump in the stock price I was incorrect.

Following the market opening back up after the weekend the stock declined instantly. I followed

the company anticipating that it was just following the market but even as the major indexes did

well eBay still declined. After 2 weeks of holding this stock I decided to get rid of it and cut my

losses early selling it at a price of $52.26/share and a loss of $3139.55.

Walmart (WMT)

One of my better transactions throughout this portfolio came from Wal-Mart Stores Inc., the

notorious chain retailer around the world who sells goods such as groceries, apparel, home good,

and electronics. Obviously a well-known company this decision seemed to be a good one

especially with the holiday seasons approaching. With that being said however, the reason I

made this decision was actually due to company’s decision to become a part of the Health Care

Industry. The company announced early October that they were teaming up with “Direct Health”

to allow health care signups for employees as well as customers. With Obamacare being required

by all citizens and often there being some difficulty for customer selecting an appropriate policy

to their needs I thought this would be a great opportunity for consumers to reach out to the local

retail store the already shop at and sign up. Purchasing 1000 shares at $77.41 the company

proved to be successful and I ended up selling it for $86.10/share which was one of the better

securities in my portfolio.

Becton Dickson & Co. (BDX)

Becton Dickson & Company is a global medical technology company engaged in the

development, manufacture, and sale of medical devices used by healthcare institutions. Back in

early October I decided to purchase this company due to a recent decision of the company to

purchase CareFusion Corp. who is a medical technology company specializing in offering

products that focus on medication management and infection prevention for $12.2B (Miliard,

2014). This merger created one of the world’s largest medication management and patient safety

companies. During a time where Ebola was a huge scare and leading to a number of instances

and the medical industry in general was booming, this seemed to be an appropriate acquisition.

Although missing the immediate jump of $8/share following the merge I was able to scoop the

stock at a price of $128.50. As a result of the merge, previous CareFusion shareholders were

receiving $49 in cash along with 0.0777 of Becton shares for each share that they held. I

assumed that with this news update, the cash received would be reinvested into BDX to purchase

additional shares which would lead to an increase in the stock price.

In addition BDX had already proved to be pretty successful generating a revenue of 2.2B in their

previous quarter and having a beta close to the market at 1.11 (Wall Street Journal).

Unfortunately I miss timed this stock by a bit and was only able to sell it at $129.70/share for a

small profit due to only slight fluctuations in the price.

PepsiCo. (PEP)

PepsiCo markets, sells and distributes a wide variety of convenient and enjoyable foods and

beverages with its most well-known product being Pepsi. I decided to purchase this stock at an

ask price of $94.47/share due to reported 3rd quarter earnings being much and revenue being

much higher than what had been forecasted; specifically due to Frito-Lays success. In total, its

revenue was reported to be 2% higher ($17.2B) compared to last year’s 3rd quarter, net income

was reported up 5% from the previous period ($2B) and EPS beat the market consensus by 7

cents ($1.37).

In the same report, headlines stated that PepsiCo expected EPS to continue to grow in the year by

9% and the company plans on returning a total of $8.7 billion to shareholders among which, $3.7

billion will be from dividends (Yahoo Finance). The remaining $5 billion the company plans to

return through repurchase of shares which I anticipate will lead to the company revaluing their

stock as they later issue shares outstanding again on the market. Throughout the course of this

investing period, PepsiCo proved to increase pretty smoothly for me with the exception of one

dip back in mid-October. I decided to however stick with the stock through to the end, and it

rebounded, increasing to a final price which I sold at for $100.10.

Amazon (AMZN)

I decided to take a long term position on Amazon, the leader in the Catalog & Mail Order

Industry by purchasing 300 shares at an ask price of $311.18. Amazon.com Inc. provides online

retail shopping services to consumers nationwide. Consistently over the past 3 years as revealed

on the companies income statements, both revenue and gross profit has increased which shows

growth. In October, Amazon announced a few interesting statements that I believed would aid to

their increase in sales and lead to a higher stock price. The first was that Amazon Prime

Members would have 30 minutes of early access to “Lightning Deals” as they prepare for the

holiday season. I anticipated based on this announcement for there to be a large volume of sales

within this period of time that should boost the stock price immediately.

In addition, the company announced that they planned to open their first retail store which

would be used for pickup orders, delivery of large orders and also as a location to display

products such as the Kindle (Yahoo Finance). I thought that this was an interesting strategy and

could potentially increase their market share to those who tend to stay away from online

purchases. With that being said my strategy for this transaction was to buy low and sell high

quickly, anticipating the stock to be overvalued shortly and then return back to its market price. I

ended up holding the stock for only 10 days and selling it right around its peak at $313.72/share

for a marginal gain right before it dropped down to $287/share. Unfortunately the stock made a

huge turnaround and jumped back up shortly after towards $340/share.

Helmerich & Payne (HP)

HP was my biggest mistake during the trading experience as I incurred the biggest loss in my

portfolio, totaling $5,461.20. Helmerich & Payne is an energy-oriented company engaged in the

contract drilling of oil and gas wells for exploration and production companies. This security was

the first with which I decided to take a short position on. In early October HP announced the

decision to split into two separate companies, HP and HPQ in the hope that it would be in the

best interest for both entities. At the time I was shaky on making this decision especially since it

was my first time taking a short position and I was curious how it would play out. After

monitoring the company for over a week the stock in both companies seemed to be plummeting

at a steady rate, dropping to a total of $10/share over this time. With this trend being constant it

seemed like a great opportunity to take advantage and collect a profit as the stock continued to

decline. Unfortunately I could not have been more wrong.

During the two week period I held onto this stock it ended up doing just the opposite I had

anticipated. The moment I made the decision to short the stock, the stock took a turn and started

to increase rapidly. Within a week the price was up to $90/share. Holding onto hope more than

logic I held the share longer trusting it would decline. Finally coming back down to $82.14/share

I decided to cut my losses and purchase back the stock before it came back up again. Had I had

been more confident in my original belief and shorted following the decision rather than waiting

a week I could have made the right choice and it would have worked for my benefit. On the other

hand, had I been more patient, I could have waited as the stock jumped down as expected, and is

currently trading around $62/share.

Ford Motor Co. (F)

My second and final position of shorting was with Ford Motor Company. Ford is an American

company engaged in the manufacturing and distribution of automobiles. My decision to take a

short position with this company was an easy one due to its consistent price over the past five

years and the fact that it was a cheap purchase. Reading up on the company I found that Ford had

been struggling over the past year in terms of sales, specifically abroad. Profits over 2015 were

expected to fall widely short of Wall Street expectations, whom anticipated between $10 and

$11billion while Ford only estimated between $8.5B and $9.5B. In addition, Ford anticipated

profits for the current year to fall short by another $2B ($8B$6B). After announcing that the

company would release its 3rd quarter earning prior to Friday 10/24 I decided that this would be a

perfect opportunity to sell high and wait for the company stuck to decline as investors react.

Selling short at a bid price of $14.26 for 5000 shares I was able to gain a safe small profit of

$1459 quickly as the stock jumped down to $13.96 when I repurchased it.

Chipotle Mexican Grill (CMG)

Chipotle Mexican Grill is a fast food fresh Mexican food restaurant located throughout the US as

well as some international markets. I purchased this stock at $613.14/share as I saw a huge

opportunity to gain a large profit. After reaching a level of $653/share on 10/17 the stock

plummeted to $608/share following the report of the companies poor recent 3rd quarter results. I

believe that the market overreacted drastically to the news and the stock became way

undervalued, posing as a great chance to buy low and sell high. Looking at Chipotle’s report in

more detail I was able to digest some knowledge that investors might have overlooked. Although

costs have increased for the company throughout the year due to the rising price of avocados the

overall revenue of the company was able to increase because higher prices were being charged

for guacamole (31.1% increase from the previous quarter in 2013). In addition, net income

steadily rose and proved to be strong as Chipotle continues to expand and plans on opening

between 190-205 new restaurants in the upcoming year (Yahoo Finance).

Each year Chipotle’s investment activity has been increasing which has contributed to the high

costs the company has faced but overtime these investments should pay off as higher volume of

sales come through. For this reason, because the stock is pretty volatile I wanted to keep my risk

minimal and buy low and sell as soon as I saw a peak occurring. I held the stock for a week and

took a solid profit of $15,051.18 selling the stock at $644.50/share. This transaction was one of

my better decisions and this strategy proved to be a beneficial asset in increasing the overall

value of my portfolio

Hanesbrands Inc. (HBI)

Hanesbrand’s is a consumer goods company engaged in designing, manufacturing, sourcing and

selling men’s and women’s basic apparel. Conversing with a friend who knew the owner of this

company he stated that the company was very stable since it’s IPO. Further looking into the

company the price of the stock seemed to be exponentially increasing at a highly correlated rate

over time and seemed like a safe investment opportunity to take advantage of. Over the past

week in the middle of October, prior to researching the stock, the company had already increased

$10/share. Further researching the company I found that analysts predicted the stock to rise

between $117/share and $125/share (Yahoo Finance). Getting set to releases their 3rd quarter

report I believed the results would be very good and investor confidence would increase

drastically, reflecting an increase in the price. Purchasing 500 shares at $109.72 I held onto this

stock for a little over a month with slight fluctuations in the price but overall positive results. At

the end I was able to sell at $113/share for a gain I was highly confident I would receive despite

it being smaller than I would have liked.

MasterCard Inc. (MA)

The final security I decided to purchase in my portfolio was MasterCard, a technology company

engaged in the global payments industry allowing consumers to make electronic forms of

payments. Credit card companies in general tend to do well as the consumer purchasing power

and consumer confidence increases. At the end of October the US 3rd quarter GDP was released

and was much higher than expected, coming in at 3.5% compared to an anticipated 3% (Stilwell,

2014). At the time I believed that the market would react and consumers would be more prone to

spend more or at least investors would believe that this would be so. Both MasterCard and Visa

have already increased drastically following the news and this trend should continue. With a beta

of 1.04, the stock should follow indexes such as the S&P 500 very closely making it a safe

investment over this time period as the economy is doing well. Purchasing the stock a little late

at $80.64/share I was able to make a gain when selling at $84.15.

Comparative Performance

Overall my portfolio did not do as well as I would have liked but I am satisfied to the extent that

I was able to make a profit from the money we had to invest. Due to some technical issues at the

beginning of the semester I was unable to properly budget the $1M we had to invest and when

approaching the deadline to meet 8 trades, I ended up going over this number substantially. The

total amount that I ended up spending reached a total of $1,448,379. So, as a way to make up for

this mistake I was penalized by the broker (Professor Mulugetta) with a cost of borrowing of 5%

for the extra amount, which dwindled by profits and HPR. Prior to the cost of borrowing I

generated a realized gain of $58,601.93 with an HPR of 4.05% and an annual HPR of 18.7%.

However, do to the 5% charge my actual gain was only $36,182.98 with an HPR of 2.50% and

annualized to be 11.53%.

Using Yahoo Finance again I was able to compare my portfolio results to the major stock

indexes. Looking at the S&P 500 index, they generated an HPR of 2.94% during this time which

was annualized to be 13.57%. With my commission charge I followed this index pretty closely

despite coming up a little short, however if no commission was charged I would have slightly

beaten the index. The NASDAQ Composite Index on the other hand came through during this

period of time with an HPR of 4.91% and an annualized HPR of 22.66% which beat my

portfolio. And lastly the Dow Jones Industrial Average came through with an HPR of 4.82%,

annualized to be 22.25%, also beating my results during this time. Overall, despite my results

being disappointing on a personal level, it seems that I did average compared to the major

indexes throughout the economy during this time.

ConclusionRecommendationsMy only advice to enhance this learning experience for future students would be to send out an

email over the summer about the trading game and provide some sources for students to research

companies and market data on as well as tips for what they should be looking for. The summer is

a great opportunity to conduct research and I know personally that I would have felt much more

comfortable coming into the class having some knowledge and experience with trading. Coming

off this I would also recommend taking the first few classes to provide some basic information

for trading and some strategies and explain what we should be collecting as we make each

transaction. Other than that I thought the information we went over through current events via

“The Wall Street Journal” was very informative and beneficial for both the project and real life

knowledge.

To future students taking this course: I recommend that you do your research prior to taking the

class, stay up to date with world news, research some companies, read books on investing and

gather as much basic information as you can. When taking the class just be sure to stay on top of

your trades, the market changes quickly and there is always company news that can affect the

price of a stock at any moment.

SummaryComing into this project I felt I held a disadvantage as far as knowledge and experience went

compared to the majority of the class but I was up for the challenge. Easing my way into the

trading process from a safe standpoint rather than being risky I slowly began to gain learn from

my experiences, both mistakes and successes throughout the course of this game. Through these

experiences as the period of trading progressed, I improved drastically and began to develop

better strategies that proved to be more effective and led to numerous gains. Over the duration of

this product I think I learned a variety of lessons that I wish I could take back but will definitely

remember in future experiences.

The first lesson I felt was important was that generally you should follow your gut. In a lot of my

trades I knew exactly what was going to happen and yet was afraid of making a haste decision

until I saw proof of this. For this reason, I missed the timing in the majority of my securities and

gained only small sums when I could have gained substantial ones. The other lesson I took away

from this was that I need to be willing to take more risks and manage the amount of stock I

purchase more efficiently. Throughout the trading game I generally purchased the same number

of shares, typically around 1000 shares. Instead I should have been more precise, purchasing less

shares in stocks I was unsure of and put more of my volume in stocks I felt more certain of such

as Apple, Walmart and MasterCard.

The final lesson I learned is one of the most crucial, and I didn’t understand its concept until the

end which prevented my profits from becoming much larger. When deciding to purchase stocks

and sell them, or short them and the buy-back I generally had a good sense of timing for what

was going to happen in the market. What I should have done was played the market by playing

both sides when it went up and down. For example, with both Chipotle and Amazon I knew

exactly when the stock was going to increase and when it was going to decrease. Instead of

closing out my position however, I should have done the opposite and taken the other side,

playing devil’s advocate and gaining a profit all throughout the holding period. Had I done this

my profits could have easily quadrupled. Overall, it was a great experience, all things considered

and I definitely gained a great deal of knowledge that I will take with me moving forward.

FutureFollowing the results of this trading game I thought this was a beneficial experience. It definitely

makes the concept less stressful and easier to take risks when you are managing fake money

rather than your own which I know will lead to different and most likely less risky strategies in

the future. Moving forward, I think I have gained knowledge with the basics of investing and the

strategies that I would like to use as they seemed to be effective. I don’t think I am ready to

create a widespread portfolio yet with my own money however, I do plan to pick a few stocks

that I will invest in next semester with real money. Some being long term that can be reliable and

others, such as penny stocks that are cheap to purchase and will have less risk in losing large

amounts of money, but high potential for growth. Utilizing resources such as The Wall Street

Journal, Yahoo Finance, Bloomberg, Eikon, etc. throughout the trading game, I plan to use these

same sources in the future. Creating another fake portfolio, choosing stocks I believe I can

utilizing these resources again for research in order to gain more experience with trading

securities and become more comfortable in my decisions moving forward.

Appendixes

March 2014 – September 2014 Consumer Prices – Gains & Losses in

Percent

 Mar 2014

Apr 2014

May 2014

June 2014

July 2014

Aug 2014

Sept 2014

12 Month

All items 0.2 0.3 0.4 0.3 0.1 -0.2 0.1 1.7

  Food 0.4 0.4 0.5 0.1 0.4 0.2 0.3 3.0

    Food at home 0.5 0.4 0.7 .0 0.4 0.2 0.3 3.2

    Food away from home 0.3 0.3 0.2 0.2 0.3 0.2 0.3 2.7

  Energy -0.1 0.3 0.9 1.6 -0.3 -2.6 -0.7 -0.6

    Energy commodities -2.0 1.9 0.6 3.0 -0.3 -3.9 -1.1 -3.3

      Gasoline (all types) -1.7 2.3 0.7 3.3 -0.3 -4.1 -1.0 -3.6

      Fuel oil -2.9 -3.0 -1.4 -1.7 -0.7 -1.2 -2.1 -3.2

    Energy services 2.6 -1.9 1.4 -0.4 -0.4 -0.6 -0.2 3.5

      Electricity 1.1 -2.6 2.3 0.2 -0.3 0.1 -0.7 2.8

      Utility (piped) gas service 7.5 0.3 -1.7 -2.6 -0.4 -2.8 1.6 5.8

  All items less food, 0.2 0.2 0.3 0.1 0.1 .0 0.1 1.7

energy

    Commodities less food, energy .0 0.1 0.1 0.1 .0 -0.1 .0 -0.3

      New vehicles .0 0.3 0.2 -0.3 0.3 0.2 .0 0.3

      Used cars and trucks 0.4 0.5 -0.1 -0.4 -0.3 -0.3 -0.1 -0.4

      Apparel 0.3 .0 0.3 0.5 0.2 -0.2 .0 0.5

      Medical care -0.3 0.3 0.5 0.7 0.3 -0.1 0.5 2.9

    Services less energy 0.3 0.3 0.3 0.1 0.1 .0 0.2 2.4

      Shelter 0.3 0.2 0.3 0.2 0.3 0.2 0.3 3.0

      Transportation 0.2 0.7 1.0 0.1 -0.7 -0.6 0.1 1.4

      Medical care 0.3 0.3 0.3 .0 0.1 .0 0.1 1.7

References

Jobs Report: US Added 248,000 Jobs in September, Unemployment Down to 5.9%. (2014, October 3). Forbes. http://www.forbes.com/

US Inflation in September Rises. (2014, October 22). US Inflation Calculator

Historical Price Charts. (2014). GasBuddy http://www.gasbuddy.com/

Kennedy, B. (2014, September 25). Why gas prices could drop below $3 a gallon. Money Watch. http://www.marketwatch.com/

Yahoo Finance - Business Finance, Stock Market, Quotes, News.Stilwell, V. (2014, October 30). U.S. Economy Up 3.5% in 3rd Quarter, Capping Best 6 Months in Over a Decade.  http://finance.yahoo.com/

Bloomberg. http://www.bloomberg.com/

Applebaum, B. (2014). Federal Reserve Caps its Bond Purchases; Focus Turns to Interest Rates. NY Times. http://www.nytimes.com/

FRB: Why are interest rates being kept at a low level? (2014, October 1).

The Wall Street Journal-Dow Jones & Company http://online.wsj.com/home-page

Miliard, M. (2014, October 7). CareFusion to be bought by BD for $12.2B. Healthcare IT News