The energy on Wall Street was quite tangible all morning long as investors across the world awaited the opening trades of Alibaba (BABA) – officially the largest IPO in history. It was priced at $68, but opened at over $97 per share. The net result is a market capitalization of over $228 billion on its first day of trading; that’s not too far off from Chevron’s (CVX) current market cap. Though Alibaba is huge, the biggest driver of the rally in the early hours was Scotland’s electorate rejecting the opportunity to become independent from the United Kingdom by a margin of 55% to 45%. The end result will be a drastic change in political powers across the UK in the next election, but for the time being, investors across the world are breathing a sigh of relief. As the day goes on, volatility is expected to continue due to “quadruple witching” – a quarterly phenomenon where four stock futures and options contracts expire today leading to frantic trading and wild market swings. In a nutshell: the indexes may be down, but it’s nothing to be overly concerned about. While not a major market mover, there is one economic release giving a comprehensive forecast on how the economy will fare going into year end.

The Conference Board’s index of leading economic indicators is a composite index of ten economic indicators that should lead overall economic activity. In the month of August, the index edged up only slightly by 0.2%, but the gain for July was revised sharply higher to 1.1% compared to the original reading of 0.9%. The trend of the index points to moderate economic growth for the rest of the year. The primary weakness was in building permits, which has been dragging the index down all year. Building permits dropped 5.6% in August (we comment on these yesterday) and August’s increase in unemployment claims was the second biggest negative in the report. Positive trends include the yield spread, which reflects the Fed's (still) stimulative policy, followed by the ISM's very strong new orders index posted earlier this month, and the credit component that continues to point to a rise in lending.

Ultimately, this report is a reminder that housing remains a rough spot for economy, as it has been for much of the last few years. In the end, we are slowly, but surely moving out of the hard times.