Economic news was mixed this past week. Nonfarm productivity expanded at a healthy pace in the third quarter. But in a weak economy, strong productivity means that job growth may be stagnant for a while longer. Factory orders fell in September, but managed to post a gain for the quarter. Nevertheless, the manufacturing recovery is feeble in light of the two-year drop in factory orders.

The Fed obviously decided that they should get ahead of the curve instead of behind it when they announced a shocking 50 basis point reduction in the federal funds rate on Wednesday (Nov. 6). Though it will take some time to wind through the economy, the cheap rates should help increase corporate borrowing. It is unclear whether the Fed rate cuts will help consumer borrowing since market rates haven't changed very much.