Weekly Quote
“Heroes are not known by the loftiness of their carriage; the greatest braggarts are generally the merest cowards.”
Weekly Tip
Think of making a three-pronged attack on future college expenses. Assets from a 529 plan or other form of college savings fund can be complemented by cash flow from parents and financial aid, scholarships or loans the student may apply for as the time comes.
RISING GAS PRICES KEY FACTOR IN INFLATION SPIKE
The federal government’s Consumer Price Index recorded a 0.5% inflation increase for July. Gasoline prices rose 4.7% during the month; food prices rose 0.4%. Core CPI advanced 0.2%. Producer prices rose as well – the Labor Department’s July Producer Price Index posted a 0.2% increase, with core PPI up 0.4%. Economists surveyed by Reuters had expected gains of just 0.2% in overall CPI and 0.1% in overall PPI for the month.1,2
EXISTING HOME SALES DECLINE IN JULY
The National Association of Realtors noted a 3.5% fall in residential resales for July. While the rate of existing home sales hit an 8-month low last month, sales in July were still up 21% from a year ago (the federal homebuying credit expired in July 2010). The median sale price was $174,400, down 4.4% from a year ago.3
$1,800 GOLD IS HERE; OIL MOVES LOWER
Gold settled at $1,852.20 per ounce on the COMEX Friday; the precious metal is on track for its best month in 12 years, and the gold bull market has now run for more than 1,000 days. Oil settled at $82.26 on the NYMEX Friday, wrapping up its fourth straight down week.4,5
GAINS IN INDUSTRIAL OUTPUT, LEADING INDICATORS
The Conference Board Leading Economic Index advanced 0.5% in July to follow an 0.3% rise in June and an 0.7% gain in May. Industrial output increased by 0.9% in July according to the Federal Reserve – the best month for that indicator since December. Auto production alone improved 5.2% for the month.6,7
STOCKS UNDER PRESSURE
The ongoing debt crisis in Europe, disappointing U.S. economic indicators and some subpar earnings reports all did some damage. So it was a negative week for the big Wall Street benchmarks: DJIA, -4.01% to 10,817.65; S&P 500, -4.69% to 1,123.53; NASDAQ, -6.62% to 2,341.84.8
THIS WEEK: Nothing major is scheduled out of Washington or the private sector for Monday. Tuesday, July new home sales figures come out and Heinz has 2Q results. Wednesday, we get news about July’s durable goods orders, plus earnings from Toll Brothers and TiVo. Thursday brings weekly jobless claims and earnings from Hormel. Friday, we have the second estimate of 2Q GDP and the final August consumer sentiment survey from the University of Michigan; Federal Reserve chairman Ben Bernanke will also speak at the Fed’s Jackson Hole, WY symposium.
| % CHANGE |
Y-T-D |
1-YR CHG |
5-YR AVG |
10-YR AVG |
|
DJIA |
-6.56 |
+5.32 |
-0.99 |
+0.48 |
|
NASDAQ |
-11.72 |
+7.48 |
+1.64 |
+2.45 |
|
S&P 500 |
-10.66 |
+4.45 |
-2.75 |
-0.41 |
|
REAL YIELD |
8/19 RATE |
1 YR AGO |
5 YRS AGO |
10 YRS AGO |
|
10 YR TIPS |
0.02% |
1.02% |
2.26% |
3.50% |
Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 8/19/116,9,10,11
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
Citations. 1 - forbes.com/sites/afontevecchia/2011/08/18/cpi-jumps-stoking-fears-of-stagflation/ [8/18/11] 2 - reuters.com/article/2011/08/17/businesspro-us-usa-markets-tips-idUSTRE77G2TS20110817 [8/17/11] 3 - marketwatch.com/story/sales-of-existing-homes-fall-35-in-july-2011-08-18-1011410 [8/18/11] 4 - cnbc.com/id/44197669 [8/19/11] 5 - cnbc.com/id/44197671 [8/19/11] 6 - conference-board.org/data/bcicountry.cfm?cid=1 [8/19/11] 7 - reuters.com/article/2011/08/16/usa-economy-idUSN1E77F0B620110816 [8/16/11] 8 - cnbc.com/id/44202341 [8/19/11] 9 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F19%2F10&x=0&y=0 [8/19/11] 9 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F19%2F10&x=10&y=18 [8/19/11] 9 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F19%2F10&x=0&y=0 [8/19/11] 9 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F18%2F06&x=0&y=0 [8/19/11] 9 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F18%2F06&x=0&y=0 [8/19/11] 9 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F18%2F06&x=0&y=0 [8/19/11] 9 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F20%2F01&x=0&y=0 [8/19/11] 9 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F120%2F01&x=0&y=0 [8/19/11] 9 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F20%2F01&x=0&y=0 [8/19/11] 10 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/19/11] 10 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/19/11] 11 - treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01] 12 - montoyaregistry.com/Financial-Market.aspx?financial-market=the-financial-security-rulebook-5-crucial-steps&category=3 [8/20/11]
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