Weekly Economic Update September 26, 2011

WEEKLY QUOTE “We should have a great fewer disputes in the world if words were taken for what they are, the signs of our ideas only, and not for things themselves.”– John Locke   WEEKLY TIP Have an elderly parent who is on too many mailing lists – and spending or giving away too much money as a result? Consider adding your parent’s name to the Do Not Mail list at Direct­mail.com .   WEEKLY RIDDLE I can’t be seen, but I’m all around. I have no mouth, yet can make a sound. I can be harnessed, but never bound. No hands have I, yet I move the ground. What am I?   Last week’s riddle: You have 9 seemingly identical cubes before you. You are told that one is heavier than the other eight. Using a two-pan balance scale only twice, how can you pick out the heaviest cube?   Last week’s answer: Divide the 9 cubes into 3 groups of 3. Weigh two groups. This way, you can find out which group has the heavier cube in it. Choose 2 cubes from this group and compare their weights. By deduction, you will determine the heaviest cube.	September 26, 2011   INVESTORS SEEK CASH, WATCH POLICY MOVES Stocks tumbled last week as Wall Street shrugged off news of the Federal Reserve’s move to direct $400 billion into longer-term Treasuries and wondered if Europe’s debt troubles might trigger a recession. At mid-week, the Federal Reserve and International Monetary Fund managing director Christine LaGarde both noted “downside risks” to the U.S. and world economies. Thursday night, finance ministers and central bank governors from the Group of 20 pledged they would make a “strong and coordinated international response to address the renewed challenges facing the global economy” – a welcome declaration, yet the S&P 500 still slipped more than 6% on the week.1,2,3 EXISTING Home Sales UP 7.7% in AUGUST This was a pleasant surprise. The National Association of Realtors also noted an 18.6% year-over-year improvement in residential resales. Housing starts were also up 3.2% last month, according to a Census Bureau report.4,5 conference board LEADING INDICATORS RISE The global research group said its index rose 0.3% last month. However, a sizable part of that gain was due to a rise in M2 money supply – Americans boosting their bank accounts and cash positions.6 BLEAK WEEK FOR GOLD & CRUDE Commodities took a beating last week as the dollar strengthened. Gold lost 9.64% last week (and $101.70 on Friday) to end the trading week at $1,637.50 an ounce. Oil fell 9.45% last week, with futures settling at $79.85 per barrel Friday.7 CONFIDENCE TAKES A HOLIDAY Buyers were scarce last week on Wall Street, as these weekly performances point out: S&P 500, -6.54% to 1,136.43; NASDAQ, -5.30% to 2,483.23; DJIA, -6.41% to 10,771.48.3 THIS WEEK: Monday, the Census Bureau releases new home sales figures for August. Tuesday, the July S&P/Case-Shiller home price index comes out, plus the Conference Board’s September consumer confidence index; Walgreens issues an earnings report. Wednesday brings a look at August durable goods orders. On Thursday, we have a new report on pending home sales and new initial claims figures; Germany’s parliament also votes on expanding the Eurozone bailout fund. On Friday, we get the Commerce Department’s report on August consumer spending and the University of Michigan’s final September consumer sentiment survey. % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA -6.96 +1.02 -1.28 +2.52 NASDAQ -6.39 +6.71 +2.38 +6.56 S&P 500 -9.64 +1.03 -2.71 +1.33 REAL YIELD 9/23 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS 0.10% 0.77% 2.27% 3.50% Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 9/23/113,8,9,10 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list.
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 – sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/09/22/bloomberg_articlesLRXZ2L0D9L35.DTL [9/22/11]2 – online.wsj.com/article/BT-CO-20110923-710372.html [9/23/11]3 – cnbc.com/id/44638902 [9/23/11]4 – realtor.org/press_room/news_releases/2011/09/ehs_aug [9/21/11]5 – census.gov/const/newresconst.pdf/ [9/20/11]6 – thestreet.com/story/11256620/1/leading-indicators-show-no-signs-of-recession.html [9/22/11] 7 – blogs.wsj.com/marketbeat/2011/09/23/data-points-energy-metals-522/ [9/23/11] 8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F23%2F10&x=0&y=0 [9/23/11] 8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F23F2%2F10&x=10&y=18 [9/23/11] 8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F23%2F10&x=0&y=0 [9/23/11] 8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F22%2F06&x=0&y=0 [9/23/11] 8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F22%2F06&x=0&y=0 [9/23/11] 8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F22%2F06&x=0&y=0 [9/23/11] 8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F24%2F01&x=0&y=0 [9/23/11] 8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F24%2F01&x=0&y=0 [9/23/11] 8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F24%2F01&x=0&y=0 [9/23/11] 9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/23/11] 9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/23/11] 10 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01] 11 – montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [9/23/11]

Weekly Economic Update September 19, 2011

WEEKLY QUOTE-“When you come to the end of your rope, tie a knot and hang on.”– Franklin Delano Roosevelt

WEEKLY TIP-Consolidating your banking and money management accounts at one institution could mean fewer or lower banking fees, and maybe some perks as well.

WEEKLY RIDDLE-You have 9 seemingly identical cubes before you. You are told that one is heavier than the other eight. Using a two-pan balance scale only twice, how can you pick out the heaviest cube?

 

 

September 19, 2011

 

CPI, PPI TELL DIFFERENT STORIES
According to the Bureau of Labor Statistics, the Consumer Price Index rose 0.4% in August – and annualized inflation came in at 3.8%, the highest rate in nearly three years. Annualized core inflation was +2.0% given a 0.2% rise in core CPI last month. On the other hand, producer prices showed the smallest annual gain since March: in August, they were up 6.5% year-over-year, compared to a 7.3% differential in May. The overall Producer Price Index was flat last month; core PPI went +0.1%.1,2

RETAIL SALES UNCHANGED FOR AUGUST

U.S. retail sales were flat last month, and that news from the Commerce Department wasn’t surprising in light of the recent pressures on household spending. This comes after (revised) gains of 0.2% in June and 0.3% in July.3

CONSUMERS FEEL A BIT MORE OPTIMISTIC

The University of Michigan’s initial September consumer sentiment survey showed some improvement: it came in at 57.8, up from the troublingly low 55.7 final August reading. Economists polled by Dow Jones Newswires had expected a rise to 57.0.4

GOLD DROPS, oil ADVANCES

Gold futures went -2.39% last week, part of a 3.29% two-week decline. The precious metal settled at $1,812.1o an ounce on the COMEX Friday. NYMEX crude closed at $87.96 a barrel Friday, going +0.83% last week and +6.93% in the last four weeks.5

CENTRAL BANK PLEDGE GIVES STOCKS A LIFT
Thursday, the Federal Reserve and four other central banks stated they would offer 3-month dollar loans to European commercial lenders to help them address any 4Q dollar liquidity problems. This aided a rally: U.S. stocks rose each day last week. The S&P 500 had its best week since late June (+5.35%), settling at 1,216.01 Friday. The NASDAQ (+6.25% to 2,622.31) and the Dow (+4.70% to 11,509.09) also climbed.6,7

THIS WEEK: Monday, markets will be poised to respond to the weekend efforts of Eurozone finance ministers (and Treasury Secretary Timothy Geithner) to craft possible solutions to the EU’s sovereign debt problems; also, Lennar issues earnings. Tuesday, we get data on August housing starts and results from Adobe, ConAgra and Oracle. Wednesday, the Fed’s September policy meeting wraps up, and August existing home sales figures and earnings from General Mills arrive. On Thursday, Nike, FedEx, Discover, Cintas and CarMax issue results; new initial claims figures come in along with September’s Conference Board LEI index. KB Home announces earnings on Friday.

 

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	-0.59	+8.63	-0.09	+2.91
NASDAQ	-1.15	+13.85	+3.46	+6.60
S&P 500	-3.31	+8.12	-1.57	+1.71
REAL YIELD	9/16 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.13%	1.00%	2.38%	3.50%

 

Sources: online.wsj.com, usatoday.com, bigcharts.com, treasury.gov, treasurydirect.gov – 9/16/118,9,10,11

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

 

Last week’s riddle:
Last week’s answer:

Two in every corner, one in every room, none in a house. What is it?

Last week’s answer:

The letter R.

 

 

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 – latimesblogs.latimes.com/money_co/2011/09/inflation-cpi-food-energy-core-fed-economy-stimulus-qe-bond-yields-.html [9/15/11]

2 – news.briefing.com/investor/analysis/story-stocks/ppi–august-2011.htm [9/14/11]

3 – nytimes.com/2011/09/15/business/economy/retail-sales-and-producer-prices-unchanged-in-august.html [9/14/11]

4 – news.morningstar.com/all/dow-jones/us-markets/201109161035/000389/us-consumer-sentiment-improves-slightly.aspx [9/16/11]

5 – blogs.wsj.com/marketbeat/2011/09/16/data-points-energy-metals-520/ [9/16/11]

6 – blogs.wsj.com/marketbeat/2011/09/16/data-points-u-s-markets-51/ [9/16/11]

7 – cnbc.com/id/44532917/ [9/15/11]

8 – usatoday.com/money/index [9/16/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F16%2F10&x=0&y=0 [9/16/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F16F2%2F10&x=10&y=18 [9/16/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F16%2F10&x=0&y=0 [9/16/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F15%2F06&x=0&y=0 [9/16/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F15%2F06&x=0&y=0 [9/16/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F15%2F06&x=0&y=0 [9/16/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F17%2F01&x=0&y=0 [9/16/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F17%2F01&x=0&y=0 [9/16/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F17%2F01&x=0&y=0 [9/16/11]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/16/11]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/16/11]

11 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]

12 – montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [9/16/11]

 

 

WEEKLY ECONOMIC UPDATE SEPTEMBER 13, 2011

 WEEKLY QUOTE

“Three o’clock is always too late or too early for anything you want to do.”– Jean-Paul Sartre

WEEKLY TIP

While well-meaning friends and family members may offer “advice” about your personal finances and the stock market, remember that they may lack the education and perspective of a financial services professional.

WEEKLY RIDDLE

Two in every corner, one in every room, none in a house. What is it?

 WILL CONGRESS PASS THE $447 BILLION JOBS PLAN?

Thursday, President Obama challenged Congress to swiftly approve the American Jobs Act – a plan that would cut the payroll tax for workers and businesses to 3.1% in 2012 and offer tax credits as large as $4,000 to companies hiring people out of work for more than 6 months. If passed, the AJA would also pour about $80 billion into public works projects and extend long-term jobless benefits. A written response from House Speaker John Boehner (R-OH) and three other key Republican leaders noted that the plan will be quickly considered, but cited a need to “find common ground” and an assumption that the bill was not “an all-or-nothing proposition.”1,2

ISM SERVICES INDEX TOPS FORECASTS Economists polled by Bloomberg News thought that the Institute for Supply Management’s non-manufacturing index would fall to 51.o in August. Instead, it bettered the 52.7 reading from July. The 53.3 August reading indicates some expansion in the industries that account for roughly 90% of the economy.3

 BEIGE BOOK REPORTS TEPID OVERALL GROWTH The latest Federal Reserve review of 12 U.S. economic regions noted expansion “at a modest pace, though some districts noted mixed or weakening activity.” Five regions reported some growth in July and August. Analysts wonder if this latest Beige Book is one more factor that could prompt the Fed to ease monetary policy.4

 RECORD LOW YIELD FOR THE 10-YEAR NOTE The benchmark Treasury yield decreased to 1.89% last Thursday, the lowest yield ever recorded by the Federal Reserve. The yield closed at 1.92% Friday.5,6

 STOCKS ALTERNATELY SOAR, SWOON Rumors of an imminent default in Greece thwarted any weekly gain for U.S. stocks. The S&P 500 finished the week at 1,154.23, while the NASDAQ and DJIA respectively ended the week at 2,467.99 and 10,992.13. As of Friday, the Dow had traded in a triple-digit range in 19 of the past 24 market days.7

 THIS WEEK: No notable U.S. economic releases are scheduled for Monday. Tuesday, Best Buy releases an earnings report. Wednesday, the August PPI comes out along with Census Bureau reports on August retail sales and July business inventories. Thursday, the August CPI arrives, plus a look at August industrial output, new figures on initial jobless claims and results from Research in Motion; Fed chairman Ben Bernanke speaks briefly in the nation’s capital. Friday brings the initial September consumer sentiment index from the University of Michigan.

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	-5.06	+5.54	-0.70	+1.44
NASDAQ	-6.97	+10.37	+2.79	+4.56
S&P 500	-8.22	+4.53	-2.23	+0.56
REAL YIELD	9/9 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	-0.03%	1.05%	2.35%	3.50%

Sources: cnbc.com, usatoday.com, bigcharts.com, treasury.gov, treasurydirect.gov – 9/9/117,8,9,10,11,12

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends. Please feel free to forward this article to family, friends or colleagues.

If you would like us to add them to our distribution list, please reply with their address.

We will contact them first and request their permission to add them to our list.

Last week’s riddle:

It weighs nothing, but when you put it into any container it makes the container lighter. What is it?

 Last week’s answer:

A hole.

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 - money.msn.com/business-news/article.aspx?feed=AP&date=20110909&id=14243169 [9/9/11]

2 - latimes.com/news/politics/la-pn-house-jobs-plan-20110909,0,2297315.story [9/9/11]

3 - bloomberg.com/news/2011-09-06/u-s-ism-services-index-increased-in-august.html [9/6/11]

4 - chicagotribune.com/business/breaking/chi-fed-beige-book-shows-modest-growth-in-july-20110907,0,5899012.story [9/7/11]

5 - bloomberg.com/news/2011-09-09/treasuries-decline-after-obama-speech.html [9/9/11]

6 - blogs.wsj.com/marketbeat/2011/09/09/ten-year-treasury-yields-close-at-fresh-60-year-low/ [9/9/11]

7 - cnbc.com/id/44451511 [9/9/11]

8 - usatoday.com/money/index [9/9/11]

9 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F9%2F10&x=0&y=0 [9/9/11]

9 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%9F2%2F10&x=10&y=18 [9/9/11]

9 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F9%2F10&x=0&y=0 [9/9/11]

9 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F8%2F06&x=0&y=0 [9/9/11]

9 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F8%2F06&x=0&y=0 [9/9/11]

9 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F8%2F06&x=0&y=0 [9/9/11]

9 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F10%2F01&x=0&y=0 [9/9/11]

9 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F10%2F01&x=0&y=0 [9/9/11]

9 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F10%2F01&x=0&y=0 [9/9/11]

10 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/9/11]

10 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/9/11]

11 - treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]

12 - montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [9/9/11]

Weekly Economic Update September 5, 2011

Phillip Statler  Presents:
WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE “Friendship either finds or makes equals.” – Publilius Syrus     WEEKLY TIP If you are divorcing and will have joint custody of your children, clarify who will claim them as dependents on a federal return. If you both claim the same dependents, it might be a red flag for the IRS.   WEEKLY RIDDLE It weighs nothing, but when you put it into any container it makes the container lighter. What is it?   Last week’s riddle: In a drawer are 6 pairs of red socks, 4 pairs of white socks and 5 pairs of blue socks. In total darkness, how many socks would you have to grab to be certain you had a matching pair?   Last week’s answer: You would have to grab 4 socks – 4 is the maximum number you’d need to pull to insure you had at least 2 socks that matched. (Don’t believe it? Give it a try!)	September 5, 2011   NO JOB GAINS IN AUGUST In August, nonfarm payroll employment totaled 131.1 million – as it did in July. The Labor Department measured no job growth in the economy for the first time since September 2010. Additionally, employers reduced the average work week slightly to 34.2 hours. The unemployment rate remained at 9.1% last month.1 CONSUMER SPENDING IMPROVES BY 0.8% This hugely encouraging July figure from the Commerce Department trounced forecasts and represented the best month for the statistic since February. Personal incomes improved by 0.3% in July; the personal savings rate hit a four-month low.2 PENDING HOME SALES DOWN, HOME PRICeS UP The National Association of Realtors announced pending home sales had declined by 1.3% in July following three months of gains. The number of sales contracts was still 14.4% better than a year before. July’s Case-Shiller Home Price Index was notable for indicating a 3.6% 2Q gain in home prices, though the index was still down 5.9% year-over-year.2,3,4 MANUFACTURERS SIGNAL MINOR EXPANSION The Institute for Supply Management’s August purchasing manufacturers index ticked down to 50.6 from July’s 50.9 mark. So the sector is growing, but not by much (50 is the line between expansion and contraction). The new orders sub-index improved 0.4% to 49.6.5 STOCKS GIVE BACK SOME GAINS While the NASDAQ managed a 0.02% advance last week to settle at 2,480.33 on Friday, the S&P 500 and Dow had minor weekly losses. The DJIA retreated 0.39% to a Friday close of 11,240.26, and the S&P pulled back 0.24% to settle Friday at 1,173.97. Gold futures gained 4.43% on the week – prices jumped $47.70 on Friday alone.6,7 THIS WEEK: U.S. markets are closed for Labor Day. On Tuesday, ISM releases its August service sector index and Pep Boys issues earnings. Wednesday, the Fed puts out a new Beige Book and we have an earnings report from Hovnanian. Thursday promises to be interesting: the Bank of England and European Central Bank will each conclude policy meetings, Fed chief Ben Bernanke speaks in Minneapolis, President Obama addresses the nation on jobs and the economy, and of course new initial claims figures come out. Friday, we have earnings from Kroger. % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA -2.91 +8.92 -0.39 +1.24 NASDAQ -6.50 +12.74 +2.62 +4.01 S&P 500 -6.65 +7.69 -2.09 +0.36 REAL YIELD 9/2 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS 0.00% 1.05% 2.25% 3.50% Sources: cnbc.com, usatoday.com, bigcharts.com, treasury.gov, treasurydirect.gov – 9/2/116,8,9,10 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 – latimes.com/business/la-fiw-jobs-20110903,0,2844276.story [9/2/11] 2 – nj.com/business/index.ssf/2011/08/consumer_spending_climbs_more.html [8/29/11] 3 – realtor.org/press_room/news_releases/2011/08/phs_july [8/29/11] 4 – blogs.wsj.com/economics/2011/08/30/vital-signs-home-prices-remain-low/ [8/30/11] 5 – ism.ws/ISMReport/MfgROB.cfm [9/1/11] 6 – blogs.wsj.com/marketbeat/2011/09/02/data-points-u-s-markets-47/ [9/2/11] 7 – blogs.wsj.com/marketbeat/2011/09/02/data-points-energy-metals-518/ [9/2/11] 8 – usatoday.com/money/index [9/2/11] 9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F2%2F10&x=0&y=0 [9/2/11] 9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F2%2F10&x=10&y=18 [9/2/11] 9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F2%2F10&x=0&y=0 [9/2/11] 9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F1%2F06&x=0&y=0 [9/2/11] 9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F1%2F06&x=0&y=0 [9/2/11] 9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F1%2F06&x=0&y=0 [9/2/11] 9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F4%2F01&x=0&y=0 [9/2/11] 9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F4%2F01&x=0&y=0 [9/2/11] 9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F4%2F01&x=0&y=0 [9/2/11] 10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/2/11] 10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/2/11] 11 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]

WEEKLY ECONOMIC UPDATE

August 29,2011

Weekly Quote

“The greatest discovery of my generation is that human beings can alter their lives by altering their attitudes.”- Lee Iacocca

Weekly Tip

Take a look at your withholding. It might be wise to adjust it before the end of the year, especially if you make estimated tax payments (and even if you don’t).

Weekly Riddle

In a drawer are six pairs of red socks, four pairs of white socks and five pairs of blue socks. In total darkness, how many socks would you have to grab to be certain you had a matching pair?

Could September Bring Another Stimulus?

Could we see a QE3? Maybe. While Federal Reserve Chairman Ben Bernanke made no mention of a plan to aid the economy at last week’s Fed symposium in Wyoming, he did refer to “a range of tools that could be used to provide additional monetary stimulus” and noted that the Fed “will continue to consider those and other pertinent issues… at our meeting in September.” September’s FOMC meeting has now been lengthened to 2 days; make of that what you will. Bernanke said he expects improved GDP in the second half of 2011 and core inflation under 2%.1

New Home Sales Decline, But Home Prices Go Up

The Census Bureau announced a 0.7% drop in new home sales in July; sales were up 6.8% from a year ago. The average sale price was $272,300, with 6.6 months of inventory on the market. Overall U.S. home prices rose 0.9% in June, said the Federal Housing Finance Agency (the best 1-month gain since September 2005).2,3

Suprise! Durable Goods Order Rise 4.0%

July figures from the Commerce Department far outpaced forecasts. Economists surveyed by Bloomberg News had expected a 2.0% increase. July saw an 11.5% gain orders for autos and auto parts – the biggest 1-month jump in demand since January 2003 – and a 43.4% leap in orders for commercial aircraft. Even with transportation orders factored out, orders for hard goods rose 0.7% last month.3

Consumers Perceive Tough Times

The final August Thomson Reuters/University of Michigan consumer sentiment survey came in at 55.7 – a bit of a rebound from the initial, abysmal 54.9 mark for the month. It is a long way from the high 80s (which is where the index routinely was before the Great Recession).4

Best Week For Stocks Since June

Gold futures retreated, 2Q GDP was revised down to 1.0%, and stocks rallied. The 3 major Wall Street indices snapped 4-week losing streaks as follows: DJIA, +4.32% to 11,284.54; S&P 500, +4.74% to 1,176.80; NASDAQ, +5.89% to 2,479.85.4,5

THIS WEEK: Monday, the numbers come out on July consumer spending, and we also get a report on June pending home sales. Tuesday offers June’s Case-Shiller home price index and the Conference Board’s August snapshot of consumer confidence. July factory orders data comes out on Wednesday. In addition to weekly jobless claims figures, Thursday brings ISM’s August manufacturing index. On Friday morning, the July unemployment report is released.

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	-2.53	+13.01	+0.000009	+0.87
NASDAQ	-6.52	+17.05	+3.17	+2.97
S&P 500	-6.43	+12.37	-1.83	-0.0002
REAL YIELD	8/26 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.12%	0.95%	2.24%	3.50%

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov - 8/26/115,6,7,8 Indices are unmanaged, 
do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

Please feel free to forward this article to family, friends or colleagues.

If you would like us to add them to our distribution list, please reply with their address.

We will contact them first and request their permission to add them to our list.

 

 

 

 

 

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 - cnbc.com/id/44286314 [8/26/11]
2 - census.gov/const/newressales.pdf [8/23/11]
3 - bloomberg.com/news/2011-08-24/orders-for-durable-goods-in-u-s-increase-4-twice-as-much-as-estimated.html [8/24/11]
4 - businessweek.com/news/2011-08-26/u-s-michigan-consumer-sentiment-index-slumped-in-august.html [8/25/11]
5 - cnbc.com/id/44285944 [8/26/11]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F26%2F10&x=0&y=0 [8/26/11]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F26%2F10&x=10&y=18 [8/26/11]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F26%2F10&x=0&y=0 [8/26/11]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F25%2F06&x=0&y=0 [8/26/11]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F25%2F06&x=0&y=0 [8/26/11]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F25%2F06&x=0&y=0 [8/26/11]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F27%2F01&x=0&y=0 [8/26/11]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F127%2F01&x=0&y=0 [8/26/11]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F27%2F01&x=0&y=0 [8/26/11]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/26/11]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/26/11]
8 - treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]
9 - montoyaregistry.com/Financial-Market.aspx?financial-market=wealth-planning-using-the-stretch-ira-strategy&category=4 [8/28/11]