Weekly Economic Update July 23, 2012

 

WEEKLY QUOTE “Live out of your imagination, not your history.”      – Stephen R. Covey      WEEKLY TIP If you are serious about buying a home, getting pre-approved by a lender can give you a better chance of making a serious offer.      WEEKLY RIDDLE I nearly always lie on a surface, and I come in different shapes and sizes, often with curves. You can put me anywhere you like, yet there is only one proper place for me. What am I?     Last week’s riddle: Note this alphabetic progression: B, C, D, E, G. What letter should then follow as the sixth letter in this successive series?    Last week’s answer: P (the next letter in the alphabet with the same rhyming sound).

July 23, 2012      NO ADVANCE IN CONSUMER PRICES The federal government’s Consumer Price Index was flat in June, though the core CPI (minus food and energy prices) did rise 0.2%. Statistically, this was exactly what economists surveyed by MarketWatch had expected. Annualized inflation was running at 3.9% back in September; it was just 1.7% in both May and June.1 HOUSING INDICATORS REGISTER HIGHS & LOWS According to the Commerce Department, housing starts were up 6.9% for June to the highest level since October 2008. The average interest rate on the 30-year FRM fell to a new record low of 3.53% in Freddie Mac’s July 19 survey, as did the average rate on the 15-year FRM (2.83%). Existing home sales, however, slipped badly in June – the National Association of Realtors said the sales volume slowed 5.4% to a pace unseen in nine months. Sales were still 4.5% improved from a year before.2 RETAIL SALES SLIP 0.5% in JUNE They have now declined for three straight months, and a retreat of that length hasn’t been recorded by the Commerce Department since July-December 2008. Analysts polled by Bloomberg News had forecast an increase of at least 0.2%.3 STOCKS SLIP FRIDAY BUT GAIN FOR THE WEEK Spain’s projection of recession into 2013 sent European shares down about 1% on Friday, with yields on Spanish bonds topping 7%. The Dow fell 121 points on the day, but on the week it rose 0.36% to close at 12,822.57 Friday. The NASDAQ (+0.58% to 2,925.30) and S&P 500 (+0.43% to 1,362.66) also posted five-day gains. After a 4.98% weekly gain, NYMEX crude settled Friday at $91.44 per barrel.4,5 THIS WEEK: Earnings season is in full swing, with McDonalds, Hasbro, Baidu, Halliburton and Texas Instruments offering results Monday. Tuesday, Q2 results are in from Apple, Broadcom, DuPont, UPS, Aflac and AT&T. Wednesday, the Census Bureau publishes June new home sales data and Ford, ConocoPhillips, Symantec, PepsiCo, Bristol-Myers, GlaxoSmithKline, Western Digital, Boeing, Caterpillar, VISA, WholeFoods and Zynga issue earnings reports. On Thursday, new initial claims figures are in along with the latest pending home sales report from the NAR and data on hard goods orders in June; earnings arrive from ExxonMobil, 3M, Pulte, Sprint, Expedia, Amazon.com, Starbucks, Amgen, Facebook, Dow Chemical, AstraZeneca and Credit Suisse, and a Commodity Futures Trading Commission emergency meeting will be held in response to the PFGBest scandal. Friday brings the final University of Michigan consumer sentiment survey for July, the second estimate of Q2 GDP and earnings from Barclays, Merck, DR Horton and Chevron. % CHG Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +4.95 +1.99 -1.49 +5.99 NASDAQ +12.29 +3.95 +1.77 +12.18 S&P 500 +8.35 +2.78 -2.24 +6.07 REAL YIELD 7/20 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS -0.67% 0.62% 2.60% 3.10%   Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 7/20/124,6,7,8 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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Weekly Economic Update July 9, 2012

 

WEEKLY QUOTE “All right, I am corny. But I think there are about 140 million people in this country just as corny as I am.”      – Walt Disney      WEEKLY TIP If you are expecting a child, take a moment to calculate the amount left on your mortgage and to roughly estimate the future cost of his or her college education. Besides defining some financial goals, this will also help you determine how much life insurance you may need.    WEEKLY RIDDLE I may be red, green or yellow. Eat me, and you may stay a healthy fellow. My interior is white; I don’t give off light. What am I?   Last week’s riddle: Two sailors stand at opposite sides of a boat. One looks west and the other looks east, and yet they are both able to see each other clearly. How can this be?    Last week’s answer: The sailors are looking inward (into the boat) while standing with their backs against the sides of the ship.	July 9, 2012 WEAK JOB MARKET PERSISTS IN JUNE America’s unemployment rate remained at 8.2% in June with non-farm payrolls expanding by just 80,000 positions. The underemployment rate rose to 14.9%. The Labor Department report offered a troubling big-picture detail: our economy has generated fewer than 100,000 new jobs for four straight months, in what seems like a replay of May-August 2011 (when monthly job gains averaged just 80,000). Does this signal another “soft patch”? Maybe not. For example, January-May job growth has exceeded June-September job growth regularly since 1987. Two sobering facts remain: between January 2008 and February 2010, the economy shed almost 8.8 million jobs, and since then it has regained less than 44% of them.1,2 ISM GAUGES DROP FOR INDUSTRY & SERVICE SECTORS The Institute for Supply Management’s closely watched manufacturing sector index dipped to 49.7 in June from May’s 53.5 mark (meaning sector contraction). ISM’s service sector index also saw a June descent to 52.1 from May’s 53.7 reading. Factory orders did rise 0.7% in June, far above the 0.2% expected by analysts polled by Reuters.3,4 AUTO SALES UP; CHAIN-STORE SALES DISAPPOINT  Big automakers announced nice 12-month sales gains for June: Toyota, +60%; Nissan, +28%; Chrysler, +20%; General Motors, +16%. The International Council of Shopping Centers gauged a 0.2% annualized increase in same-store sales in June, as opposed to a 1.7% yearly gain for May.4,5 A MIXED WEEK ON WALL STREET While the NASDAQ advanced 0.08% last week to close at 2,937.33 Friday, the DJIA (-0.84% to 12,772.47) and the S&P 500 (-0.55% to 1,354.68) both staged weekly retreats. Bulls interpreted the European Central Bank’s July 5 interest rate cut as a token gesture, and last week’s encouraging ADP jobs report was not affirmed by the Labor Department’s numbers. Oil ended the week at $84.45 on the NYMEX (-0.60% for the week) while gold lost 1.58% last week to settle at $1,578.90 on the COMEX.2,6 THIS WEEK: Another earnings season is here: as usual, Alcoa leads the way on Monday. Tuesday brings earnings from Levi Strauss. Wednesday, we have reports on the U.S. trade deficit and wholesale inventories, Q2 results from Marriott and the June 20 FOMC minutes. Thursday, earnings from Fastenal and Progressive arrive along with new weekly jobless claims figures. On Friday, Wells Fargo and JPMorgan Chase issue Q2 results, and we get June’s Producer Price Index and the preliminary July consumer sentiment survey from the University of Michigan. % CHG Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +4.54 +1.16 -1.23 +3.62 NASDAQ +12.75 +3.65 +2.03 +10.28 S&P 500 +7.72 +1.15 -2.30 +3.70 REAL YIELD 7/6 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS -0.53% 0.74% 2.79% 3.48% Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 7/6/122,7,8,9 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. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. 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 – http://www.boston.com/business/news/2012/07/06/employers-add-jobs-economy-struggles/xTVUZOt6lNJZGi1aBhxrGL/story.html [7/6/12] 2 – money.msn.com/market-news/post.aspx?post=96140b67-efa5-49c8-9ffc-85cd17eaea41 [7/6/12] 3 – http://www.ism.ws/ISMReport/NonMfgROB.cfm [7/5/12] 4 – money.msn.com/market-news/post.aspx?post=ac939968-c8f5-4806-909b-3d029be476e1 [7/6/12] 5 – finance.yahoo.com/news/retailers-report-tepid-june-sales-175710325.html [7/5/12] 6 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [7/6/12] 7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F6%2F11&x=0&y=0 [7/6/12] 7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F6%2F11&x=0&y=0 [7/6/12] 7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F6%2F11&x=0&y=0 [7/6/12] 7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F6%2F07&x=0&y=0 [7/6/12] 7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F6%2F07&x=0&y=0 [7/6/12] 7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F6%2F07&x=0&y=0 [7/6/12] 7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F5%2F02&x=0&y=0 [7/6/12] 7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F5%2F02&x=0&y=0 [7/6/12] 7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F5%2F02&x=0&y=0 [7/6/12] 8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/6/12] 8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/6/12] 9 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]

Weekly Economic Update July 2, 2012

WEEKLY QUOTE

“A friendship founded on business is better than a business founded on friendship.”

– John D. Rockefeller

WEEKLY TIP

If you are 60 now, there is a reasonable chance that you may live into your eighties or nineties. So with longevity in mind, plan retirement with wealth accumulation and wealth protection in mind.

WEEKLY RIDDLE

Two sailors stand at opposite sides of a boat. One looks west and the other looks east – and yet, they are both able to see each other clearly. How can this be?

Last week’s riddle:
It can be told and made, and cracked and played – and yet, it is only spoken. What is it?

Last week’s answer:
A joke.

July 2, 2012

MARKETS RALLY ON BOLD EU PROPOSAL
Last week, European leaders crafted a new plan to help the continent’s beleaguered banks: eurozone rescue funds would be used to directly recapitalize troubled lenders, without contributing to existing sovereign debt. A single supervisory body would also be created to serve as a banking watchdog. Key details need to be ironed out, but Wall Street loved the news – the Dow gained 278 points Friday.1

HEALTH CARE REFORMS (LARGELY) STAND
In a 5-4 vote last week, the Supreme Court upheld the individual insurance mandate within 2010’s Affordable Care Act. In the majority opinion, Chief Justice John G. Roberts, Jr. characterized the mandate as a tax permitted under the Constitution. The high court did rule that the law’s expansion of Medicaid violated states’ rights.2

ENCOURAGING DEVELOPMENTS IN REAL ESTATE
The National Association of Realtors said that its pending home sales index rose 5.6% in May to 101.1 – the highest level in two years, and a number characteristic of a “healthy” residential real estate market. New home sales rose 7.6% in May to a pace unseen since April 2010, the Census Bureau noted. Freddie Mac said average interest rates on conventional home loans hit a new low last week at 3.66%.3

NO GAINS IN CONSUMER SPENDING OR CONFIDENCE
Personal spending was flat in May, and the Commerce Department revised April’s gain to just 0.1%. The Conference Board’s June consumer confidence survey fell to 62.0 from May’s revised 64.4 reading; June’s final University of Michigan consumer sentiment survey dropped down to 73.2 from May’s final 79.3 mark.4,5

OIL, GOLD, EQUITIES ALL RISE
Friday, the S&P 500 (1,362.16), NASDAQ (2,935.05) and DJIA (12,880.09) all settled at highs unseen since May 8. For the week, the Dow gained 1.89%, the S&P 2.03% and the NASDAQ 1.47%. Oil settled Friday in New York at $84.96 a barrel, leaping $7.27 in a day; gold jumped $53.80 to close the week at $1,604.20 an ounce on the COMEX.1,6

THIS WEEK: Monday, the Institute for Supply Management presents its June manufacturing index; May construction spending data will also appear. Tuesday, the federal government issues reports on May factory output and June auto sales; the NYSE closes early. Wednesday is July 4, and U.S. equity and bond markets will be closed. ISM’s June non-manufacturing index and the latest weekly jobless claims numbers come out on Thursday. The June unemployment report arrives Friday.
% CHG Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +5.42 +5.05 -0.79 +3.93
NASDAQ +12.66 +7.10 +2.55 +10.06
S&P 500 +8.31 +4.19 -1.88 +3.76
REAL YIELD 6/29 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.46% 0.74% 2.65% 3.48%

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 6/29/121,7,8,9
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. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. 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/market-news/post.aspx?post=95f998bd-6fbe-4de1-9b51-8cb1f437973a [6/29/12]
2 – http://www.latimes.com/news/politics/la-pn-justice-roberts-leads-supreme-court-support-of-healthcare-law-20120628,0,3606595.story [6/28/12]
3 – http://www.mercurynews.com/business/ci_20963751/look-at-us-housing-market-at-glance [6/28/12]
4 – http://www.reuters.com/article/2012/06/29/usa-economy-idUSL2E8HT2ZG20120629 [6/29/12]
5 – briefing.com/investor/calendars/economic/2012/06/25-29 [6/29/12]
6 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [6/29/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F29%2F11&x=0&y=0 [6/29/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F29%2F11&x=0&y=0 [6/29/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F29%2F11&x=0&y=0 [6/29/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F29%2F07&x=0&y=0 [6/29/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F29%2F07&x=0&y=0 [6/29/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F29%2F07&x=0&y=0 [6/29/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F28%2F02&x=0&y=0 [6/29/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F28%2F02&x=0&y=0 [6/29/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F28%2F02&x=0&y=0 [6/29/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/29/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/29/12]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]