Weekly Economic Update for the Week of April 12, 2010

Did banks downplay risk levels? So contends a Wall Street Journal story, citing data from the Federal Reserve Bank of New York. It says that during the last five quarters, a total of 18 big banks reduced borrowing just before reporting debt levels to the public, then increased debt levels as the quarter progressed. The practice, while certainly legal, has prompted an SEC inquiry.¹

Inventories beat expectations. Wholesale inventories, that is. The Commerce Department said they increased by 0.6% for February, a hint that first quarter GDP might prove stronger than presumed. Economists had predicted a 0.4 gain.²

Superb week for metals. As the EU moved to aid Greece, metals responded to the news with gains. Across last week, gold prices rose 3.18% to $1,161.90 an ounce. Silver gained 2.58%, copper 0.17%, platinum 3.19% and palladium 4.53% during those five trading days. Earlier in the week, concerns about a Greece default sent the 10-year note yield above 4% for the first time in ten months on April 5; yields were 3.88% on Friday afternoon.^3,4

Dow flirts with 11,000. The index actually climbed over that benchmark Friday, but settled at 10,997.35 as the trading week wrapped up. It gained 0.64% last week, while the S&P 500 advanced 1.38% and the NASDAQ 2.14%. The stock market has now climbed for six weeks in a row, the longest win streak on the Street since last April. Something else to note: the CBOE VIX, the “fear index”, finished the week at its lowest level since October 2007.⁵

(Source: CNBC.com, BigCharts.com, ustreas.gov, bls.gov, 4/9/10)^5,6,7,8
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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These views are those of Peter Montoya Inc., and not Statler Financial Services, Inc., and should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. http://www.montoyaregistry.com http://www.petermontoya.com
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Citations.
1 online.wsj.com/article/SB10001424052702304830104575172280848939898.html [4/9/10]
2 abcnews.go.com/Business/wireStory?id=10330148 [4/9/10]
3 cnbc.com/id/36333048/page/2/ [4/9/10]
4 businessweek.com/news/2010-04-09/treasuries-set-for-weekly-gain-on-concern-greece-will-default.html [4/9/10]
5 cnbc.com/id/36328433 [4/9/10]
6 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=4%2F9%2F09&x=0&y=0 [4/9/10]
6 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=4%2F9%2F09&x=0&y=0 [4/9/10]
6 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=4%2F9%2F09&x=0&y=0 [4/9/10]
6 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=4%2F8%2F05&x=0&y=0 [4/9/10]
6 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=4%2F8%2F05&x=0&y=0 [4/9/10]
6 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=4%2F8%2F05&x=0&y=0 [4/9/10]
6 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=4%2F10%2F00&x=0&y=0 [4/9/10]
6 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=4%2F10%2F00&x=0&y=0 [4/9/10]
6 bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=4%2F10%2F00&x=0&y=0 [4/9/10]
7 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [4/9/10]
7 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [4/9/10]
8 treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]