Weekly Economic Update March 4, 2013

WEEKLY QUOTE “All you need in the world is love and laughter – to have love in one hand, and laughter in the other.”       – August Wilson           WEEKLY TIP Retirement should not mark the end of equity investment. As you will likely be retired for 15-20 years or longer, turning away from equities may cost you growth and income.       WEEKLY RIDDLE Kristi and David live at opposite ends of a metro area but attend the same college. David left for campus 30 minutes before Kristi and they met at a coffee house. Who was closer to campus when they met?        Last week’s riddle: What can explode slowly, with no smoke or flame?     Last week’s answer: A population.	March 4, 2013     DESPITE ANXIETIES, DOW STAYS ABOVE 14,000 The DJIA settled at 14,089.66 Friday, gaining 0.64% on the week. The S&P 500 (+0.17% to 1,518.20) and NASDAQ (+0.25% to 3,169.74) also logged five-day advances. All this happened in the face of significant instability, as Wall Street fretted over the deadlock in Italy’s national elections and the sequester cuts taking effect on March 1. Congress and the White House could not arrange a deal to delay the sequestration last week, which means that $85 billion will be subtracted from the budgets of government agencies between March 2 and October 1 unless a bipartisan agreement emerges to undo the cuts.1,2 TERRIFIC REAL ESTATE DATA HELPS BUOY STOCKS New home buying accelerated 16% in January – the biggest monthly rise in almost 20 years, according to the Commerce Department. Pending home sales rose 4.5% in January, the National Association of Realtors said; that was far above the 1.0% gain forecast by economists polled by Briefing.com. Finally, the December edition of the S&P/Case-Shiller Home Price Index showed a 6.8% yearly gain across 20 metro markets, bettering November’s 5.5% impressive annualized increase.3,4   MANUFACTURING PMI RISES IN FEBRUARY The Institute for Supply Management’s manufacturing PMI improved 1.1% in February to 54.2. While the Commerce Department noted a 5.2% overall retreat in durable goods orders in January (the first decline in four months), new orders rose 1.9% when the volatile transportation category was factored out.4,5 CONSUMER CONFIDENCE & SPENDING HOLD UP The Conference Board’s February consumer confidence poll soared to 69.0 from January’s 58.4 mark, and the University of Michigan’s final February consumer sentiment survey came in at 77.6, topping the Reuters consensus forecast of 76.3. The federal government revised Q4 GDP north slightly to +0.1% last week; consumer spending rose 0.2% in January, even as consumer incomes fell 3.6%.1,4 THIS WEEK: Monday, Transocean announces Q4 earnings. Tuesday brings ISM’s latest non-manufacturing PMI and quarterly results from VeriFone. On Wednesday, Staples, American Eagle Outfitters, BigLots! and Pet Smart issue quarterly earnings; February’s ADP employment report appears plus a new Federal Reserve Beige Book and data on January factory orders. The Bank of England and European Central Bank wrap up policy meetings Thursday, and a new Challenger job-cut report and earnings from H&R Block, Pandora, Kroger and Smithfield Foods appear. Friday, the February jobs report is out along with earnings from Ann and Foot Locker. % CHG Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +7.52 +8.55 +2.97 +7.86 NASDAQ +4.98 +6.05 +7.91 +13.70 S&P 500 +6.45 +10.49 +2.82 +8.05 REAL YIELD 3/1 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS -0.67% -0.23% 1.10% 1.77%   Sources: cnbc.com, bigcharts.com, treasury.gov – 3/1/131,6,7,8 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. 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.cnbc.com/id/100511717 [3/1/13] 2 – http://www.reuters.com/article/2013/03/01/us-usa-fiscal-idUSBRE91P0W220130301 [3/1/13] 3 – http://www.mercurynews.com/real-estate/ci_22670982/new-home-sales-hit-highest-level-more-than [2/26/13] 4 – briefing.com/investor/calendars/economic/2013/02/25-01 [3/1/13] 5 – http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf [2/27/13] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F1%2F12&x=0&y=0 [3/1/13] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F1%2F12&x=0&y=0 [3/1/13] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F1%2F12&x=0&y=0 [3/1/13] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F29%2F08&x=0&y=0 [3/1/13] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F29%2F08&x=0&y=0 [3/1/13] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F29%2F08&x=0&y=0 [3/1/13] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F28%2F03&x=0&y=0 [3/1/13] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F28%2F03&x=0&y=0 [3/1/13] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F28%2F03&x=0&y=0 [3/1/13] 7 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/1/13] 8 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/1/13]

 

Weekly Economic Update, May 1, 2011

CONSUMER SPENDING INCREASES 0.6%
This March gain wasn’t that surprising in light of rising food and energy costs. (The Commerce Department just revised February’s gain to 0.9%). Disposable incomes were up by 0.1% in March while the personal savings rate held steady at 5.5%. The Commerce Department also released its initial estimate of 1Q 2011 GDP Friday (+1.8%) and 1Q consumer spending (+2.7%).¹

CONSUMER CONFIDENCE REBOUNDS
The University of Michigan’s final April consumer sentiment survey came in at 69.8, up from March’s final reading of 67.5. The one-year inflation expectation was 4.6%, the same as last month. The Conference Board’s April consumer confidence poll came in at 65.4, better than the median projection of economists surveyed by Bloomberg. Both indices improved despite gas prices rising – AAA said a gallon of regular unleaded averaged $3.87 on April 27, the highest price since August 2008.^1,2

CASE-SHILLER INDEX WITHIN .01% OF DOUBLE-DIP
February’s Case-Shiller Home Price Index revealed a 3.3% year-over-year drop in prices across 20 metro areas. Most notably, the index was down 1.1% from January to just .01% above its April 2009 trough. Prices in 14 of the index’s 20 metro areas have declined for six months or more. In more positive news, the Census Bureau said new home sales increased by 11.1% from February’s record low. The National Association of Realtors said pending home sales were 5.1% better in March than in February.^3,4

STOCKS FINISH APRIL WITH A FLOURISH
Stocks took their cues from earnings last week, and earnings were mostly strong. The weekly performance numbers: DJIA, +2.44% to 12,810.54; S&P 500, +1.96% to 1,363.60; NASDAQ, +1.89% to 2,873.54. The DJIA rose 3.98% in April.⁵

THIS WEEK: On Monday, ISM’s April manufacturing index comes out, we get data on March construction spending, and we have 1Q results from Humana. Tuesday brings 1Q earnings from Pfizer, CBS, MasterCard and Comcast along with reports on March factory orders and auto sales. Wednesday, we get quarterly results from AOL, MetLife, Kellogg and Anheuser-Busch and the ISM April service sector index. On Thursday, GM, AIG, Kraft, VISA and CVS all release 1Q earnings reports, Fed chairman Ben Bernanke speaks at a Chicago Fed conference, the European Central Bank makes a rate decision, and weekly jobless claims are released. Friday offers the March jobs report and 1Q results out of Berkshire Hathaway.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 4/29/11^5,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of Statler Financial Services, Inc. This information should not be construed as investment, tax or legal 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. 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.

Statler Financial Services, Inc. is registered as an investment adviser with the state of Florida. The presence of this Web site on the Internet shall in no direct or indirect way to be construed or interpreted to suggest Statler Financial Services, Inc. is soliciting to sell advisory services or offering to sell advisory services to residents of any other state other than the state of Florida.

Citations.
1 – bloomberg.com/news/2011-04-29/personal-spending-in-u-s-rises-0-6-incomes-climb-more-than-forecast.html [4/29/11]
2 – bloomberg.com/news/2011-04-29/u-s-consumer-sentiment-gains-as-index-climbs-to-69-8-from-67-5-in-march.html [4/29/11]
3 – seattlepi.com/realestate/article/Home-prices-continue-to-slide-nationwide-more-so-1353033.php [4/26/11]
4 – bloomberg.com/news/2011-04-28/pending-sales-of-existing-homes-in-u-s-increase-5-1-more-than-estimated.html [4/28/11]
5 – cnbc.com/id/42827178 [4/29/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F29%2F10&x=0&y=0 [4/29/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F29%2F10&x=10&y=18 [4/29/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F29%2F10&x=0&y=0 [4/29/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F28%2F06&x=0&y=0 [4/29/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F28%2F06&x=0&y=0 [4/29/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F28%2F06&x=0&y=0 [4/29/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F30%2F01&x=0&y=0 [4/29/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F30%2F01&x=0&y=0 [4/29/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F30%2F01&x=0&y=0 [4/29/11]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/29/11]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/29/11]
8 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]
9 – montoyaregistry.com/Financial-Market.aspx?financial-market=power-of-attorney-why-its-so-important&category=30 [5/1/11]