Weekly Economic Update May 27, 2013

May 27, 2013

 

 

WEEKLY QUOTE

“Let him who would enjoy a good future waste none of his present.”

– Roger Babson

WEEKLY TIP 

What’s more important for a young couple: an emergency fund, or saving for a down payment on a home? The emergency fund gets the nod if your finances allow you to save toward only one of these two financial objectives.

 

WEEKLY RIDDLE

Rigid is my spine, my innards are mostly pale, yet I am always ready to tell a tale. What am I?

Last week’s riddle:

What should the next number be in this series: 103, 107, 109, 113, 127 …

Last week’s answer:

131, as the whole series is made up of prime numbers.

APRIL DATA AFFIRMS HOUSING REBOUND

Last month brought a 2.3% gain in new home sales and an 0.6% increase in existing home sales. Distressed properties (short sales and foreclosures) represented only 18% of residential resales in April, the National Association of Realtors noted; compare that with 28% of sales in April 2012. NAR also announced that the median existing home price was $192,800 in April, 11.0% higher than a year ago. The pace of new home buying has improved 29.0% in the past 12 months, according to the Census Bureau.1,2

FED MINUTES DISCLOSE THOUGHTS OF TAPERING QE3

The May 1 Federal Open Market Committee minutes were released last Wednesday, shortly after Federal Reserve chairman Ben Bernanke mentioned the need to sustain the central bank’s current stimulus effort in Congress. The minutes, however, noted that “a number” of Fed officials were open to scaling down QE3 as soon as June if economic indicators sufficiently improved. Concern and confusion about these mixed messages put more volatility into the markets and factored into a 3-day losing streak for the S&P 500.3

DURABLE GOODS ORDERS UP 3.3% IN APRIL

This contrasts with March’s 5.9% decrease. With transportation orders factored out, the April increase was still 1.3%. Census Bureau reports have noted improvements in hard goods orders in two of the past three months, even with the sequester.4

RUSSELL 2000 REACHES A MILESTONE

While the small-cap benchmark fell 1.20% last week, it also made history on May 20: it attained the 1,000 level for the first time. The RUT settled Friday at 984.28. The S&P 500 (-1.07% to 1,649.61), DJIA (-0.33% to 15,303.10) and NASDAQ (-1.14% to 3,459.14) all slipped last week.4,5,6,7

THIS WEEK: U.S. financial markets are closed Monday in observance of Memorial Day. Tuesday sees the release of the March S&P/Case-Shiller Home Price Index, the Conference Board’s May consumer confidence survey and earnings from Tiffany & Co. and Wet Seal. DSW and Chico’s announce Q1 results on Wednesday. In addition to new initial jobless claims figures, Thursday offers NAR’s report on April pending home sales, the federal government’s second estimate of Q1 GDP, and earnings from Krispy Kreme, BigLots! and Costco. Friday, the Commerce Department issues its report on April personal spending and the University of Michigan’s final May consumer sentiment survey arrives.

 

% CHG	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+16.78	+22.13	+4.52	+7.79
NASDAQ	+14.56	+21.83	+8.30	+12.91
S&P 500	+15.66	+24.91	+3.98	+7.68
REAL YIELD	5/24 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	-0.26%	-0.38%	1.36%	1.72%

 

 

 

 

Sources: usatoday.com, thestreet.com, bigcharts.com, treasury.gov – 5/24/134,7,8,9,10

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. 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. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 – csmonitor.com/Business/new-economy/2013/0523/New-home-sales-rise-but-market-still-a-long-way-from-normal [5/23/13]

2 – realtor.org/news-releases/2013/05/april-existing-home-sales-up-but-constrained [5/22/13]

3 – reuters.com/article/2013/05/22/markets-usa-stocks-idUSL2N0E321R20130522 [5/22/13]

4 – thestreet.com/story/11933260/1/sp-poised-for-three-day-losing-streak-amid-qe-wind-down-chatter.html [5/24/13]

5 – marketwatch.com/story/russell-2000-index-breaks-above-1000-2013-05-20 [5/20/13]

6 – blogs.barrons.com/stockstowatchtoday/2013/05/24/dow-ekes-out-friday-gain-down-for-the-week/ [5/24/13]

7 – usatoday.idmanagedsolutions.com/stocks/overview.idms?index=SP500 [5/24/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F24%2F12&x=0&y=0 [5/24/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F24%2F12&x=0&y=0 [5/24/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F24%2F12&x=0&y=0 [5/24/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F23%2F08&x=0&y=0 [5/24/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F23%2F08&x=0&y=0 [5/24/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F23%2F08&x=0&y=0 [5/24/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F23%2F03&x=0&y=0 [5/24/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F23%2F03&x=0&y=0 [5/24/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F23%2F03&x=0&y=0 [5/24/13]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/24/13]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/24/13]

 

Weekly Economic Update May 20, 2013

WEEKLY QUOTE “How wonderful it is that nobody need wait a single moment before starting to improve the world.”       – Anne Frank           WEEKLY TIP Set aside a half-hour to organize your financial documents. It makes sense for tax season, and it makes sense all year.       WEEKLY RIDDLE What should the next number be in this series: 103, 107, 109, 113, 127 …      Last week’s riddle: I can’t be captured or held, and I certainly am not seen … yet I can occasionally be heard, and I am often all around you. What am I?     Last week’s answer: The wind.

May 20, 2013      SUBDUED INFLATION IN APRIL Consumer and producer prices retreated last month. The federal government’s Consumer Price Index fell 0.4%, a monthly descent unseen since December 2008; the Producer Price Index declined 0.7%, its biggest monthly drop in three years. Consumer prices also fell for a second straight month; the last time that happened was in late 2008. The core CPI did rise 0.1% in April; the yearly gain in the overall CPI was just 1.1%.1 THREE MORE POSITIVE SIGNS FOR THE ECONOMY The University of Michigan’s initial May consumer sentiment survey came in at 83.7 – its highest level since July 2007, 7.3 points above the final April mark. After falling 0.2% for March, the Conference Board’s index of U.S. leading indicators rose 0.6% for April. Census Bureau data showed retail sales ticking up 0.1% in April and 3.7% in the past year.2,3 HOUSING STARTS PLUNGE, BUILDING PERMITS SOAR While the year-over-year increase was 13.1%, housing starts plummeted 16.5% in April, largely due to a 37.8% drop in apartment starts. On the other hand,  last month brought a 14.3% rise in building permits … marked by a 40.6% jump in permits for apartment construction.4 BULLS KEEP RUNNING The S&P 500 is now on a 4-week winning streak. It rose another 1.98% last week to settle at 1,666.12 Friday. Complementing that 5-day gain, the NASDAQ went +1.82% last week while the DJIA went +1.56%; at Friday’s closing bell, the NASDAQ settled at 3,498.97 and the Dow at 15,354.40. A truly impressive factoid: the NASDAQ and S&P have gained 1% or more in each of the past four weeks.5 THIS WEEK: Monday brings earnings from Campbell Soup, TiVo and Urban Outfitters. On Tuesday, Best Buy, Home Depot, Medtronic, Vodafone, Saks, TJX and NetApp announce quarterly results. Wednesday, NAR releases its report on April existing home sales, the Federal Reserve releases the May 1 FOMC minutes, and Fed chairman Ben Bernanke testifies before Congress; Staples, L Brands, PetSmart, Toll Brothers, Target, Lowe’s and Hewlett-Packard post earnings. The Census Bureau report on April new home sales appears Thursday, along with the March FHFA housing price index and earnings from Dollar Tree, Gamestop, Ralph Lauren, Sears Holdings, Gap, Ross Stores, Aeropostale and Pandora. Friday offers the April durable goods orders report and Q1 results from Abercrombie & Fitch. % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +17.17 +23.40 +3.65 +7.69 NASDAQ +15.88 +24.36 +7.67 +12.74 S&P 500 +16.82 +27.69 +3.38 +7.64 REAL YIELD 5/17 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS -0.31% -0.35% 1.41% 1.84%   Sources: cnbc.com, bigcharts.com, treasury.gov – 5/17/135,6,7,8 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 April 1, 2013

WEEKLY QUOTE
“One must shy away from questionable undertakings, even when they bear a high-sounding name.”
– Albert Einstein

WEEKLY TIP

Collaboration among investment, legal and accounting professionals may make a big difference in the scope and execution of a financial strategy.

WEEKLY RIDDLE
Which positive whole number can you add 1.5 to and get the same result as you do when you multiply it by 1.5?

Last week’s riddle:
The letters in the words meter, man and uses may be rearranged to make a 12-letter word. What is this word?

Last week’s answer:
Measurements.
April 1, 2013

SOLID GAINS IN HOUSEHOLD SPENDING, INCOME
According to the latest Commerce Department report, household spending was up 0.7% in February (the largest gain in five months) while consumer incomes jumped 1.1%. February’s 35-cent climb in gasoline prices influenced the first number, while an 11.9% surge in dividends influenced the second. Still, consumer spending rose 0.3% in inflation-adjusted terms. The personal savings rate improved to 2.6%.1,2

CONSUMER POLLS TELL DIFFERENT STORIES
The University of Michigan’s final consumer sentiment survey for March came in at 78.6, improving by a full point from the end of February. The Conference Board’s March survey of consumer confidence presented a strikingly different result: it dropped to 59.7 from February’s 68.0 mark. The CB said the sequester had a negative influence, while the University of Michigan cited stock market highs, March’s lower gas prices and the housing recovery as positive factors.1,2

SMALLER INVENTORY MAY HAVE CURBED HOME SALES
New home sales fell 4.6% in February, according to the Census Bureau; the National Association of Realtors noted a 0.4% decline in pending home sales for that month. Reduced inventory appears to have been a factor. The January S&P/Case-Shiller Home Price Index showed a one-month gain of 1.0%.2

FINAL Q4 GDP +0.4%; HARD GOODS ORDERS JUMP
This last estimate from the Commerce Department still makes Q4 2012 growth the smallest in any quarter since 2011. More big ticket items were ordered in February: durable goods orders soared 5.7% in that month after falling 3.8% in January.2,3

A RECORD CLOSE FOR THE S&P 500
A terrific quarter wrapped up Thursday with the S&P settling at 1,569.19, the Dow at 14,578.54 and the NASDAQ at 3,267.52. March was the fifth straight positive month for both the S&P and NASDAQ. Last week’s gains: Dow, 0.46%; NASDAQ, 0.69%; S&P, 0.79%. Gold ended the quarter at $1,595.70, losing 4.8% in three months; oil settled Thursday at $97.23, rising 5.9% in the quarter.4,5

THIS WEEK:

Monday sees the release of the Institute for Supply Management’s March manufacturing PMI. Tuesday, the federal government presents data on March auto sales and February factory orders. ISM’s service sector PMI arrives Wednesday, along with earnings from ConAgra and Monsanto. Thursday, the European Central Bank and Bank of England make policy announcements. The Labor Department’s March employment report comes out on Friday.

%CHG	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+11.25	+11.06	+3.87	+7.90
NASDAQ	+8.21	+5.24	+8.90	+13.86
S&P 500	+10.03	+11.64	+3.86	+8.17
REAL YIELD	3/28 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	-0.64%	-0.11%	1.13%	2.09%

Sources: cnbc.com, bigcharts.com, treasury.gov – 3/28/134,6,7,8
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.nytimes.com/reuters/2013/03/29/business/29reuters-consumer-spending.html [3/29/13]
2 – http://www.csmonitor.com/Business/2013/0329/Strong-rise-in-consumer-spending-caps-good-week-in-economic-news [3/29/13]
3 – http://www.foxbusiness.com/economy/2013/03/26/durable-goods-orders-big-ticket-items-durable-goods/ [3/26/13]
4 – http://www.cnbc.com/id/100600350 [3/28/13]
5 – http://www.proactiveinvestors.com/companies/news/42162/oil-caps-longest-winning-streak-of-2013-gold-drops-42162.html [3/28/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F28%2F12&x=0&y=0 [3/28/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F28%2F12&x=0&y=0 [3/28/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F28%2F12&x=0&y=0 [3/28/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F28%2F08&x=0&y=0 [3/28/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F28%2F08&x=0&y=0 [3/28/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F28%2F08&x=0&y=0 [3/28/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F28%2F03&x=0&y=0 [3/28/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F28%2F03&x=0&y=0 [3/28/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F28%2F03&x=0&y=0 [3/28/13]
7 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/28/13]
8 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/28/13]