WEEKLY ECONOMIC UPDATE 10/24/2011

John J. Barrios, CFP® Presents:
WEEKLY QUOTE 

“Jealousy is the tribute mediocrity pays to genius.”

– Fulton J. Sheen

WEEKLY TIP

Many small business owners don’t have succession plans. If you haven’t created one, now is as good a time as any to start; this will not only enable continuity, but also address possible gift, income and estate tax issues.

 

WEEKLY RIDDLE

I am in the center of gravity, and part of every victory. I am clearly seen in the midst of a river. I could name three who are in love with me and have three associates in vice. What am I?

Last week’s riddle:
Trains travel from one town to another town all day, always on the same track, always going nonstop and at the same speed. The noon train took 80 minutes to complete the trip, but the 4 PM train took an hour and 20 minutes. Why?

Last week’s answer:

80 minutes is the same as an hour and 20 minutes.

 

October 24, 2011 

ANNUALIZED INFLATION HITS 3.9%
So noted the Bureau of Labor Statistics last week. The Consumer Price Index rose 0.3% during the month of September, with core CPI rising 0.1%, the smallest such increase in six months. (Annualized core consumer inflation was at 2.0%.) The Producer Price Index climbed 0.8% for September after a flat August.1

 

HOMEBUYING TAPERS OFF IN SEPTEMBER
Existing home sales decreased by 3.0% last month, according to the National Association of Realtors. At this rate, about 4.91 million previously occupied homes will be sold in 2011, matching the total for 2010. In a normal year, about 6 million residential resales occur in the real estate sector.2

 

HOUSING STARTS UP 15%
Here’s a good sign for residential real estate: a sign of demand. Most of the 15.0% monthly increase in September came from apartment construction; the Commerce Department reported a 53% monthly jump in that category. Single-family construction improved by 1.7%. Overall, there were 658,000 housing starts last month, the best number in any month since April 2010.3

 

DOW EXTENDS WINNING STREAK
Wall Street rallied Friday on the eve of the crucial summit meeting to address the Eurozone debt crisis, helped by news that a new aid package for Greece had been approved by EU finance ministers. The DJIA gained ground for the fourth week in a row; the S&P 500 also advanced. The weekly numbers: S&P 500, +1.12% to 1,238.25; DJIA, +1.41% to 11,808.79; NASDAQ, -1.14% to 2,637.46.4,5

 

THIS WEEK: Earnings season is in full swing. Monday, earnings reports from Netflix, Amgen, Caterpillar and Texas Instruments hit the Street. On Tuesday, BP, Deutsche Bank, Amazon.com, Broadcom, DuPont, UBS and 3M issue 3Q results … and the August Case/Shiller Home Price Index comes out along with the Conference Board’s October gauge of consumer confidence. On Wednesday, quarterly results arrive from Boeing, VISA, GlaxoSmithKline, Sprint, ConocoPhillips and Ford and we have data on September new home sales and durable goods orders. Thursday brings the initial estimate of 3Q GDP and the data on September pending home sales, plus earnings from ExxonMobil, Occidental Petroleum, Baidu, P&G, Aetna, Bristol-Myers Squibb, Time Warner Cable, Hershey and Motorola Solutions. Friday, earnings from Merck and Chevron come out along with the report on September consumer spending and October’s final University of Michigan consume r sentiment index.

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +2.00 +5.94 -0.32 +2.59
NASDAQ -0.58 +7.23 +2.52 +5.44
S&P 500 -1.54 +4.91 -1.90 +1.36
REAL YIELD 10/21 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.23% 0.50% 2.53% 3.50%

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 10/21/114,5,6,7,8

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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John Barrios is registered to offer securities through First Heartland Capital, Inc. Member FINRA & SIPC, and offer advisory services through First Heartland Consultants, Inc.   Barrios Financial Services is not affiliated with First Heartland Capital, Inc. 

 

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 – nytimes.com/2011/10/20/business/economy/us-consumer-inflation-subdued-housing-starts-up.html [10/19/11]

2 – ajc.com/business/sales-of-previously-occupied-1206303.html [10/20/11]

3 – thestreet.com/story/11283665/1/raise-the-roof-housing-starts-up-15-in-september.html [10/20/11]

4 – montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [10/21/11]

5 – cnbc.com/id/44988273 [10/21/11]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F21%2F10&x=0&y=0 [10/21/11]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F21F2%2F10&x=10&y=18 [10/21/11]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F21%2F10&x=0&y=0 [10/21/11]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F20%2F06&x=0&y=0 [10/21/11]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F20%2F06&x=0&y=0 [10/21/11]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F20%2F06&x=0&y=0 [10/21/11]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F22%2F01&x=0&y=0 [10/21/11]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F22%2F01&x=0&y=0 [10/21/11]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F22%2F01&x=0&y=0 [10/21/11]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/21/11]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/21/11]

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

 

 

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