WEEKLY ECONOMIC UPDATE 8/15/2011

John J. Barrios, CFP® Presents:

WEEKLY ECONOMIC UPDATE

 

WEEKLY QUOTE

“Is there anything better than to be longing for something, when you know it is within reach?”

– Greta Garbo

WEEKLY TIP

Should your adult children ask you to help them out with business financing or a down payment on a property, refrain from saying yes until you determine if your personal finances can handle it.

WEEKLY RIDDLE

What surrounds everyone and is the end of time and space?

Last week’s riddle:
There is a 5-letter, single-syllable word that you can take 4 letters out of, leaving you with only a single letter that has the same pronunciation as the original 5-letter word. What is this word? (Hint: it involves waiting in line.)

Last week’s answer:

Queue.

 

August 15, 2011

Americans BUY MORE IN JULY
According to the Commerce Department, U.S. retail purchases increased by 0.5% in July for the best month-over-month gain since March. That doesn’t seem to spell recession; if anything, it attests to the resilience of consumer spending. Additionally, business inventories grew by 0.3% in June as wholesale stockpiles grew 0.6%.1,2

 

CONSUMER CONFIDENCE WANES

The initial August Reuters/University of Michigan consumer sentiment survey showed a major plummet. While economists polled by MarketWatch had expected a reading of 61.0, the gauge hit 54.9 – its lowest level since May 1980.3

 

Gold GAINS $91 IN A WEEK
It wasn’t a typical week, and the precious metal soared in COMEX trading. Across August 8-12, gold advanced $91.40 – even with Friday’s $8.60 loss. It was the biggest weekly dollar gain for gold since September 15-19, 2008. A +5.54% week took prices to $1,740.20 per ounce at Friday’s close. As for oil, it lost 1.73% on the week, with prices settling at $85.38 a barrel Friday on the NYMEX.4

 

A RECORD LOW FOR THE REFINANCER’S FAVORITE
In Freddie Mac’s August 11 Primary Mortgage Market Survey, average interest rates on 15-year fixed rate mortgages hit an all-time low of 3.50%. The Mortgage Bankers Association reports that refi applications rose by 30% in the week ending August 5. Freddie Mac’s latest survey also showed rates for 30-year FRMs averaging 4.32%, a 9-month low.5

 

WILD SWINGS ON WALL STREET
The Dow experienced five straight days of triple-digit moves last week; that hadn’t happened since January 2010. All three major U.S. indices lost ground for the week. Friday, the markets cheered U.S. retail sales gains and a ban on short selling enacted by Italy, Spain, France and Belgium. The numbers for the week: S&P 500, -1.72% to 1,178.81; DJIA, -1.53% to 11,269.02; NASDAQ, -0.96% to 2,507.98.6,7,8

 

THIS WEEK: Monday, Lowe’s announces 2Q results. Tuesday, we have reports on July industrial output and housing starts plus earnings from Wal-Mart, Saks, Home Depot and Dell. Wednesday, we get the July Producer Price Index and earnings from Target and Deere. Thursday brings July existing home sales data, the July Consumer Price Index, the Conference Board’s July set of leading indicators, weekly jobless claims numbers and earnings from Gap, Sears and Hewlett-Packard. No major economic releases or earnings reports are scheduled for Friday.

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -2.66 +9.20 +0.33 +0.82
NASDAQ -5.46 +14.51 +4.38 +2.65
S&P 500 -6.27 +8.79 -1.39 -0.10
REAL YIELD 8/12 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.02% 1.05% 2.33% 3.50%

 
Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 8/12/116,9,10,11

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 – latimesblogs.latimes.com/money_co/2011/08/retail-sales-send-stocks-up-again.html [8/12/11]

2 – fxstreet.com/fundamental/economic-indicators/us-business-inventories-rise-sligh0812/2011/08/12/ [8/12/11]

3 – marketwatch.com/story/august-sentiment-drops-to-lowest-since-1980-2011-08-12 [8/12/11]

4 – blogs.wsj.com/marketbeat/2011/08/12/data-points-energy-metals-511/ [8/12/11]

5 – usatoday.com/money/economy/housing/2011-08-11-mortgage-rates-low_n.htm [8/11/11]

6 – cnbc.com/id/44118761 [8/12/11]

7 – blogs.wsj.com/marketbeat/2011/08/12/data-points-u-s-markets-42/ [8/12/11]

8 – cnbc.com/id/44115923/ [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F12%2F10&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F12%2F10&x=10&y=18 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F12%2F10&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F11%2F06&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F11%2F06&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F11%2F06&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F13%2F01&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F13%2F01&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F13%2F01&x=0&y=0 [8/12/11]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/12/11]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/12/11]

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

12 – montoyaregistry.com/Financial-Market.aspx?financial-market=the-truth-about-financial-advisors&category=5 [8/14/11]

 

 

 

 

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