Weekly Economic Update – Apr. 2, 2012

John J. Barrios, CFP® Presents:

 

WEEKLY ECONOMIC UPDATE

 

WEEKLY QUOTE

“He who lives by the crystal ball soon learns to eat ground glass.”
– Edgar Fiedler

 

WEEKLY TIP

At a 4% rate of inflation, expenses will double every 18 years. That’s a pretty good argument for growth investing in retirement.

 

 

WEEKLY RIDDLE

 

Take one letter out of a 7-letter word and it becomes longer. What is this word?

 

 

Last week’s riddle:
You need to take a gallon of oil out of a barrel of oil. How can you do it using only a 3-gallon container and a 5-gallon container?

 

 

Last week’s answer:

Fill the 3-gallon container with oil and pour it into the 5-gallon container. Then fill the 3-gallon container again and use it to fill the 5-gallon container the rest of the way. One gallon will be left in the 3-gallon container.

HIGH GAS PRICES DON’T DENT PERSONAL SPENDING

Consumer spending increased by 0.8% in February, even with fuel prices soaring. That topped the 0.6% gain projected by economists polled by Reuters. February’s inflation-adjusted gain was 0.5%, the largest in six months. January’s headline personal spending gain was doubled to 0.4% in a Commerce Department revision.1

HOW IS THE CONSUMER FEELING?
The final March University of Michigan consumer sentiment survey hints that morale may be rising on Main Street. It came in at 76.2, well above the 74.3 consensus of economists polled by Briefing.com. On the other hand, the March consumer confidence poll from the Conference Board fell to 70.2 from February’s 71.6 mark, which was in line with the expectations of those economists.2

MORTGAGE RATES DIP BACK UNDER 4%
Freddie Mac’s March 29 survey found the average interest rate for a 30-year fixed-rate home loan at 3.99% with an average 0.7 point. Rates on 15-year FRMs averaged 3.23% with an average 0.8 point last week. A sour note: the S&P/Case-Shiller Home Price Index fell 3.8% in January to a low unseen since the end of 2002.2,3

DURABLE GOODS ORDERS UP 2.2% FOR FEBRUARY
This reverses some of the 3.6% retreat from January. However, economists polled by Briefing.com had expected a 2.8% gain for the month.2

A TREMENDOUS QUARTER WRAPS UP

The best first quarter for stocks in 14 years ended with another solid week: DJIA, +1.00% to 13,212.04; S&P 500, +0.81% to 1,408.47; NASDAQ, +0.77% to 3,091.57. Look at these Q1 performances: NASDAQ, +18.67% (its best quarter in 21 years); Dow, +8.14%; S&P 500, +12.00%. Gold futures climbed $9.50 for the week, settling Friday at $1,671.90 an ounce. Gold gained 6.71% for the quarter. NYMEX crude fell $3.85 last week, but still ended March at $103.02 with a 4.24% quarterly gain.4,5

THIS WEEK: The March ISM manufacturing index and February construction spending data arrive Monday. Tuesday presents Commerce Department reports on February factory orders and March vehicle sales along with the March 13 FOMC minutes. On Wednesday, the March edition of ISM’s service sector index is out, plus Q1 earnings from Monsanto and Bed Bath & Beyond. Thursday brings earnings from CarMax and the latest initial claims numbers. On Good Friday, U.S. financial markets will be closed and banks will be open; the March unemployment figures will also be released.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+8.14

+6.97

+1.39

+2.70

NASDAQ

+18.67

+11.34

+5.53

+6.75

S&P 500

+12.00

+6.04

-0.17

+2.28

REAL YIELD

3/30 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.09%

1.00%

2.21%

3.48%

 

Sources: msn.money.com, bigcharts.com, treasury.gov, treasurydirect.gov – 3/30/124,6,7,8

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. 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 – www.cnbc.com/id/46902933/ [3/30/12]

2 – briefing.com/investor/calendars/economic/2012/03/26-30 [3/30/12]

3 – freddiemac.mediaroom.com/index.php?s=12329&item=126095 [3/30/12]

4 – money.msn.com/market-news/post.aspx?post=087cac64-3d67-4737-b94a-31c3ff49ba16 [3/30/12]

5 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [3/30/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F30%2F11&x=0&y=0 [3/30/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F30%2F11&x=0&y=0 [3/30/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F30%2F11&x=0&y=0 [3/30/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F30%2F07&x=0&y=0 [3/30/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F30%2F07&x=0&y=0 [3/30/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F30%2F07&x=0&y=0 [3/30/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F28%2F02&x=0&y=0 [3/30/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F28%2F02&x=0&y=0 [3/30/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F28%2F02&x=0&y=0 [3/30/12]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/30/12]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/30/12]

8 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]

 

 

 

 

 

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