Weekly Economic Update – Aug. 20, 2012

John J. Barrios, CFP® Presents:

 

WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE

“Loyalty to a petrified opinion never yet broke a chain or freed a human soul.”

– Mark Twain


WEEKLY TIP

We all have impulses that can make us spend more and save less. Recognizing them can help us to improve our financial behaviors.

 

  

WEEKLY RIDDLE

What is the longest word in the English language to have only one vowel repeated? (Hint: It has 16 total letters and the vowel is repeated 4 times).

  

  

Last week’s riddle:

A common English word refers to a person or thing not being in a place. But just by inserting a space within it, you can get two words meaning that a person or thing is present. What is this word?

  

Last week’s answer:

Nowhere. It can become now here by inserting a space.

CPI FLAT FOR A SECOND CONSECUTIVE MONTH

In July, the federal Consumer Price Index showed no overall advance. That was the case in June as well, and that might just bolster the case for easing at the Federal Reserve. Consumer prices rose only 1.4% annually, the smallest increase since the November 2010 index. Core CPI (minus food and energy costs) rose 0.1% last month. As for wholesale prices, they rose 0.3% in July – the largest jump in five months, even as wholesale gas prices slipped 3.1%.1,2

RETAIL SALES IMPRESS

American retail purchases soared 0.8% in July after a (downwardly revised) 0.7% retreat in June. It was a real sea change – the first positive month for the category since March. The monthly increase in retail gasoline sales was just 0.5%, which had little effect on the overall gain.3

Housing starts DIP; permits hit  4-YEAR peak

U.S. builders broke ground on 1.1% fewer projects in July. The good news: permits for new construction hit a pace of 812,000, a high unseen since August 2008.4

CONSUMERS ARE FEELING A BIT BETTER

Economists polled by MarketWatch expected a dip in August’s initial University of Michigan consumer sentiment index. Instead, it rose 1.3% to 73.6 – the best reading since May. The index’s gauge of current economic conditions improved to 87.6 in August from 82.7 in July.5

THE SUMMER RALLY ROLLS ON

Feeling slightly bullish? You aren’t alone. The Dow and S&P 500 have now advanced for six straight weeks, and the CBOE VIX (the “fear index”) closed at 13.47 Friday, its lowest mark in five years. The numbers for the week: DJIA, +0.51% to 13,275.20; S&P 500, +0.87% to 1,418.16; NASDAQ, +1.84% to 3,076.59. Gold lost 0.21% on the COMEX for the week while oil soared 3.38% on the NYMEX. Gold settled Friday at $1,619.40, oil at $96.01.6,7,8

THIS WEEK: On Monday, Lowe’s reports Q2 earnings. Tuesday, Best Buy, Dell and Meditronic follow suit. Wednesday brings the National Association of Realtors report on July’s existing home sales, the July 31 FOMC minutes and earnings from Hewlett-Packard. In addition to weekly jobless claims, Thursday offers July data on new home buying, a new FHFA home price index and Q2 results from Hormel. Friday, the report on July’s durable goods orders arrives along with the latest USDA outlook on food prices.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+8.66

+16.34

+0.30

+5.12

NASDAQ

+18.10

+22.50

+4.56

+12.61

S&P 500

+12.77

+18.78

-0.38

+5.27

REAL YIELD

8/17 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.43%

0.01%

2.45%

3.10%

 

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 8/17/126,9,10,11

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. 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.reuters.com/article/2012/08/15/usa-economy-idINL2E8JF2C720120815 [8/15/12]

2 – www.chicagotribune.com/business/sns-rt-us-economy-ppibre87d0gq-20120814,0,3794223.story [8/14/12]

3 – articles.marketwatch.com/2012-08-14/economy/33191357_1_sales-at-gasoline-stations-furniture-store-sales-retail-sales [8/17/12]

4 – www.sfgate.com/business/bloomberg/article/Housing-Starts-in-U-S-Decline-as-Permits-Reach-3793297.php [8/16/12]

5 – www.marketwatch.com/story/consumer-sentiment-rises-in-august-2012-08-17-10103922 [8/17/12]

6 – www.cnbc.com/id/48701551 [8/17/12]

7 – money.msn.com/market-news/post.aspx?post=2dab9cc0-86e7-48a1-b678-b50cb7e539d7 [8/17/12]

8 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [8/17/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F17%2F11&x=0&y=0 [8/17/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F17%2F11&x=0&y=0 [8/17/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F17%2F11&x=0&y=0 [8/17/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F17%2F07&x=0&y=0 [8/17/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F17%2F07&x=0&y=0 [8/17/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F17%2F07&x=0&y=0 [8/17/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F16%2F02&x=0&y=0 [8/17/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F16%2F02&x=0&y=0 [8/17/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F16%2F02&x=0&y=0 [8/17/12]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/17/12]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/17/12]

11 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]

 

 

 

 

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