Weekly Economic Update – Dec. 26, 2012

John J. Barrios, CFP® Presents:
WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE

“The road to someday leads to a town of nowhere.”

– Tony Robbins

    

  

WEEKLY TIP

Remember that you can give gifts of a present interest of up to $13,000 to anyone in 2012 without incurring federal gift tax. (For the 2012 tax year, the lifetime gift tax exclusion is set at $5,120,000.)

  

  

WEEKLY RIDDLE

George lives on the 26th floor of an apartment building. Each day, he takes the elevator down to lobby and goes to work. When he returns home, he stands in the lobby and presses the elevator button for the 20th floor, gets off on that floor and walks 6 flights up to his residence without stopping. Why doesn’t he just press the button for the 26th floor?

  

   

Last week’s riddle:

What do the letter T and an island have in common?

  

Last week’s answer:

They are both in the middle of water.

December 24, 2012

HOW LONG WILL THE FISCAL CLIFF IMPASSE LAST?

Hopes for a fiscal cliff deal dwindled last week as the “Plan B” proposal backed by House Speaker John Boehner failed to attract enough support. Friday, President Obama urged lawmakers to craft a smaller-scale bill that could at least protect long-term jobless benefits and sustain the Bush-era tax cuts for Americans making $250,000 or less. The “Plan B” bill proposed a tax hike for those making more than $1 million; the President has proposed raising taxes on those with incomes of $400,000 or greater. Negotiations resume this week; House Minority Leader Nancy Pelosi believes that “there’s still a chance” of a deal happening before 2013.1,2

BIG ANNUAL GAINS IN HOME SALES, HOUSING STARTS

Existing home sales rose 5.9% in November, according to the National Association of Realtors; they were up 14.5% from a year before. While housing starts fell 3.0% last month, the Census Bureau noted a 21.6% yearly gain in the indicator. November also saw a 3.6% rise in building permits, with the annual gain at 26.8%.3

MORE SPENDING, LESS OPTIMISM

Consumer spending advanced 0.4% in November, rebounding after a 0.1% retreat in October. The Bureau of Economic Analysis also cited a 0.6% gain in personal incomes last month. However, December’s final consumer sentiment survey from the University of Michigan hit a five-month low of 72.9, down 1.6% from November.4

HARD GOODS ORDERS TOP EXPECTATIONS

Durable goods orders rose 0.7% in November, the Census Bureau noted. Economists polled by MarketWatch had expected only a 0.1% overall gain.5

AS CLIFF TALKS STALL, STOCKS MANAGE TO RISE

The S&P 500 rose 1.17% last week even with uncertainty lingering on Wall Street. It settled Friday at 1,430.15. The NASDAQ (+1.67% to 3,021.21) and Dow (+0.43% to 13,190.84) also advanced across the last full trading week of 2012. Gold ended the week at just $1,660.10 an ounce on the COMEX after a $14.20 Friday gain. NYMEX crude settled at $88.66 per barrel Friday.4,6,7

THIS WEEK: Monday is Christmas Eve; the NYSE will close at 1:00pm EST and take Christmas Day off. October’s S&P/Case-Shiller Home Price Index arrives Wednesday. Thursday, the Conference Board’s latest consumer confidence index appears along with Census Bureau data on November new home sales. The National Association of Realtors releases its November pending home sales report on Friday.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+7.97

+8.95

-0.39

+5.50

NASDAQ

+15.96

+17.19

+2.45

+12.17

S&P 500

+13.72

+14.99

-0.73

+5.97

REAL YIELD

12/21 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.71%

-0.07%

1.84%

3.10%

 

Sources: thestreet.com, usatoday.com, bigcharts.com, treasury.gov – 12/21/124,6,8,9,10

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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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 – money.cnn.com/2012/12/21/investing/stocks-markets/index.html [12/21/12]

2 – www.marketwatch.com/story/boehner-not-walking-away-from-cliff-talks-2012-12-21 [12/21/12]

3 – money.msn.com/now/post.aspx?post=804aa73d-050d-4fe5-8985-28861e824d7d [12/21/12]

4 – www.thestreet.com/story/11799242/1/stock-market-story-dec-21.html [12/21/12]

5 – www.marketwatch.com/story/november-durable-goods-orders-jump-07-2012-12-21 [12/21/12]

6 – www.usatoday.com/money/markets/overview/ [12/21/12]

7 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [12/21/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F21%2F11&x=0&y=0 [12/21/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F21%2F11&x=0&y=0 [12/21/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F21%2F11&x=0&y=0 [12/21/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F21%2F07&x=0&y=0 [12/21/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F21%2F07&x=0&y=0 [12/21/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F21%2F07&x=0&y=0 [12/21/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F20%2F02&x=0&y=0 [12/21/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F20%2F02&x=0&y=0 [12/21/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F20%2F02&x=0&y=0 [12/21/12]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/21/12]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/21/12]

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

 

 

 

 

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