Weekly Economic Update -Dec. 3, 2012

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

“It’s not what happens to you that determines how far you will go in life; it is how you handle what happens to you.”

– Zig Ziglar

   

  

WEEKLY TIP

If you want to leave your company on your terms, make sure you leave enough time to carry out your exit strategy effectively. Think five years at minimum.

  

  

WEEKLY RIDDLE

Liz went into a convenience store at 1:58am on a Sunday morning to get a coffee. She drove six miles away and then returned to the store to get a lotto ticket … also at 1:58am. The store’s clock was working perfectly, so how could it be 1:58am again when she returned?

  

   

Last week’s riddle:

Ray slipped off of a 30-foot escalator and landed on a sidewalk. He was embarrassed, yet uninjured. How could this be?

  

Last week’s answer:

He slipped off the escalator’s bottom step.

SPENDING DOWN, CONFIDENCE & GDP UP                                 December 3, 2012

 

Personal spending decreased 0.2% in October, the first monthly retreat since June, possibly attributable to Superstorm Sandy. (Consumer spending dipped 0.3% when adjusted for inflation.) Personal income was flat in October for the first time since April. Even so, November’s Conference Board index of consumer confidence measured 73.7, a 57-month high. The Bureau of Economic Analysis revised Q3 GDP up to 2.7%, although federal spending and restocking of goods were the major factors in the quarter’s improved output.1,2

ANOTHER ROUND OF POSITIVE HOUSING NEWS

New home sales have increased 17.2% in the last 12 months, even with a 0.3% retreat in October. In addition to that news from the Census Bureau, the latest edition of the S&P/Case-Shiller Home Price Index showed home values in the third quarter rising 3.6% from Q3 2011. The National Association of Realtors reported a 5.2% jump in its pending home sales index in October, which at 104.8 reached its highest point since March 2007.3,4,5

BUSINESSES KEEP PURCHASING AS CLIFF NEARS

Durable goods orders were flat in October, but they rose 1.5% minus transportation orders. Increasing orders for electrical components (+4.1%), computers (+0.9%) and machinery (+2.9%) showed confidence on the part of companies.6

NEGOTIATIONS STALL, BUT STOCKS ADVANCE

Even with very little progress in the fiscal cliff talks in Washington, the S&P 500 managed a 0.50% gain last week to reach 1,416.25 at the closing bell on Friday. The NASDAQ (+1.46% to 3,010.24) and Dow (+0.12% to 13,025.04) also advanced last week. The NASDAQ and S&P respectively gained 1.11% and 0.29% in November; the DJIA, on the other hand, slipped 0.55% on the month. Gold closed Friday at $1,710.90; oil settled Friday at $88.91.7,8,9

THIS WEEK: ISM’s November manufacturing index appears Monday, along with Commerce Department data on November auto sales and Q3 results from Pep Boys. Tuesday brings earnings from Pandora, Toll Bros., BigLots! and AutoZone. Wednesday, ISM’s November service sector index is out plus data on October factory orders and earnings from Men’s Wearhouse. Thursday, the latest weekly jobless claims numbers arrive and the European Central Bank and Bank of England make policy announcements; earnings reports are in from Smithfield Foods, Lululemon and H&R Block. Friday, the November jobs report arrives; so does the preliminary December consumer sentiment index from the University of Michigan.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+6.61

+8.13

-0.52

+4.64

NASDAQ

+15.55

+14.88

+2.63

+10.36

S&P 500

+12.62

+13.58

-0.88

+5.13

REAL YIELD

11/30 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.79%

0.03%

1.63%

3.10%

 

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 11/30/127,10,11,12

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.foxbusiness.com/economy/2012/11/30/consumer-spending-makes-unexpected-fall-in-october/ [11/30/12]

2 – www.reuters.com/article/2012/11/27/us-usa-economy-instant-idUSBRE8AQ0SP20121127 [11/27/12]

3 – www.latimes.com/business/la-fi-mo-new-home-sales-20121128,0,3039964.story [11/28/12]

4 – blogs.wsj.com/economics/2012/11/27/price-rise-shows-a-better-balanced-u-s-housing-market/ [11/27/12]

5 – www.philly.com/philly/business/20121130_Pending_home_sales_in_Oct__hit_nearly_6-year_high.html [11/30/12]

6 – news.investors.com/economy/112712-634800-fiscal-cliff-fears-dont-sink-durable-goods-confidence.htm [11/27/12]

7 – www.cnbc.com/id/50025105 [11/30/12]

8 – online.wsj.com/article/BT-CO-20121130-711977.html [11/30/12]

9 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [11/30/12]

10 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F30%2F11&x=0&y=0 [11/30/12]

10 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F30%2F11&x=0&y=0 [11/30/12]

10 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F30%2F11&x=0&y=0 [11/30/12]

10 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F30%2F07&x=0&y=0 [11/30/12]

10 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F30%2F07&x=0&y=0 [11/30/12]

10 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F30%2F07&x=0&y=0 [11/30/12]

10 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F29%2F02&x=0&y=0 [11/30/12]

10 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F29%2F02&x=0&y=0 [11/30/12]

10 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F29%2F02&x=0&y=0 [11/30/12]

11 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/30/12]

11 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/30/12]

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

 

 

 

 

 

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