WEEKLY ECONOMIC UPDATE -December 19, 2011

John J. Barrios, CFP® Presents:

WEEKLY QUOTE

“Comedy is simply a funny way of being serious.”

– Peter Ustinov


WEEKLY TIP

About to do some holiday shopping? Try keeping your credit cards at home. The interest you save can be a financial gift to yourself.

WEEKLY RIDDLE

A man leaves home and makes three left turns. He comes home again and sees two masked men waiting for him, but he jogs straight toward them with a smile as others cheer. Why is this man so unafraid?

Last week’s riddle:
Seven people stand in a square room which measures 30′ x 30′. Each one can see the entire room and everyone in it without making any physical movement (aside from eye movement). Where inside this room can you place an apple so that all but one person can see it?

Last week’s answer:

Place the apple on one person’s head.

 

December 19, 2011

JOBLESS CLAIMS FALL TO 3½-YEAR LOW
Last Thursday, the Labor Department announced that 366,000 Americans filed initial jobless claims in the week ending December 10, the lowest weekly figure since March 2008. This was a drop of 19,000 from the preceding week and refuted the expectations of some economists. This may be a sign that the jobless rate, currently at 8.6%, could be poised to fall further.1

 

HAS INFLATION PEAKED?
The federal government’s Consumer Price Index was flat in November after a 0.1% retreat in October. While core inflation rose 0.2% last month, the Federal Reserve now expects 1.7% inflation across 2012 compared to a projected 2.8% for 2011. Producer prices were up 0.3% in November; core PPI advanced 0.1%. The year-over-year rise in wholesale prices was 5.7%, the smallest 12-month gain since March.2,3

 

RETAIL SALES RISE 0.2% in NOVEMBER
While many economists hoped for a bigger advance, the November increase marked the sixth straight monthly gain for the indicator. Lower gas prices may have left consumers with greater discretionary funds: on Friday, AAA said a gallon of regular unleaded averaged $3.25 nationally, 18.4% below a peak hit in early May.2,4

 

GOLD & OIL TAKE A HIT
Gold lost a whopping 6.93% last week; oil fell 5.49%. Gold settled at $1,597.90 on the COMEX and oil closed Friday’s NYMEX trading day at $93.87.2

STOCKS PULL BACK
Citing “the absence of a credible financial backstop” in the EU debt crisis, Fitch Ratings downgraded France Friday and placed the credit ratings of Spain and Italy on review. It was a wan note to end a rough week, as these numbers point out: DJIA, -2.61% to 11,866.39; S&P 500, -2.83% t0 1,219.66; NASDAQ, -3.46% to 2,555.33.2,5,6

 

THIS WEEK: No major U.S. economic releases are scheduled for Monday. On Tuesday, we learn about November housing starts and earnings reports arrive from Nike, Oracle, ConAgra and General Mills. Wednesday brings the NAR report on November existing home sales plus earnings out of CarMax, Bed Bath & Beyond and Walgreen’s. Thursday we get the final December consumer sentiment survey from the University of Michigan, the Conference Board’s LEI for November, initial claims numbers and the final 3Q GDP estimate from Washington. Friday brings three big reports: November new home sales, durable goods orders and consumer spending.

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +2.50 +3.19 -0.93 +2.00
NASDAQ -3.68 -3.11 +0.80 +2.86
S&P 500 -3.02 -1.87 -2.91 +0.75
REAL YIELD 12/16 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.05% 1.15% 2.29% 3.50%

 
Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 12/16/112,7,8,9

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.

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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/2011/12/15/news/economy/unemployment_benefits/index.htm [12/15/11]

2 – money.msn.com/market-news/post.aspx?post=3a7b4ee5-c1fb-4eda-8bd3-901a162aeaed [12/16/11]

3 – www.latimes.com/business/la-fi-wholesale-prices-20111215,0,6933077.story [12/15/11]

4 – www.usatoday.com/money/industries/retail/story/2011-12-13/retail-sales-november/51866224/1 [12/13/11]

5 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [12/16/11]

6 – www.brisbanetimes.com.au/business/world-business/france-rating-outlook-lowered-spain-italy-on-review-fitch-20111217-1ozhg.html [12/17/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F16%2F10&x=0&y=0 [12/16/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F16F2%2F10&x=10&y=18 [12/16/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F16%2F10&x=0&y=0 [12/16/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F15%2F06&x=0&y=0 [12/16/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F15%2F06&x=0&y=0 [12/16/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F15%2F06&x=0&y=0 [12/16/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F17%2F01&x=0&y=0 [12/16/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F17%2F01&x=0&y=0 [12/16/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F17%2F01&x=0&y=0 [12/16/11]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/16/11]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/16/11]

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

 

 

 

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