Weekly Economic Update – Jan. 30, 2012

John J. Barrios, CFP® Presents: 

WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE 

“Judge each day not by the harvest you reap but by the seeds you plant.”

– Robert Louis Stevenson

WEEKLY TIP

Spending and value should go hand in hand. Reduce or forego spending money on things that don’t bring you much value.

WEEKLY RIDDLE

It has no crown, yet when the chips are down it is more powerful than a king or queen. What is it?

Last week’s riddle:
I’m usually standing on a city sidewalk, and I’ll always stand by your car. But if you don’t feed me, you may get into trouble. What am I?

Last week’s answer:

A parking meter.

 

January 30, 2012 

ECONOMY GROWS 2.8% in Q4

While this is the best GDP reading since Q2 2010, the initial estimate from the Bureau of Economic Analysis still disappointed the markets. Many economists and investors were looking for growth of 3.0% or better. The majority of the growth actually came from increased inventories. Consumer spending rose 2.0% last quarter, with auto sales being the biggest factor. Durable goods orders did see 3.0% growth in December, putting them 45% above the recession low hit in April 2009.1,2,3

 

DIPS IN New & PENDING HOME SALES

The number of signed home sale contracts fell 3.5% in December, according to the National Association of Realtors. Separately, a Census Bureau report showed that new home sales declined 2.2% in December.4,5

 

MARQUEE sentiment INDEX at 11-MONTH PEAK
The Thomson Reuters/University of Michigan consumer sentiment index ended January at 75.0. This was way up from December’s 69.9 mark, and it beat the 74.1 reading forecast by economists surveyed by Reuters.6,7

 

PRECIOUS METALS GAIN ALLURE
At Friday’s COMEX close, gold was +10.56% YTD, copper +13.18% YTD and silver +21.05% YTD. Crude futures finished last week at $99.56 per barrel on the NYMEX, putting oil merely at +0.74% YTD. (Retail gas prices were +3.67% for the month as of Friday.)2

 

A STRONG MONTH COMES TO A CLOSE

With just a couple of trading days left, January is shaping up to be the best month for U.S. equities since October (see the YTD numbers below). Across last week, the S&P 500 rose 0.07% to 1,316.33 and the NASDAQ gained 1.07% to 2,816.55; the Dow slipped 0.47% to fall to 12,660.46.1

 

THIS WEEK: The December consumer spending report comes out Monday. On Tuesday, earnings reports arrive from Amazon.com, Broadcom, ExxonMobil, UPS, Pfizer and Eli Lilly – and we also get the latest S&P/Case-Shiller home price index and the Conference Board’s January consumer confidence poll. Wednesday, Q4 results roll in from Qualcomm, Electronic Arts, Aetna and Marathon Oil and the latest ISM manufacturing index appears. Besides new initial claims figures, Thursday brings Q4 results from Unilever, Sony, Deutsche Bank, Merck and Beazer Homes. Friday, the January unemployment report is out along with ISM’s service sector index and data on December factory orders; Clorox also issues Q4 results.

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +3.63 +5.59 +0.28 +2.83
NASDAQ +8.11 +2.22 +3.13 +4.49
S&P 500 +4.67 +1.29 -1.49 +1.62
REAL YIELD 1/27 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.18% 1.16% 2.48% 3.48%

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 1/27/121,8,9,10

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 – www.cnbc.com/id/46162429 [1/27/12]

2 – money.msn.com/market-news/post.aspx?post=6e802a2f-f50a-4ae4-948b-7bc9555ff5f6&_nwpt=1 [1/27/12]

3 – www.npr.org/2012/01/26/145895744/durable-goods-orders-signal-business-investment [1/26/12]

4 – www.reuters.com/article/2012/01/25/us-usa-economy-idUSTRE7BM0AB20120125 [1/25/12]

5 – www.startribune.com/business/138174364.html [1/26/12]

6 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [1/27/12]

7 – www.cnbc.com/id/46162624/ [1/27/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F27%2F11&x=0&y=0 [1/27/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F27%2F11&x=0&y=0 [1/27/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F27%2F11&x=0&y=0 [1/27/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F26%2F07&x=0&y=0 [1/27/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F26%2F07&x=0&y=0 [1/27/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F26%2F07&x=0&y=0 [1/27/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F28%2F02&x=0&y=0 [1/27/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F28%2F02&x=0&y=0 [1/27/12]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F28%2F02&x=0&y=0 [1/27/12]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/27/12]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/27/12]

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

 

 

 

 

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