Weekly Economic Update – May 14, 2012

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

“He who is not courageous enough to take risks will accomplish nothing in life.”
– Muhammad Ali

WEEKLY TIP

If you and your partner aren’t married, it might be prudent to create a domestic partnership agreement that states how expenses are shared, how assets are owned, and how those assets should be distributed in the event of your death(s) or the dissolution of the relationship.

 

 

WEEKLY RIDDLE

 

We know that a seahorse isn’t a horse, and we know that a silverfish isn’t a fish. For that matter, a snakehead isn’t a snake – but what is it?

 

 

Last week’s riddle:

About 90% of this country’s land area is made up of arid tan desert, yet its flag is solid green – in fact, at present it is the only nation in the world with a flag containing just one color. What nation is this?

 

 

Last week’s answer:

Libya.

CONSUMER SENTIMENT HITS A 4-YEAR PEAK

May’s initial Thomson Reuters/University of Michigan consumer sentiment survey came in with an index reading of 77.8, the highest mark since January 2008. The current economic conditions sub-index rose to 87.3 from last month’s final 82.9 reading. Descending oil and gas prices may have been factors promoting some optimism.1

BIGGEST DROP IN PPI In 6 MONTHS
Falling energy prices influenced this development as well. Producer prices retreated 0.2% in April according to the Labor Department. Economists surveyed by Reuters had forecast no change. The bulk of the retreat was attributed to the 1.4% April drop in energy costs. The PPI has only risen 1.9% in the last 12 months, the smallest annualized wholesale price inflation recorded since October 2009.2,3

GOLD & OIL PRICES RETREAT

After anxieties emerged last week about a China slowdown, the broad commodities market took a hit. So at Friday’s close, gold had fallen 3.72% across five trading days to $1,584.00 per ounce while crude futures had slipped 2.40% to $96.13 a barrel. As of Friday evening, gold was +1.10% YTD and oil was -2.73% YTD.2

 

NEW DOUBTS IN THE EU AFFECT STOCKS

Eurozone elections brought new worries about whether Greece would abide by austerity cuts and stick with the euro. Efforts to form a coalition government in Greece stalled last week, and French president Nicolas Sarkozy was defeated in his reelection bid by socialist candidate Francois Hollande. Factor in the usual spring thoughts about whether stocks are ready to pull back, and the weekly losses were as follows: S&P 500, -1.15% to 1,353.39; DJIA, -1.67% to 12,820.60; NASDAQ, -0.76% to 2,933.82.2,4,8

THIS WEEK: Facebook’s IPO is scheduled for Friday, and there are plenty of other news items on tap. On Monday, Groupon comes out with Q1 results. Tuesday, the April CPI appears plus data on April retail sales and earnings from JCPenney, TJX, Dick’s Sporting Goods, Saks and Home Depot. Wednesday brings data on April housing starts and industrial output, the April 25 FOMC minutes, and Q1 results from Deere, Abercrombie & Fitch, Target, Staples and Limited Brands. The Conference Board’s April consumer confidence index and new initial claims figures are out Thursday, joined by Q1 earnings from Wal-Mart, Dollar Tree, Ross Stores, Gap, Aeropostale and Sears. As Facebook starts trading on Friday, a G8 summit also starts at Camp David; Q1 results also arrive from Ann, Inc. (formerly Ann Taylor).

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+4.94

+1.51

-0.76

+2.90

NASDAQ

+12.62

+3.12

+2.90

+8.33

S&P 500

+7.62

+0.84

-2.02

+2.83

REAL YIELD

5/11 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.28%

0.76%

2.30%

3.48%

 

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 5/11/122,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

 

Please feel free to forward this article to family, friends or colleagues.
If you would like us to add them to our distribution list, please reply with their address.
We will contact them first and request their permission to add them to our list.

 

 
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.marketwatch.com/story/consumer-sentiment-in-may-at-post-recession-high-2012-05-11 [5/11/12]

2 – money.msn.com/market-news/post.aspx?post=eb995dbd-6940-465b-8bcb-3488ef1c2b7e [5/11/12]

3 – www.nytimes.com/2012/05/12/business/economy/us-wholesale-inflation-falls.html [5/12/12]

4 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [5/11/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F11%2F11&x=0&y=0 [5/11/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F11%2F11&x=0&y=0 [5/11/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F11%2F11&x=0&y=0 [5/11/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F11%2F07&x=0&y=0 [5/11/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F11%2F07&x=0&y=0 [5/11/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F11%2F07&x=0&y=0 [5/11/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F10%2F02&x=0&y=0 [5/11/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F10%2F02&x=0&y=0 [5/11/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F10%2F02&x=0&y=0 [5/11/12]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/11/12]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/11/12]

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

8 – www.sacbee.com/2012/05/10/4483985/as-europes-economic-outlook-darkens.html [5/11/12]

 

 

 

 

 

Connect

John Barrios Linked InJohn Barrios Facebook