Weekly Economic Update – Oct. 1, 2012

John J. Barrios, CFP® Presents:

 

WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE

“Complexity is your enemy. Any fool can make something complicated. It is hard to keep things simple.”

     

– Richard Branson

   

  

WEEKLY TIP

Never leave money on the table when it comes to your 401(k) or 403(b). If your employer offers to match contributions, strive to contribute enough so that you get the match.

  

  

WEEKLY RIDDLE

What 3 numbers can you add together and get the same result as when you multiply them together? (All 3 numbers are whole and positive and none of them are double-digit.)

  

  

Last week’s riddle:

How many cubic yards of dirt are in a hole that is 9′ deep, 8′ long and 1′ wide?

  

Last week’s answer:

None – there are no cubic yards of dirt within a hole.

 CONSUMERS SPEND MORE – BECAUSE OF GAS PRICES

While the 0.5% August gain in consumer spending was the biggest in six months, it was mostly attributable to retail gas prices rising $0.28 for the month. The Commerce Department also noted a 0.3% drop in inflation-adjusted personal income in August, an occurrence unseen since November. Consumer spending on non-durable goods rose 1.7% in a month also marked by a 13.0% drop in durable goods orders – the biggest decrease in those bookings since January 2009, though core hard goods orders rose 1.1% last month.1,2

SEPTEMBER SEES MORE OPTIMISM

The Conference Board’s monthly consumer confidence gauge jumped to 70.3 in September from its revised 61.3 mark in August. Economists polled by MarketWatch thought it would come in at 65.0; instead, it reached a 7-month high. The University of Michigan’s final September consumer sentiment survey hit a 4-month peak of 78.3, a 4.0% improvement from August.1,3

EXISTING HOME PRICES RISE, NEW HOME SALES SLIP

The 1.2% annualized index gain in the S&P/Case-Shiller Home Price Index for July was the largest since August 2010. While new home sales fell 0.3% in August, the Census Bureau noted a 27.7% yearly gain in the category. At $256,900, the median new home price also hit its highest level since March 2007. Pending home sales slipped 2.6% in August, the National Association of Realtors stated.2,4,5

GREAT Q3 ENDS WITH DOWN WEEK

Last week, the Dow lost 1.05%, the NASDAQ lost 2.00% and the S&P 500 lost 1.33%. All of this aside, the Q3 performance of the major indices was terrific: Dow, +4.32% to 13,437.13; NASDAQ, +6.17% to 3,116.23; S&P, +5.76% to 1,440.67; Russell 2000, +4.88% to 837.45. The CBOE VIX fell 8.61% in the quarter. The launch of QE3 helped make September the third-best month for stocks (so far) in 2012. Oil ended the quarter at $92.01 a barrel, gold at $1,771.10 an ounce.6,7,8

THIS WEEK: The Institute for Supply Management’s September manufacturing PMI comes out on Monday; also, Ben Bernanke speaks about Federal Reserve policy in Indianapolis. Tuesday brings monthly auto sales figures from the Commerce Department. ISM’s September service sector PMI appears on Wednesday, plus earnings from Monsanto, Marriott and Family Dollar. The September FOMC minutes are published Thursday, along with new weekly jobless claims figures, the Challenger job-cut report for September and a report on August factory orders. The Labor Department will issue the September jobs report on Friday.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+9.98

+22.03

-0.66

+7.45

NASDAQ

+19.62

+25.07

+3.07

+15.99

S&P 500

+14.56

+25.16

-1.13

+7.41

REAL YIELD

9/28 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.77%

0.16%

2.27%

3.10%

 

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 9/28/126,9,10,11

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/49212032 [9/28/12]

2 – www.businessweek.com/news/2012-09-27/pending-sales-of-existing-homes-in-u-dot-s-dot-fell-2-dot-6-percent-in-august [9/27/12]

3 – articles.marketwatch.com/2012-09-25/economy/34071953_1_lynn-franco-confidence-readings-consumer-sentiment [9/25/12]

4 – www.sfgate.com/business/article/Case-Shiller-index-Home-values-climbing-3894161.php [9/25/12]

5 – www.lvrj.com/business/ap-photo-nybz130-171418791.html [9/26/12]

6 – www.cnbc.com/id/49210305 [9/28/12]

7 – www.cnbc.com/id/15839285 [9/28/12]

8 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [9/28/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F28%2F11&x=0&y=0 [9/28/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F28%2F11&x=0&y=0 [9/28/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F28%2F11&x=0&y=0 [9/28/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F28%2F07&x=0&y=0 [9/28/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F28%2F07&x=0&y=0 [9/28/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F28%2F07&x=0&y=0 [9/28/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F27%2F02&x=0&y=0 [9/28/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F27%2F02&x=0&y=0 [9/28/12]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F27%2F02&x=0&y=0 [9/28/12]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/28/12]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/28/12]

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

 

 

 

 

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