Weekly Economic Update – Oct. 22, 2012

John J. Barrios, CFP® Presents:
WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE“Never worry about numbers. Help one person at a time and always start with the person nearest you.”     

– Mother Teresa

   

  

WEEKLY TIP

If you need to upgrade business equipment, consider making such capital purchases now to exploit the generous 2012 Section 179 deduction limit and first-year bonus depreciation allowance.

  

  

WEEKLY RIDDLE

Holly finds herself in a room without windows, holes or even cracks in the walls. She doesn’t have any tools and the door to the room is 4” thick and made of steel. Using only her hands, she manages to escape through the doorway. How does she do it?

  

   

Last week’s riddle:

What word describes a man who does not have all his fingers on one hand?

  

Last week’s answer:

Normal. A normal man does not have all ten of his fingers on one hand.

HOME SALES DECLINE, BUT HOUSING STARTS RISE 15%The National Association of Realtors recorded a 1.7% decrease in existing home sales in September. Reduced inventory might have played a role. The amount of homes on the market fell to a 5.9-month supply, a low unseen since March 2006. The median home price was $183,900 in September, up 11.3% from a year ago; it hasn’t been so high since 2005. September’s 15.0% leap in homebuilding took housing starts to an annual rate of 872,000 units, the best pace since July 2008 and a 34.8% increase since September 2012.1,2PUMP PRICES DRIVE UP CPI

Thanks largely to a 7% jump in gas prices, the federal government’s Consumer Price Index rose 0.6% in September. Still, the core CPI rose just 0.1% for the third straight month, and food prices rose only 0.1%. Annualized inflation came in at 2.0%.3

RETAIL SALES IMPROVE 1.1%

While the overall September gain announced by the Commerce Department was strong, the really notable number was the 0.9% rise in sales aside from gasoline, autos, and building materials. Electronics sales alone rose 4.5%.4

AFTER FRIDAY DIVE, STOCKS STILL LOG WEEKLY GAIN

Thanks mostly to earnings disappointments, the 25th anniversary of Black Monday turned out to be a harsh day for Wall Street. The Dow sank 205.43 Friday, yet the week was mixed – S&P 500, +0.32% to 1,433.19; NASDAQ, -1.26% to 3,005.62; DJIA, +0.11% to 13,343.51. NYMEX crude settled at $90.05 Friday, down 1.97% for the week; COMEX gold settled at $1,724.00 Friday after a 2.03% weekly descent. That put oil down 8.88% YTD and gold up 10.03% YTD.1,5

THIS WEEK: Hasbro, Caterpillar, Yahoo!, Peabody Energy and Texas Instruments all offer Q3 results on Monday. Tuesday, earnings reports from DuPont, Amgen, 3M, Xerox, Netflix, Facebook and UPS arrive. Wednesday, the Census Bureau has numbers on September new home sales, the Fed wraps up a policy meeting, the August FHFA home price index appears and AT&T, Boeing, Akamai, Zynga, Symantec, Eli Lilly and Bristol-Myers all report earnings. On Thursday, we learn about September pending home sales and hard goods orders, new initial jobless claims number are out, and AstraZeneca, ConocoPhillips, P&G, Aetna, AutoNation, Credit Suisse, Dow Chemical, Pulte, Sprint, Apple, Altria, Amazon.com, and Coinstar issue Q3 results. Friday brings the first estimate of Q3 GDP, the final University of Michigan consumer sentiment survey for the month, and earnings from Merck and Comcast.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+9.22

+15.98

-0.26

+6.03

NASDAQ

+15.37

+15.42

+2.06

+13.34

S&P 500

+13.96

+18.46

-0.90

+6.21

REAL YIELD

10/19 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.71%

0.23%

2.09%

3.10%

 

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 10/19/121,6,7,8

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 – money.msn.com/market-news/post.aspx?post=8e931d01-f2df-44d5-b3e3-0b133a0ac6dd [10/19/12]

2 – www.inman.com/news/2012/10/17/housing-starts-82-percent-2009-trough [10/17/19]

3 – articles.latimes.com/2012/oct/17/business/la-fi-inflation-20121017 [10/17/12]

4 – www.reuters.com/article/2012/10/15/us-usa-economy-idUSBRE89E0RI20121015 [10/15/12]

5 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [10/19/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F19%2F11&x=0&y=0 [10/19/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F19%2F11&x=0&y=0 [10/19/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F19%2F11&x=0&y=0 [10/19/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F19%2F07&x=0&y=0 [10/19/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F19%2F07&x=0&y=0 [10/19/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F19%2F07&x=0&y=0 [10/19/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F18%2F02&x=0&y=0 [10/19/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F18%2F02&x=0&y=0 [10/19/12]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F18%2F02&x=0&y=0 [10/19/12]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/19/12]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/19/12]

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

 

 

 

 

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