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Weekly Economic Update March 19, 2012

March 20, 2012

John Jastremski Presents:

Weekly Economic Update March 19, 2012

PRICES RISE MOST IN TEN MONTHS

Consumer prices were up 0.4% in February according to the Commerce Department, yet core inflation rose only 0.1%. A 6% jump in gasoline prices represented 80% of the Consumer Price Index’s biggest gain since April, while food prices were flat for the first time since July 2010. Economists polled by Bloomberg expected a 0.5% rise in CPI for the month. Producer prices also rose 0.4% last month, but prices for finished products were up but 0.1%. Annualized inflation was at 2.9% in February; annualized core CPI was at 2.2%.1,2

AN ILLUMINATING STATESIDE STRESS TEST

Applying a hypothetical “doomsday” scenario of the Dow losing half of its value, joblessness at 13% and home prices at 1996 levels, the Federal Reserve put 19 major U.S. banks through its annual stress test last week and found that 15 passed: American Express, Bank of America, Bank of New York Mellon, BB&T, CapitalOne, Fifth Third, Goldman Sachs, JP Morgan Chase, Keycorp, Morgan Stanley, PNC, Regions, State Street, U.S. Bancorp and Wells Fargo. Four lenders did not pass – the Fed concluded that Citigroup, SunTrust, Ally and MetLife would lose enough assets under the stress test scenario to pose systemic risk.3

CONSUMERS BUY MORE, SHOW LESS CONFIDENCE

The Census Bureau noted a 1.1% rise in retail sales for February and revised the January gain north to 0.6%. Elsewhere, the initial University of Michigan consumer sentiment survey for March showed a slight dip to 74.3 from 75.3 in late February.4,5

BEST WEEK FOR U.S. EQUITIES SINCE DECEMBER

The NASDAQ? It went +2.24% on the week to settle Friday at 3,055.26. The Dow? Up 2.40% in five days to end the week at 13,232.62. The S&P 500? +2.43% to 1,404.17 at Friday’s close. More good news: the CBOE VIX settled below 15 Friday after touching a 5-year low. Crude oil was down 0.32% for the week to $107.06, gold down 3.25% last week to $1,655.80.2,6

THIS WEEK: Monday, Adobe Systems issues Q4 results. Tuesday, February housing starts figures complement earnings from Tiffany, Krispy Kreme, Oracle and Cintas, and Fed chairman Ben Bernanke speaks at George Washington University. Wednesday, existing home sales figures are out for February as well as Q4 earnings from General Mills and Discover Financial. Thursday brings around round of initial claims, the Conference Board’s February leading indicators index and earnings from Nike, FedEx, Dollar General, Accenture and GameStop. Friday, we get data on February new home sales plus earnings from Darden Restaurants and KB Home.

% CHANGE

Y-T-D

1-YR   CHG

5-YR   AVG

10-YR   AVG

DJIA

+8.31

+13.94

+1.85

+2.47

NASDAQ

+17.28

+16.75

+5.75

+6.35

S&P 500

+11.65

+11.72

+0.25

+2.04

REAL YIELD

3/16   RATE

1 YR   AGO

5 YRS   AGO

10   YRS AGO

10 YR TIPS

-0.09%

0.85%

2.16%

3.48%

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 3/16/126,7,8,9

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

These returns do not include dividends.

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of John Jastremski, Jeremy Keating, Erik J Larsen, Frank Esposito, Patrick Ray, Robert Welsch, Michael Reese, Brent Wolf, Andy Starostecki and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.  

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, AT&T, Qwest, Chevron, Hughes, Northrop Grumman, Raytheon, ExxonMobil, Glaxosmithkline, Merck, Pfizer, Verizon, Bank of America, Alcatel-Lucent or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

John Jastremski is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

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