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Weekly Economic Update 7/16/12

July 16, 2012

CONSUMER SENTIMENT CONTINUES TO SLIP

Analysts polled by Reuters had expected the University of Michigan’s initial July consumer sentiment index to show a minor gain. That didn’t happen: instead of the projected 0.2% rise to 73.4, the index fell 1.2% to 72.0, a low unseen since December. An exclamation point within the data: just 19% of Americans polled felt that their financial situation would improve within the next year, a record low for the survey. The barometer of current economic conditions did improve to 83.2 from 81.5.1

PRODUCER PRICES RISE 0.1% in JUNE

Given the 0.9% decline in energy prices last month, this overall gain in the Producer Price Index was surprising. The cost of gasoline increased 1.9% last month and food prices climbed as well, influencing the advance. Core PPI rose 0.2% in June.1

OIL, GOLD & RETAIL GAS PRICES MOVE NORTH

Pump prices increased 0.9% last week, according to AAA’s Daily Fuel Gauge Report; they are up 1.0% so far for the month. NYMEX crude gained 3.14% last week to settle Friday at $87.10 a barrel; gold advanced 0.86% on the COMEX for the week, with those futures settling Friday at $1,592.50 per ounce.2

DOW CLIMBS 200 POINTS ON FRIDAY THE 13TH

Why? China’s latest annualized GDP estimate (+7.6%) was not as bad as forecasters expected, and Q2 results from JPMorgan and Wells Fargo were encouraging, even as Moody’s cut Italy’s credit rating Friday to two notches above junk level. After its 204-point Friday gain, the DJIA settled at 12,777.09. The NASDAQ ended Friday at 2,908.47, while the S&P 500 closed at 1,356.77. Across the week, the Dow went +0.04%, the S&P +0.15% and the NASDAQ -0.98%.2,3,4

THIS WEEK: Monday, Census Bureau data on June retail sales arrives plus Q2 results from Citigroup, Charles Schwab and Gannett. Tuesday, the June CPI and June industrial output data appear, Ben Bernanke starts two days of testimony in Congress, and earnings reports emerge from Yahoo!, Intel, Coca-Cola, Goldman Sachs, Johnson & Johnson and Mattel. On Wednesday, a new Fed Beige Book is out, June housing starts and building permits figures arrive and we have earnings from Bank of America, U.S. Bancorp, American Express, PNC Bank, Honeywell, Qualcomm, Yum! Brands and eBay. Thursday, NAR offers June existing home sales data, new initial claims numbers appear and Q2 results arrive from Philip Morris, Microsoft, Morgan Stanley, Novartis, SanDisk, Capital One, Nokia, Travelers, Verizon, BB&T, Google, AMD, Chipotle, E*Trade and Southwest Airlines. Friday, we have IPOs from Kayak and Fender and Q2 earnings from GE and Xerox.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+4.58

+2.29

-1.63

+4.71

NASDAQ

+11.64

+3.99

+1.49

+11.18

S&P 500

+7.89

+2.96

-2.52

+4.73

REAL YIELD

7/13 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.59%

0.59%

2.73%

3.10%

 

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 7/13/123,5,6,7

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 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 – http://www.reuters.com/article/2012/07/13/usa-economy-idUSL2E8ID23U20120713 [7/13/12]

2 – money.msn.com/market-news/post.aspx?post=96140b67-efa5-49c8-9ffc-85cd17eaea41 [7/13/12]

3 – http://www.cnbc.com/id/48174616 [7/13/12]

4 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [7/13/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F13%2F11&x=0&y=0 [7/13/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F13%2F11&x=0&y=0 [7/13/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F13%2F11&x=0&y=0 [7/13/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F13%2F07&x=0&y=0 [7/13/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F13%2F07&x=0&y=0 [7/13/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F13%2F07&x=0&y=0 [7/13/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F12%2F02&x=0&y=0 [7/13/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F12%2F02&x=0&y=0 [7/13/12]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F12%2F02&x=0&y=0 [7/13/12]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/13/12]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/13/12]

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

 

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of John Jastremski, 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.


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

 

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