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Weekly Economic Update 5/6

May 6, 2013

UNEMPLOYMENT EDGES DOWN TO 7.5%

April brought a rebound in hiring. Employers added 165,000 jobs, and so the unemployment rate reached a four-year low. (The Labor Department also revised March’s job gains upward to 138,000.) Payrolls have now expanded by an average of 189,000 jobs a month during the last six months.1

CONSUMER SPENDING, OUTLOOK IMPROVE

Household spending increased 0.2% in March, the Commerce Department noted – part of a broader 3.2% advance for the first quarter. The Conference Board’s April consumer confidence index soared 6.2 points to 69.1, far exceeding the 61.0 consensus forecast of economists polled by Bloomberg.2

STRONG SIGNALS OF A HOUSING COMEBACK

Home equity is definitely being restored: the latest 20-city S&P/Case-Shiller Home Price Index (February) shows a 9.3% year-over-year increase, the largest annual gain recorded in six years. The National Association of Realtors reported a 1.5% March gain in its pending home sales index, with the yearly gain at 7.0%.2,3

IS MANUFACTURING COOLING DOWN?

The Institute for Supply Management’s April factory index came in at 50.7 last week, the weakest reading in nine months and down from 0.6 from March. ISM’s April service sector index also declined 1.3 points off the March reading of 53.1.4

S&P TOPS 1,600, FED REASSURES INVESTORS

Last week brought major gains for the Dow (+1.78% to 14,973.96), S&P 500 (+2.03% to 1,614.42) and NASDAQ (+3.03% to 3,378.63). On May 1, the Federal Reserve said it would keep buying $85 billion in bonds per month for the near future, noting that the pace of asset purchases could even increase if needed.5

THIS WEEK: Tyson Foods, Sysco, Anadarko and First Solar report quarterly results Monday. Tuesday, the market awaits earnings from WholeFoods, Walt Disney, Trip Advisor, HSBC, DirecTV, Electronic Arts, Marathon Oil, Symantec, Live Nation, WebMD and Zillow. Wednesday, earnings are in from Liberty Interactive, Green Mountain Coffee, Activision Blizzard, AOL, Sodastream, Wendy’s, Toyota, Liberty Media, Groupon, Monster Beverage, NewsCorp, Tesla Motors and Transocean. Thursday brings a report on March wholesale inventories, the latest initial jobless claims figures, and quarterly results from Sony, Nvidia, Dish Network, Priceline.com and Dean Foods. On Friday, Fed chairman Ben Bernanke speaks at a Chicago banking conference and ArcelorMittal and GoldFields announce earnings.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+14.27

+13.38

+2.93

+7.45

NASDAQ

+11.89

+11.72

+7.28

+12.48

S&P 500

+13.20

+16.01

+2.84

+7.36

REAL YIELD

5/3 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.53%

-0.27%

1.53%

2.19%

 

Sources: cnbc.com, bigcharts.com, treasury.gov – 5/3/135,6,7,8

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. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 – bloomberg.com/news/2013-05-03/payrolls-in-u-s-rise-165-000-as-unemployment-drops-to-7-5-.html [5/3/13]

2 – bloomberg.com/news/2013-04-30/consumer-confidence-in-u-s-rose-more-than-forecast-in-april.html [4/30/13]

3 – csmonitor.com/Business/Paper-Economy/2013/0429/Pending-home-sales-climb-1.5-percent-in-March [4/29/13]

4 – ism.ws/ISMReport/NonMfgROB.cfm [5/3/13]

5 – cnbc.com/id/100704308 [5/3/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F3%2F12&x=0&y=0 [5/3/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F3%2F12&x=0&y=0 [5/3/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F3%2F12&x=0&y=0 [5/3/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F2%2F08&x=0&y=0 [5/3/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F2%2F08&x=0&y=0 [5/3/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F2%2F08&x=0&y=0 [5/3/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F2%2F03&x=0&y=0 [5/3/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F2%2F03&x=0&y=0 [5/3/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F2%2F03&x=0&y=0 [5/3/13]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/3/13]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/3/13]

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

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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