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Weekly Economic Update by John Jastremski

July 15, 2013

WILL THE EASING END SOONER, OR LATER?

Last Wednesday, Federal Reserve chairman Ben Bernanke lifted stocks by noting that the U.S. economy needed “highly accommodative monetary policy for the foreseeable future,” adding that the current 7.6% jobless rate “overstates the health of the labor market.” Remarks like these didn’t exactly suggest the Fed would scale back its asset purchases soon. The June Fed policy meeting minutes showed 11 of 12 Fed officials agreeing to sustain the central bank’s bond-buying campaign, with “about half” of these 11 envisioning QE3 wrapping up late this year. On Friday, Philadelphia Fed president Charles Plosser emerged from that camp, calling for a “gradual and predictable” end to the program before 2014.1,2,3

HOUSEHOLD SENTIMENT DECLINES A BIT

The initial July consumer sentiment index from the University of Michigan dipped mildly to 83.9. June’s final reading was 84.1, and economists polled by Reuters had expected the index to rise to 85.0.4

PRODUCER PRICES LEAP 0.8%

Minus food and energy prices, wholesale inflation wasn’t so pronounced in June. The core PPI rose just 0.2% last month. Analysts surveyed by Briefing.com had projected an overall PPI gain of 0.3%.4,5

WALL STREET GETS A BERNANKE BOUNCE

Dovish comments from the Fed chairman helped the S&P 500 to a new record close of 1,680.19 Friday. On the week, the S&P gained 2.96%. The NASDAQ rose 3.47% for the week to settle at 3,600.08 Friday. The Dow gained 2.17% last week and closed Friday at a fresh all-time peak of 15,464.30.4

THIS WEEK: Monday offers Q2 results from Citigroup, Census Bureau data on June retail sales and a Q2 GDP reading from China. The June CPI appears Tuesday, plus the latest NAHB housing market index, data on June industrial output and earnings from Goldman Sachs, Coca-Cola, Johnson & Johnson, Charles Schwab, Yahoo and CSX. Wednesday, Ben Bernanke begins two days of testimony in the Senate, a new Fed Beige Book arrives, and American Express, Bank of America, Bank of NY Mellon, Novartis, Abbott Labs, Mattel, eBay, IBM, Intel and SanDisk report earnings. Thursday offers earnings reports from Capital One, BlackRock, Morgan Stanley, United Health, Verizon, Nokia, Google, Microsoft, AMD and Chipotle, plus the latest initial claims figures and the Conference Board’s index of leading indicators. Friday, a G20 summit wraps up and Schlumberger, GE, Vodafone and Honeywell report Q2 results.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+18.01

+22.99

+7.86

+6.96

NASDAQ

+19.23

+25.61

+12.16

+10.76

S&P 500

+17.81

+25.88

+7.11

+6.83

REAL YIELD

7/12 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.55%

-0.58%

1.48%

1.88%

Sources: cnbc.com, bigcharts.com, treasury.gov – 7/12/134,6,7,8

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 – cnbc.com/id/100877586 [7/10/13]

2 – cnbc.com/id/100757576 [7/12/13]

3 – blogs.barrons.com/incomeinvesting/2013/07/10/treasury-yields-creep-higher-amid-parsing-of-fed-minutes-bernanke-speech/ [7/10/13]

4 – cnbc.com/id/100882518 [7/12/13]

5 – briefing.com/investor/calendars/economic/2013/07/08-12 [7/12/13]

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

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

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

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F11%2F08&x=0&y=0 [7/12/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F11%2F08&x=0&y=0 [7/12/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F11%2F08&x=0&y=0 [7/12/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F11%2F03&x=0&y=0 [7/12/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F11%2F03&x=0&y=0 [7/12/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F11%2F03&x=0&y=0 [7/12/13]

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

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

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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.

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

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