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WEEKLY ECONOMIC UPDATE – July 5, 2011

July 6, 2011
John Jastremski Presents:

 

WEEKLY ECONOMIC UPDATE

 

 

 

WEEKLY QUOTE

“People are definitely a company’s greatest asset. It doesn’t make any difference whether the product is cars or cosmetics. A company is only as good as the people it keeps.”
– Mary Kay Ash

 

 

WEEKLY TIP

If a friend or relative moves in with you, have an up-front talk about rent, who pays X percentage of the bills and how long they will stay. No one wants to argue over misunderstandings.

 

 

WEEKLY RIDDLE

What is the number missing within this sequence? 4, 7, 11, 18, 29, 47, __, 123, 199, 322.

 

 

Last week’s riddle:
Wilson, Xavier, Yolanda, and Zach are standing in line at the market. See if you can figure out their order from these clues: Yolanda is between Wilson and Xavier, Zach is next to Wilson, and Xavier is not first.

 

 

Last week’s answer:

Zach is first, Wilson is second, Yolanda is third, and Xavier is fourth.

July 5, 2011

 

SOFT SPENDING DURING THE SOFT PATCH
After ten consecutive months of gains, personal spending was flat for May and actually retreated 0.1% when adjusted for inflation. Weak auto sales may have been the biggest influence. Economists polled by Reuters had projected a 0.1% gain in the indicator. The Commerce Department did note that personal incomes rose 0.3% for the second straight month. The personal consumption expenditures (PCE) price index showed a 2.5% year-over-year advance.1

 

ISM INDEX SURPRISES

Analysts thought the Institute for Supply Management’s factory index would decline in June. It didn’t. The index rose from May’s 53.5 mark to 55.3. The U.S. was the only nation in the world whose benchmark manufacturing PMI rose last month.2

 

CONSUMER CONFIDENCE WANES

This was not surprising given recent headlines. The University of Michigan’s final June consumer sentiment poll slipped to 71.5 from May’s 74.3 reading, and the Conference Board’s June consumer confidence index also declined to 58.5 from last month’s revised 61.7 mark.2,3

 

HOME PRICES, HOME SALE AGREEMENTS INCREASE
The National Association of Realtors announced that pending home sales were up 8.2% for May, rebounding from April’s 7-month low. There were 17.0% more sales contracts signed last month than in June 2010, which represents the trough for pending home sales since the real estate downturn began. You can’t read too much into the April edition of the S&P/Case-Shiller Home Price Index; home prices in 20 major cities were up 0.7% overall, but it was the start of homebuying season.4,5

 

WALL STREET SHIFTS INTO RALLY MODE
Equities looked far more attractive after Greece passed austerity measures and U.S. indicators showed improvement. Here are the five-day gains from the stock market’s best week in nearly two years: NASDAQ, +6.15% to 2,816.03; S&P 500, +5.61% to 1,339.67; DJIA, +5.43% to 12,582.77.6

 

THIS WEEK: Monday being July 4, U.S. markets are closed. Tuesday, we get the Commerce Department report on May factory orders. Wednesday brings the June edition of the ISM service sector PMI. New initial and continuing claims reports arrive Thursday. Friday, we have the Labor Department’s unemployment report for June plus data on May wholesale inventories.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+8.68

+29.29

+2.57

+1.89

NASDAQ

+6.15

+34.01

+5.93

+3.11

S&P 500

+6.52

+30.40

+1.09

+0.83

REAL YIELD

7/1 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.77%

1.21%

2.54%

3.52%

 

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 7/1/116,7,8,9

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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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 www.theretirementgroup.com.

 

Citations.

1 – cnbc.com/id/43546166/ [6/27/11]

2 – blogs.wsj.com/marketbeat/2011/07/01/ism-much-better-than-expected/ [7/1/11]

3 – marketwatch.com/story/consumer-sentiment-declines-in-june-2011-07-01 [7/1/11]

4 – usatoday.com/money/economy/housing/2011-06-29-pending-home-sales_n.htm [6/29/11]

5 – blogs.forbes.com/morganbrennan/2011/06/29/what-can-homeowners-learn-from-case-shillers-home-price-index/ [6/29/11]

6 – cnbc.com/id/43608555 [7/1/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F1%2F10&x=0&y=0 [7/1/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F1%2F10&x=10&y=18 [7/1/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F1%2F10&x=0&y=0 [7/1/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F30%2F06&x=0&y=0 [7/1/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F30%2F06&x=0&y=0 [7/1/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F30%2F06&x=0&y=0 [7/1/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F2%2F01&x=0&y=0 [7/1/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F2%2F01&x=0&y=0 [7/1/11]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F2%2F01&x=0&y=0 [7/1/11]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/1/11]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/1/11]

9 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]

10 – montoyaregistry.com/Financial-Market.aspx?financial-market=the-balancing-act-weathering-the-burden-of-sudden-wealth&category=22  [7/03/11]

 

 

 

 

 

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