Skip to content

WEEKLY ECONOMIC UPDATE – July 18, 2011

July 19, 2011
John Jastremski  Presents:

 

WEEKLY ECONOMIC UPDATE – July 18, 2011

 

 

 

WEEKLY QUOTE

“The task of the modern educator is not to cut down jungles, but to irrigate deserts.”

– C.S. Lewis

 

 

WEEKLY TIP

Before you buy a car, remember that it is a depreciating asset with insurance and repair costs attached. What might the total monthly cost of ownership be? Here’s an old rule of thumb: double the sale price and divide it by 60, assuming you’ll keep a new or late-model vehicle for 5 years.

 

 

WEEKLY RIDDLE

Name two words in the English language that have the letter I twice in the middle of the word.

 

 

Last week’s riddle:
A librarian finds that pages have been ripped out of a novel. Pages 28, 29, 148, 211 and 212 are torn out. Given this, how many separate sheets of paper have been torn from the book?

 

 

Last week’s answer:

Four sheets of paper (not five). Pages 211 and 212 are on opposite sides of the same sheet of paper.

July 18, 2011

 

DEBT ISSUES DOMINATE THE HEADLINES
Friday, President Obama reassured the media that Democrats and Republicans had “enough time” to “create a package that solves the deficit and debt.” While Congress needs to hike the debt cap by $2.4 trillion to enable federal borrowing through the end of 2012, Republican leaders want an equivalent federal spending cut linked to such a move. This week, House Republicans intend to vote on a plan to accomplish both goals, reliant on a constitutional amendment requiring a balanced federal budget. House Minority Leader Nancy Pelosi (D-CA) calls the measure “outrageous.” Another plan offered by Senate Minority Leader Mitch McConnell (R-KY) would give the President more autonomy to lift the debt cap. In Europe, Italy’s parliament passed austerity measures to cut $99 billion from that nation’s deficit by 2014.1,2,3

 

CONSUMER PRICES RETREAT 0.2% in JUNE

This marks the first dip in the Consumer Price Index in 12 months. The big reason? Gasoline prices fell 6.8% last month. Stripping out food and energy prices, core CPI rose 0.3% in June (as it did in May). All this brought annualized inflation to 3.6% (1.6% in core terms). Producer prices also decreased last month – June’s PPI fell 0.4%, the first monthly decline in a year.4

 

CONSUMERS BUY A BIT MORE, FEEL WORSE

Consumer sentiment has plummeted. The initial July Thomson Reuters/University of Michigansurvey came in at 63.8, the lowest reading in 28 months. Census Bureau data had retail sales improving 0.1% in June and 8.1% annually.5,6

 

GOLD PUSHES TOWARD $1,600
Gold settled at a new all-time peak Friday: $1,589.80 an ounce. That capped a 7.25% gain across two weeks, 3.15% of it coming last week.7

 

STOCKS PULL BACK
Here is how the major indices performed last week: S&P 500, -2.06% to 1,316.14; DJIA, -1.40% to 12,479.73; NASDAQ, -2.45% to 2,789.80.8

 

THIS WEEK: Monday offers 2Q results from IBM and Halliburton. Tuesday, we have earnings reports from Wells Fargo, Goldman Sachs, Apple, Yahoo, Coca-Cola and Bank of America plus data on June housing starts. Wednesday, we learn about June’s existing home sales and get earnings from Intel, Altria, Qualcomm, AmEx and eBay. Thursday brings 2Q results from Nokia, AT&T, Morgan Stanley, PepsiCo, Microsoft, AMD and SanDisk plus weekly initial and continuing claims figures. Friday, we have earnings from Caterpillar, GE, Honeywell, McDonalds and Verizon.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+7.79

+20.47

+3.24

+1.92

NASDAQ

+5.16

+24.04

+7.39

+3.75

S&P 500

+4.65

+20.03

+1.29

+0.95

REAL YIELD

7/15 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.61%

1.21%

2.50%

3.50%

 

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 7/15/118,9,10,11

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

These returns do not include dividends.

 

Please feel free to forward this article to family, friends or colleagues.
If you would like us to add them to our distribution list, please reply with their address.
We will contact them first and request their permission to add them to our list.

 

 
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 – money.cnn.com/2011/07/15/markets/markets_newyork/ [7/15/11]

2 – online.wsj.com/article/BT-CO-20110715-711566.html [7/15/11]

3 – nytimes.com/2011/07/16/world/europe/16italy.html [7/15/11]

4 – online.wsj.com/article/SB10001424052702304521304576447641965268196.html [7/15/11]

5 – cnbc.com/id/43768567/ [7/15/11]

6 – census.gov/retail/marts/www/marts_current.pdf [7/14/11]

7 – blogs.wsj.com/marketbeat/2011/07/15/data-points-energy-metals-500/ [7/15/11]

8 – cnbc.com/id/43773110 [7/15/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F15%2F10&x=0&y=0 [7/15/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F15%2F10&x=10&y=18 [7/15/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F15%2F10&x=0&y=0 [7/15/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F14%2F06&x=0&y=0 [7/15/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F14%2F06&x=0&y=0 [7/15/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F14%2F06&x=0&y=0 [7/15/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F16%2F01&x=0&y=0 [7/15/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F16%2F01&x=0&y=0 [7/15/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F2%16F01&x=0&y=0 [7/15/11]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/15/11]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/15/11]

11 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]

12 – montoyaregistry.com/Financial-Market.aspx?financial-market=how-to-choose-a-financial-advisor&category=5 [7/17/11]

 

 

Comments are closed.

%d bloggers like this: