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WEEKLY ECONOMIC UPDATE – August 15, 2011

August 17, 2011
John Jastremski Presents: 
WEEKLY ECONOMIC UPDATE – August 15, 2011

 

WEEKLY QUOTE

“Is there anything better than to be longing for something, when you know it is within reach?”

 

– Greta Garbo

 

 

WEEKLY TIP

Should your adult children ask you to help them out with business financing or a down payment on a property, refrain from saying yes until you determine if your personal finances can handle it.

 

 

WEEKLY RIDDLE

What surrounds everyone and is the end of time and space?

 

 

Last week’s riddle:
There is a 5-letter, single-syllable word that you can take 4 letters out of, leaving you with only a single letter that has the same pronunciation as the original 5-letter word. What is this word? (Hint: it involves waiting in line.)

 

 

Last week’s answer:

Queue.

August 15, 2011

 

Americans BUY MORE IN JULY
According to the Commerce Department, U.S. retail purchases increased by 0.5% in July for the best month-over-month gain since March. That doesn’t seem to spell recession; if anything, it attests to the resilience of consumer spending. Additionally, business inventories grew by 0.3% in June as wholesale stockpiles grew 0.6%.1,2

CONSUMER CONFIDENCE WANES

The initial August Reuters/University of Michigan consumer sentiment survey showed a major plummet. While economists polled by MarketWatch had expected a reading of 61.0, the gauge hit 54.9 – its lowest level since May 1980.3

Gold GAINS $91 IN A WEEK
It wasn’t a typical week, and the precious metal soared in COMEX trading. Across August 8-12, gold advanced $91.40 – even with Friday’s $8.60 loss. It was the biggest weekly dollar gain for gold since September 15-19, 2008. A +5.54% week took prices to $1,740.20 per ounce at Friday’s close. As for oil, it lost 1.73% on the week, with prices settling at $85.38 a barrel Friday on the NYMEX.4

A RECORD LOW FOR THE REFINANCER’S FAVORITE
In Freddie Mac’s August 11 Primary Mortgage Market Survey, average interest rates on 15-year fixed rate mortgages hit an all-time low of 3.50%. The Mortgage Bankers Association reports that refi applications rose by 30% in the week ending August 5. Freddie Mac’s latest survey also showed rates for 30-year FRMs averaging 4.32%, a 9-month low.5

WILD SWINGS ON WALL STREET
The Dow experienced five straight days of triple-digit moves last week; that hadn’t happened since January 2010. All three major U.S. indices lost ground for the week. Friday, the markets cheered U.S. retail sales gains and a ban on short selling enacted by Italy, Spain, France and Belgium. The numbers for the week: S&P 500, -1.72% to 1,178.81; DJIA, -1.53% to 11,269.02; NASDAQ, -0.96% to 2,507.98.6,7,8

THIS WEEK: Monday, Lowe’s announces 2Q results. Tuesday, we have reports on July industrial output and housing starts plus earnings from Wal-Mart, Saks, Home Depot and Dell. Wednesday, we get the July Producer Price Index and earnings from Target and Deere. Thursday brings July existing home sales data, the July Consumer Price Index, the Conference Board’s July set of leading indicators, weekly jobless claims numbers and earnings from Gap, Sears and Hewlett-Packard. No major economic releases or earnings reports are scheduled for Friday.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-2.66

+9.20

+0.33

+0.82

NASDAQ

-5.46

+14.51

+4.38

+2.65

S&P 500

-6.27

+8.79

-1.39

-0.10

REAL YIELD

8/12 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.02%

1.05%

2.33%

3.50%

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 8/12/116,9,10,11

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 – latimesblogs.latimes.com/money_co/2011/08/retail-sales-send-stocks-up-again.html [8/12/11]

2 – fxstreet.com/fundamental/economic-indicators/us-business-inventories-rise-sligh0812/2011/08/12/ [8/12/11]

3 – marketwatch.com/story/august-sentiment-drops-to-lowest-since-1980-2011-08-12 [8/12/11]

4 – blogs.wsj.com/marketbeat/2011/08/12/data-points-energy-metals-511/ [8/12/11]

5 – usatoday.com/money/economy/housing/2011-08-11-mortgage-rates-low_n.htm [8/11/11]

6 – cnbc.com/id/44118761 [8/12/11]

7 – blogs.wsj.com/marketbeat/2011/08/12/data-points-u-s-markets-42/ [8/12/11]

8 – cnbc.com/id/44115923/ [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F12%2F10&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F12%2F10&x=10&y=18 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F12%2F10&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F11%2F06&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F11%2F06&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F11%2F06&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F13%2F01&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F13%2F01&x=0&y=0 [8/12/11]

9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F13%2F01&x=0&y=0 [8/12/11]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/12/11]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/12/11]

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

12 – montoyaregistry.com/Financial-Market.aspx?financial-market=the-truth-about-financial-advisors&category=5 [8/14/11]

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