Skip to content

Weekly Economic Update

December 27, 2011

John Jastremski Presents:

Weekly Economic Update

December 26, 2011

PAYROLL TAX HOLIDAY EXTENDED FOR 2 MONTHS

Friday, President Obama signed an extension of the payroll tax cut lasting through February 29. The stopgap legislation also extends long-term unemployment benefits through that date and postpones a 27% reduction in Medicare payments to doctors. The federal government will pay for the extenders by having Fannie Mae and Freddie Mac hike guarantee fees on new mortgages, a cost that will be passed on to those buying or refinancing a home in 2012.1                     

GAINS IN HARD GOODS ORDERS, CONSUMER SPENDING

November’s consumer spending increase was tiny: 0.1%. Wages advanced just 0.1% as well. However, last month also saw a 3.8% rise in durable goods orders (the best month for that indicator since July).2,3

IMPROVED HOME SALES, HOUSING STARTS

The Census Bureau reported a 1.6% increase in new home purchases in November, with the new home inventory at its smallest since March 2006. Housing starts hit a 19-month peak in November, soaring 9.3% on the month. Existing home sales also improved notably in November, rising 4.0%; according to the National Association of Realtors, that was the best month since January.3

CONSUMERS FEELING MERRIER

December’s final Thomson Reuters/University of Michigan consumer sentiment survey came in at 69.9 compared with November’s final 64.1 mark. That also beat the 68.0 estimate forecast by economists Reuters had surveyed.4

A YEAR-END RALLY GETS ROLLING

Stocks showed definite momentum last week. The 5-day performances: DJIA, +3.60% to 12,294.00: NASDAQ, +2.48% to 2,618.64; S&P 500, +3.74% to 1,265.33. At the close on Friday, oil settled at $99.68 on the NYMEX, gold closed at $1,606.00 on the COMEX, retail gasoline prices had fallen 2.15% in the past 30 days and natural gas futures were at lows unseen in four years.2,5

THIS WEEK: No major economic releases are on tap for Monday, Wednesday or Friday. Tuesday, the October edition of the S&P/Case-Shiller home price index arrives plus the Conference Board’s newest consumer confidence poll. Thursday, the National Association of Realtors issues its November report on pending home sales and we get the latest initial claims figures.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+6.19

+6.23

-0.0008

+2.25

NASDAQ

-1.29

-1.76

+1.81

+3.47

S&P 500

+0.61

+0.68

-2.06

+1.05

REAL YIELD

12/23 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.04%

1.08%

2.35%

3.50%

 

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 12/23/112,6,7,8

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 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.

 

 

 

 

 

Comments are closed.

%d bloggers like this: