Kevin M. Nast Presents: WEEKLY ECONOMIC UPDATE

– Sara Blakely

WEEKLY TIP

Each day brings breaking news; beware of abruptly altering your long-range financial strategy in response.

WEEKLY RIDDLE

You have been hired by an eccentric farmer, who requests that you build four pens for his nine sheep, but only allow an odd number of sheep in each pen. How do you accomplish this? 

Last week’s riddle:

I nearly always lie on a surface, and I come in different shapes and sizes, often with curves. You can put me anywhere you like, yet there is only one proper place for me. What am I?

Last week’s answer:

A jigsaw puzzle piece.

July 30, 2012

CONSUMERS ARE STILL A BIT CYNICAL 

The good news is that the University of Michigan’s final July index of consumer sentiment improved from its 72.0 preliminary reading to a final mark of 72.3. Still, that represents a 2012 monthly low for the gauge, which had finished June at 73.2.¹

NEW & PENDING HOME SALES DECLINE

In year-over-year terms, things look sunny: new home sales were up 15.1% in June compared with June 2011 and pending home sales were 9.5% improved from a year before. June reports from the Census Bureau and National Association of Realtors were respectively gloomy, however: new home sales dropped an alarming 8.4% after two months of gains, and contracts to purchase existing homes decreased by 1.4%.^2,3

GDP LOOKS WEAK; HARD GOODS ORDERS SURPRISE

The federal government’s second estimate of Q2 GDP (+1.5%) represents the tamest growth since Q3 2011. June’s durable goods orders beat forecasts, registering a 1.6% increase (economists polled by Briefing.com had predicted a gain of 0.3%).^1,4,5

DOW LOGS BEST 3 DAYS OF THE YEAR

How could that happen with such negative indicators? Two words: renewed hope. Thursday, European Central Bank president Mario Draghi said the ECB would do whatever is needed to save the euro; Friday, Draghi was reportedly talking with Germany’s central bank about coordinated sovereign debt purchases. So the Dow (+1.97% to 13,075.66), NASDAQ (+1.12% to 2,958.09) and S&P 500 (+1.71% to 1,385.97) all did well last week. COMEX gold rose 2.22% last week to end Friday at $1,618.00; oil settled at $90.13 Friday, as prices slipped 1.85% across five days.^1,4,6

THIS WEEK: Monday, earnings from Anadarko and HSBC are in. Tuesday, June consumer spending data and May’s Case-Shiller Home Price Index arrive along with Q2 results from Aetna, Pfizer, Deutsche Bank, Goodyear, DreamWorks, BP, Honda, UBS, Valero and Electronic Arts. Markets will watch Washington on Wednesday as a Federal Reserve policy meeting ends; July’s ISM manufacturing index, July auto sales figures and earnings from MasterCard, Yelp, Time Warner, Burger King, Marathon Oil, Hartford Financial, Green Mountain Coffee, Comcast, MetLife and Prudential Financial also appear. Will the ECB make a move when its policy meeting concludes Thursday? Stateside, that day brings the latest initial jobless claims, data on June factory orders and Q2 results from Clorox, GM, Kraft, AIG, Sony, Activision Blizzard, LinkedIn, Sunoco and Kellogg. Friday, the June jobs report and ISM’s June service sector index appear; Q2 results come in from Beazer, Viacom, Toyota, NYSE Euronext, Procter & Gamble and Berkshire Hathaway.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 7/27/12^4,7,8,9

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 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. 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.

LD044304-07/12

Citations.

1 – money.msn.com [7/27/12]

2 – www.cnbc.com [7/26/12]

3 – www.cbsnews.com [7/27/12]

4 – money.msn.com [7/27/12]

5 – briefing.com [7/27/12]

6 – montoyaregistry.com [7/27/12]

7 – bigcharts.marketwatch.com [7/27/12]

7 – bigcharts.marketwatch.com [7/27/12]

7 – bigcharts.marketwatch.com [7/27/12]

7 – bigcharts.marketwatch.com [7/27/12]

7 – bigcharts.marketwatch.com [7/27/12]

7 – bigcharts.marketwatch.com [7/27/12]

7 – bigcharts.marketwatch.com [7/27/12]

7 – bigcharts.marketwatch.com [7/27/12]

7 – bigcharts.marketwatch.com [7/27/12]

8 – treasury.gov [7/27/12]

8 – treasury.gov [7/27/12]

9 – treasurydirect.gov [7/10/02]