Weekly Economic Update – February 8, 2010

by dwhitlock on February 18, 2010

Debbie Whitlock Presents

Weekly Economic Update for the Week of February 8, 2010

Quote of the week. “Simplicity is the ultimate sophistication.”– Leonardo da Vinci

Jobless rate falls to 9.7%. The January statistic from the Labor Department was encouraging – a 0.3% drop from December. Bizarrely, there was no job growth even with that sizable decline – payrolls slimmed by about 20,000 positions last month. Revised federal figures showed a gain of 64,000 jobs for November and a loss of 150,000 in December.1

ISM index hits 5½-year high. The Institute for Supply Management’s manufacturing index rose to 58.4 in January, a peak unseen since August 2004. Economists surveyed by Reuters thought it would come in at 55.5. As for ISM’s service sector gauge, it read 50.5 for January, showing growth.2,3

Spending, wages & savings rate rise. The Bureau of Economic Analysis said that consumer spending went up 0.2% in December. Wages rose 0.4% (the sixth straight monthly increase) and the personal savings rate went north to 4.8%.4

Factory orders up 1.0%. So indicates December data from the Commerce Department. This was the eighth monthly gain in the last nine. Economists polled by Reuters had forecast an 0.5% adavance.5

Wild week takes stocks a bit lower. After two triple-digit rallies and a major Thursday selloff triggered by sovereign debt concerns, the Dow pulled out of a descent and pulled off a 10-point gain on Friday, ending the week above 10,000. The S&P 500 closed Friday at 1,066.19, and was down 0.79% for the week. The NASDAQ wrapped up Friday at 2,141.12, down 0.29% last week. The Dow’s weekly loss was 0.55%, leaving it at 10,012.23.6

% Change Y-T-D 1-Yr Chg 5-Yr Avg 10-Yr Avg
DJIA -3.99 +24.17 -1.31 -0.87
NASDAQ -5.64 +38.47 +0.52 -4.96
S&P 500 -4.39 +26.05 -2.27 -2.51
Real Yield 2/5 1 Yr Ago 5 Yrs Ago 10 Yrs Ago
10YrTIPS 1.32% 1.84% 1.65% 4.34%


(Source: CNBC.com, CNNMoney.com, ustreas.gov, bls.gov, 2/5/10)6,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be

 invested into directly. These returns do not include dividends.

Riddle of the week. A family has a mother, father and four daughters. Each daughter has one brother. How many people are in the family?

Contact my office or see next week’s Update for the answer.

Last week’s riddle: A plastic bottle filled with cola weighs one liter. What do you need to add to it to make it weigh less than two ounces?

Last week’s riddle answer: If you add a hole to the bottle, the cola will drain out and the liter bottle will weigh less than two ounces. (Actually, a liter is a measure of volume, not weight – but for the purposes of this riddle it is neither here nor there.)

 

Please feel free to forward this article to family, friends or colleagues.

If you would like us to add them to our list, please reply with their address
and we will contact them and ask for their permission to be added.

Securities offered through Woodbury Financial Services, Inc.  Member FINRA, SIPC P.O. Box 64284 St. Paul, MN  55164 800.800.2638

Sound Financial Partners and Woodbury Financial Services are not affiliated entities.

Content provided by Peter Montoya, Inc. These are the views of Peter Montoya, Inc., not the named representative or Woodbury Financial Services, Inc., and should not be considered investment advice. Neither the representative or Woodbury Financial offer tax or legal advice. All information is believed to be from reliable sources; however, the publisher makes no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting, or other professional services. If expert assistance is needed, the reader is advised to work with a competent professional. Consult your representative for further information.

These views are those of Peter Montoya Inc., and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice. 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. 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. The 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 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. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Citations.

1 kansascity.com/444/story/1729270.html [2/5/10]

2 abcnews.go.com/Business/wireStory?id=9717254 [2/1/10]

3 marketwatch.com/story/us-jan-ism-services-index-rebounds-to-505-2010-02-03?reflink=MW_news_stmp [2/3/10]

4 latimesblogs.latimes.com/money_co/2010/02/personal-income-spending-climb.html [2/1/10]

5 businessweek.com/ap/financialnews/D9DLECSO0.htm [2/4/10]

6 cnbc.com/id/35259652 [2/5/10]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F5%2F09&mode=add&symb=DJIA [2/5/10]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F4%2F05&mode=add&symb=DJIA [2/5/10]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F4%2F00&mode=add&symb=DJIA [2/5/10]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F5%2F09&mode=add&symb=COMP [2/5/10]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F4%2F05&mode=add&symb=COMP [2/5/10]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F4%2F00&mode=add&symb=COMP [2/5/10]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F5%2F09&mode=add&symb=SPX [2/5/10]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F4%2F05&mode=add&symb=SPX [2/5/10]

7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=2%2F4%2F00&mode=add&symb=SPX [2/5/10]

8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [2/5/10]

8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [2/5/10]

9 treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]

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Weekly Economic Update – January 25, 2010

by dwhitlock on January 25, 2010

Debbie Whitlock Presents

Weekly Economic Update for the Week of January 25, 2010

Quote of the week. “Popularity: it is glory’s small change.”– Victor Hugo

“Volcker rule” worries Wall Street. Investors frowned last week as the President talked of rules that would bar banks and bank holding firms from getting involved in hedge funds or conducting proprietary trading operations. Crafted with input from former Federal Reserve chairman Paul Volcker and past SEC head William Donaldson, the new regulatory proposal is likely to face stiff opposition from Senate Republicans.1,2

Big gain in leading indicators. The Conference Board’s index of leading indicators rose 1.1% in December, with November’s gain revised to 1.0% from 0.7%. The index, a forecast of future economic activity, rose 5.2% across the second half of 2009.3

PPI up 0.2% for December. That gain was much smaller than November’s 1.8% jump. Core producer prices (minus food and energy) were flat last month.4

Encouraging housing news. While new home construction decreased by 4.0% in December, housing starts were up 0.2% from a year before, marking the first year-over-year gain since March 2006. Building permits were up 10.9% in December.5

30-year loans back under 5%. For the third consecutive week, Freddie Mac measured a decline in average rates on 30-year FRMs: they were at 4.99% last week, down from 5.06% a week prior. 15-year FRMs averaged 4.40%. Rates on 5-year and 1-year ARMs respectively averaged 4.27% and 4.32%.6

A quick pullback. Besides the envisioned limits on bank risk, investors got news of China’s instruction to its banks to raise capital ratios. These factors took stocks south: the Dow closed Friday at 10,172.98, the NASDAQ at 2,205.29, and the S&P 500 at 1,091.76.7

% Change

Y-T-D

1-Yr Chg

5-Yr Avg

10-Yr Avg

DJIA

-2.45

+25.24

-0.42

-0.96

NASDAQ

-2.81

+50.48

+1.68

-4.79

S&P 500

-2.09

+31.93

-1.30

-2.43

Real Yield

1/22

1 Yr Ago

5 Yrs Ago

10 Yrs Ago

10YrTIPS

1.31%

1.97%

1.69%

4.34%

(Source: CNBC.com, CNNMoney.com, ustreas.gov, bls.gov, 1/22/10)7,8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be

invested into directly. These returns do not include dividends.

Riddle of the week. A glass of water has an ice cube in it. If the ice cube fully melts, will the water level increase, decrease or remain the same?

Contact my office or see next week’s Update for the answer.

Last week’s riddle: If it were two hours later than right now, it would be half as long until midnight as it would be if it were an hour later than right now. What time is it?

Last week’s riddle answer: 9:00 p.m.

___________________________________________________________________

Please feel free to forward this article to family, friends or colleagues.

If you would like us to add them to our list, please reply with their address
and we will contact them and ask for their permission to be added.

___________________________________________________________________

Content provided by Peter Montoya, Inc.

Securities offered through Woodbury Financial Services, Inc. Member FINRA, SIPC P.O. Box 64284 St. Paul, MN 55164 800.800.2638

Sound Financial Partners and Woodbury Financial Services are not affiliated entities.

These views are those of Peter Montoya Inc., and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice. 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. 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. The 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 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. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Citations.

1 curiouscapitalist.blogs.time.com/2010/01/21/a-question-about-the-volcker-steagall-act/?xid=rss-topstories [1/21/10]

2 online.wsj.com/article/SB10001424052748703699204575017300364900036.html?mod=WSJ-Markets-LeadStory [1/21/10]

3 abcnews.go.com/Business/wireStory?id=9622837 [1/21/10]

4 money.cnn.com/2010/01/20/markets/markets_newyork/ [1/20/10]

5 money.cnn.com/2010/01/20/real_estate/housing_starts_building_permits/?postversion=2010012012 [1/20/10]

6 washingtonpost.com/wp-dyn/content/article/2010/01/21/AR2010012105404.html [1/23/10]

7 cnbc.com/id/35017549 [1/22/10]

8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F22%2F09&mode=add&symb=DJIA [1/22/10]

8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F21%2F05&mode=add&symb=DJIA [1/22/10]

8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F21%2F00&mode=add&symb=DJIA [1/22/10]

8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F22%2F09&mode=add&symb=COMP [1/22/10]

8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F21%2F05&mode=add&symb=COMP [1/22/10]

8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F21%2F00&mode=add&symb=COMP [1/22/10]

8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F22%2F09&mode=add&symb=SPX [1/22/10]

8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F21%2F05&mode=add&symb=SPX [1/22/10]

8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=1%2F21%2F00&mode=add&symb=SPX [1/22/10]

9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [1/22/10]

9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [1/22/10]

10 treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]

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