WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE “We may encounter many defeats but we must not be defeated.” - Maya Angelou WEEKLY TIP Beware of being too risk-averse when it comes to planning retirement income. Some retirees have portfolios so conservative that their incomes struggle to keep pace with inflation. WEEKLY RIDDLE Two fathers and two sons shopped for computers at their local big box retailer. Each bought a PC, yet they bought only three PCs total. How could this be? Last week’s riddle: Name the three English-language three-letter words that begin and end with the letter E. Last week’s answer: Eve, ewe and eye.	March 5, 2012 A GAIN (OF SORTS) IN CONSUMER SPENDING The Commerce Department noted a 0.2% rise in personal spending in January along with a 0.3% rise in wages. However, real consumer spending was flat for the third consecutive month when adjusted for inflation. Headline personal spending rose 2.1% in Q4 2011. Many economists expect a comparable gain this quarter. In related news, the Bureau of Economic Analysis revised Q4 GDP north to 3.0% last week.1,2,3                                                                                                   DURABLE GOODS ORDERS, ISM INDEX DECLINE While the Institute for Supply Management’s manufacturing index spent its 31st consecutive month above 50, it did dip 1.7% in February to 52.4 – well below the 54.7 consensus forecast among economists polled by Briefing.com. Last week, the Commerce Department said that hard goods orders decreased 4.0% in January (the expiration of the 2011 tax break on capital investment was likely a factor).2,3,4 HOME PRICES SLIP, BUT SALES CONTRACTS INCREASE The good news: pending home sales increased 2.0% in January according to the National Association of Realtors. Economists polled by Briefing.com had forecast only half that gain. The not-so-good news: December’s S&P/Case-Shiller Home Price Index revealed a 3.8% monthly decline and a 4.0% annual retreat in existing home prices. 3,5 S&P & NASDAQ ADVANCE; DOW HAS A FLAT WEEK Friday, the DJIA settled at 12,977.57, the NASDAQ at 2,976.19 and the S&P 500 at 1,369.13. The Dow lost 0.04% from Monday to Friday while the S&P and NASDAQ respectively gained 0.28% and 0.42%. Retail gasoline prices were averaging $3.74 a gallon nationally on Friday; oil futures lost 2.80% last week to settle at $106.70 per barrel. Gold retreated 3.75% on the COMEX for the week to settle at $1,709.80 an ounce Friday.6,7 THIS WEEK: The data stream is pretty light this week, at least in terms of domestic economic news. Monday, ISM releases its February service sector index and we get Census Bureau data on January factory orders. Tuesday offers Q4 earnings from Dick’s Sporting Goods and Pandora Media. Wednesday, we have earnings reports from H&R Block, Hovnanian and American Eagle Outfitters. In addition to new weekly jobless claims figures, Thursday will bring Q4 results from Smithfield Foods, Williams-Sonoma, Quicksilver and Stein Mart. Friday, the February unemployment report comes out along with data on wholesale inventories and earnings from Ann Inc. (formerly Ann Taylor) and Del Monte. % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +6.22 +7.55 +1.43 +2.52 NASDAQ +14.24 +8.30 +5.14 +6.51 S&P 500 +8.91 +4.64 -0.26 +2.10 REAL YIELD 3/2 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS -0.24% 1.01% 2.15% 3.48% Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov - 3/2/126,8,9,10 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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«RepresentativeDisclosure» 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. Citations. 1 - www.dailyfinance.com/article/consumers-spend-more-after-incomes-rise/1866063/ [3/1/12] 2 - www.reuters.com/article/2012/03/01/usa-economy-idUSL2E8E11BN20120301 [3/1/12] 3 - briefing.com/investor/calendars/economic/2012/02/27-02 [3/2/12] 4 - www.ism.ws/ISMReport/MfgROB.cfm [3/1/12] 5 - www.charlotteobserver.com/2012/02/29/3054668/housing-slump-continues.html [2/29/12] 6 - money.msn.com/market-news/post.aspx?post=a88fef67-2cc0-41dc-8ce3-34d5cd866ed9&_nwpt=1 [3/2/12] 7 - montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [3/2/12] 8 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F2%2F11&x=0&y=0 [3/2/12] 8 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F2%2F11&x=0&y=0 [3/2/12] 8 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F2%2F11&x=0&y=0 [3/2/12] 8 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F2%2F07&x=0&y=0 [3/2/12] 8 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F2%2F07&x=0&y=0 [3/2/12] 8 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F2%2F07&x=0&y=0 [3/2/12] 8 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F1%2F02&x=0&y=0 [3/2/12] 8 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F1%2F02&x=0&y=0 [3/2/12] 8 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F1%2F02&x=0&y=0 [3/2/12] 9 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/2/12] 9 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/2/12] 10 - treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]