Economic Update for the week of August 6th, 2012

WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE          “A clever man commits no minor blunders.”      - Johann Wolfgang von Goethe    WEEKLY TIP           It may be worth it to hire an M&A firm when selling an established business. This could encourage multiple offers and a higher sale price.      WEEKLY RIDDLE      A friend wants change for a dollar. All you have in your pocket is change, and it amounts to over a dollar, but you still can't make the change correctly. What is the largest amount of money you could possibly have in this situation? What coins do you have that prevent you from making the change correctly?    Last week’s 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 answer: Build three pens, each holding three sheep. Build a fourth pen surrounding the other pens, thereby containing all nine sheep.	August 6, 2012      HIRING INCREASES, AS DOES UNEMPLOYMENT Good news: 163,000 new jobs were added to the economy in July. While the jobless rate did tick up to 8.3% in the Labor Department’s latest employment report, the positives were significant: 148,000 new positions were filled in the private sector, and overall job gains were the best in any month since February. Will this discourage the Federal Reserve from thoughts of easing? Perhaps not; after all, July marked the 42nd straight month in which unemployment exceeded 8%.1,2     CONSUMERS SAVE MORE, SPEND LESS Personal incomes rose 0.5% in July, yet consumer spending was essentially flat (the Commerce Department said it actually decreased by less than .1%). The personal savings rate jumped 0.4% last month to 4.4%.3       HOME PRICES RISE 2.2% IN MAY The S&P/Case-Shiller Home Price Index logged its second straight overall monthly gain and witnessed its best month in years. The year-over-year decrease in house prices across 20 cities was trimmed to just 0.7% in the May index.3     MANUFACTURING SECTOR CONTRACTS AGAIN The Institute for Supply Management’s July manufacturing index came in at a subpar 49.8 after a 49.7 June mark. In better news, ISM’s service sector index improved to 52.6 in July from June’s reading of 52.1.2,4   FRIDAY RALLY LEADS TO WEEKLY GAINS Last week’s policy statements from the Fed and European Central Bank wearied the markets, but the Dow rose 217 points after Friday’s jobs report. The major U.S. indices all had winning weeks: Dow, +1.69% to 13,096.17; NASDAQ, +2.00% to 2,967.90; S&P 500, +1.90% to 1,390.99. Gold settled Friday at $1,609.30 an ounce, oil at $91.40 a barrel.1,5     THIS WEEK: Earnings reports from Humana and Chesapeake Energy arrive Monday. Tuesday, earnings roll in from Walt Disney, Molson Coors, Office Depot, Cablevision, CVS, Scripps, Priceline, Sirius XM, Live Nation, Zillow, Fossil and Charter Communications, and the Fed’s Ben Bernanke chats with teachers in a town hall meeting. On Wednesday, Macy’s, Dish Network, Rio Tinto, News Corp., Dean Foods and Ralph Lauren report Q2 results. Kohl’s, Nordstrom, AMC Networks, Lenovo and Wendy’s issue earnings reports Thursday to go along with data on June wholesale inventories and the latest initial jobless claims figures.  Friday, JCPenney reports Q2 earnings.    % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +7.19 +10.08 -0.13 +5.75 NASDAQ +13.92 +10.21 +3.64 +13.78 S&P 500 +10.61 +10.37 -0.59 +6.09 REAL YIELD 8/3 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS -0.66% 0.36% 2.44% 3.10%   Sources: usatoday.com, cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov - 8/3/122,6,7,8,9 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
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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 - money.msn.com/market-news/post.aspx?post=df0f24d5-5a39-4034-84a5-d540c1356894 [8/3/12] 2 - www.cnbc.com/id/48482586 [8/3/12] 3 - www.foxbusiness.com/news/2012/07/31/us-personal-spending-flat-home-prices-rise/ [7/31/12] 4 - www.ism.ws/ISMReport/MfgROB.cfm [8/1/12] 5 - montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [8/3/12] 6 - www.usatoday.com/money/index [8/3/12] 7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F3%2F11&x=0&y=0 [8/3/12] 7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F3%2F11&x=0&y=0 [8/3/12] 7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F3%2F11&x=0&y=0 [8/3/12] 7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F3%2F07&x=0&y=0 [8/3/12] 7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F3%2F07&x=0&y=0 [8/3/12] 7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F3%2F07&x=0&y=0 [8/3/12] 7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F2%2F02&x=0&y=0 [8/3/12] 7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F2%2F02&x=0&y=0 [8/3/12] 7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F2%2F02&x=0&y=0 [8/3/12] 8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/3/12] 8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/3/12] 9 - treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]