Economic Update for the week of October 15th, 2012

WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE             “No rational argument will have a rational effect on a man who does not want to adopt a rational attitude.”       - Karl Popper        WEEKLY TIP             This is the time of year to get your “tax file” ready. Start a file in which you can compile your W-2s, assorted 1099s and important receipts reflecting business and health care expenses and charitable gifts.       WEEKLY RIDDLE            What word describes a man who does not have all his fingers on one hand?        Last week’s riddle: Strange but true: the letters in the phrase “bad credit” can be rearranged to spell something most of us probably have in our wallets or handbags. Find the anagram.    Last week’s answer: Debit card.	October 15, 2012      OUTLOOK OF CONSUMERS BRIGHTENS AGAIN Economists weren’t expecting the University of Michigan’s preliminary October consumer sentiment survey to show a major advance – but it did. The index came in at 83.1, notably better than September’s final 78.3 mark. While the much-watched consumer gauge is still well below a “normal” reading of 100, this was the highest reading since September 2007.1    GAS PRICES DRIVE PPI HIGHER Wholesale inflation rose 1.1% for September, according to the federal government’s Producer Price Index. The major influence: a 4.7% spike in energy prices.  The core PPI (minus food and energy prices) was flat last month. In the past 12 months, the PPI has advanced 2.1%. Annualized wholesale inflation hasn’t been that pronounced since March.2     NEW BEIGE BOOK REPORTS MILD ECONOMIC GROWTH The Federal Reserve’s latest survey of current economic conditions in its 12 districts noted that consumer spending “was generally reported to be flat to up slightly since the last report” while overall economic activity had “generally expanded modestly.” On the heels of the final 1.3% estimate of Q2 GDP, all this was hardly surprising.3,4    TOUGH WEEK SEES PLENTY OF SELLING The Q3 earnings season got off to an unimpressive start, and the major indices reacted with their worst weekly performances since late May: the Dow lost 2.07%, the NASDAQ 2.94% and the S&P 500 2.21%. Gold slipped 1.18% as well; oil, on the other hand, managed a 2.20% advance. Where did everything settle Friday? Oil ended the week at $91.86 per barrel and gold at $1,759.70 an ounce; the Dow closed at 13,328.85, the S&P at 1,428.59 and the NASDAQ at 3,044.11.1,5    THIS WEEK: Monday brings Q3 results from Citigroup and September retail sales figures from the Census Bureau. IBM, Intel, Coca-Cola, Goldman Sachs, Johnson & Johnson, United Health, Mattel, PNC Financial and State Street report earnings Tuesday; the September CPI also appears. Wednesday, Q3 results come in from Northern Trust, US Bancorp, American Express, Bank of America, PepsiCo, Bank of NY Mellon, Blackrock and eBay; data on September housing starts also arrives. Thursday, earnings are in from Morgan Stanley, Phillip Morris, Nokia, Google, Microsoft, Travelers, Union Pacific, Verizon, Fifth Third, Huntington AMD, Capital One, Chipotle and E-Trade, plus new initial claims figures and the Conference Board’s September leading indicators index. Friday, we get the numbers on existing home sales in September along with earnings from GE, Honeywell and McDonald's.    % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +9.10 +15.71 -1.08 +6.98 NASDAQ +16.85 +16.87 +1.70 +15.15 S&P 500 +13.60 +18.33 -1.71 +7.10 REAL YIELD 10/12 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS -0.78% 0.26% 2.36% 3.10%   Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov - 10/12/121,6,7,8 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=bc2367f2-d20e-4178-ba68-c8bf60b299d9 [10/12/12] 2 - www.nasdaq.com/article/us-producer-prices-rise-11-core-ppi-flat-20121012-00342#.UHh9YaCMLHp [10/12/12] 3 - www.hispanicbusiness.com/2012/10/10/fed_beige_book_report_calls_spending.htm [10/10/12] 4 - www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm [9/27/12] 5 - montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [10/12/12] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F12%2F11&x=0&y=0 [10/12/12] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F12%2F11&x=0&y=0 [10/12/12] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F12%2F11&x=0&y=0 [10/12/12] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F12%2F07&x=0&y=0 [10/12/12] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F12%2F07&x=0&y=0 [10/12/12] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F12%2F07&x=0&y=0 [10/12/12] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F11%2F02&x=0&y=0 [10/12/12] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F11%2F02&x=0&y=0 [10/12/12] 6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F11%2F02&x=0&y=0 [10/12/12] 7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/12/12] 7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/12/12] 8 - treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]