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WEEKLY QUOTE
“You
miss 100% of the shots you never take.”
- Wayne Gretzky
WEEKLY TIP
Inflation
is tame right now, but keep in mind that even moderate inflation can have
significant impact. For example, today’s $20,000 car would cost roughly
$29,600 in 2023 after ten years of just 4% annual inflation.
WEEKLY RIDDLE
What can explode slowly, with no
smoke or flame?
Last week’s riddle:
If a single-engine airplane taxied not onto a runway, but onto an
enormous conveyer belt whose speed precisely equaled that of the plane in the
opposite direction, could the plane still manage to take off?
Last week’s answer:
Yes,
eventually. A plane's wheels roll freely, and the thrust generated by the
prop or jet engine will still be greater than drag and the lift created by
air flowing over the wing will still be greater than the aircraft’s weight.
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February 25,
2013
HOME SALES RISE, HOUSING STARTS FALL
January brought a 0.4% improvement in existing home sales,
even as the inventory of properties for sale hit a 93-month low. The National
Association of Realtors reported a 25% year-over-year decline in existing
home inventory, which hasn’t been seen since December 1999. The median sales
price was $173,600 last month, up 12.9% from a year ago. Turning to new
construction, housing starts dropped 8.5% in January after a 15.7% gain in
December, but new home permits increased 1.8%.1,2
NO CHANGE IN CPI, BUT PRODUCER PRICES
ADVANCE
The
Consumer Price Index was flat for a second straight month in January, with
annualized inflation at just 1.6%. Core CPI (minus food and energy prices)
advanced 0.3%, however - the biggest monthly gain since May 2011. The
Producer Price Index rose 0.2% in January, with overall yearly wholesale
inflation at 1.4%.3,4
SEQUESTRATION SEEMS IMMINENT
On
March 1, $85 billion in federal budget cuts are set to occur – and with
Congress on recess last week, not much more than talk emerged about delaying them
further. Friday, President Obama said he did not believe that the cuts were
“inevitable” and commented that “this is not a smart way for us to reduce the
deficit”. At the end of last week, no bipartisan effort to reschedule them
was underway.5
STOCKS STAGE FIRST WEEKLY RETREAT OF
2013
Pronounced
volatility returned to Wall Street last week due to earnings surprises and
the January Federal Reserve policy meeting minutes, which raised concerns over
the longevity of QE3. How did the key indices do last week? The numbers: Dow,
+0.13% to 14,000.57; S&P 500, -0.28% to 1,515.60; NASDAQ, -0.95% to 3,161.82.6
THIS WEEK: Earnings
reports from Lowe’s and Hertz arrive Monday. Tuesday, January new home sales
figures, a new Conference Board consumer confidence poll and the latest
Case-Shiller Home Price Index appear, and Fed chairman Ben Bernanke begins
two days of testimony in Congress; Macy’s, Home Depot, Saks, AutoZone, Priceline
and TiVo announce earnings. Reports on January pending home sales and durable
goods orders are out Wednesday plus earnings from Target, Monster, Limited
Brands, Dollar Tree, TJX, Groupon and JCPenney. Thursday offers quarterly
results from Best Buy, Gap, Sears, Kohl’s and Barnes & Noble and the
second estimate of Q4 GDP. Friday is March 1: sequester cuts may occur, the
final February consumer sentiment index from the University of Michigan
arrives, February’s ISM manufacturing index and reports on January consumer
spending and vehicle sales appear, and Ben Bernanke speaks at the San
Francisco Fed.
Sources: cnbc.com, bigcharts.com, treasury.gov - 2/22/136,7,8,9
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 - www.marketwatch.com/story/home-sales-inch-up-in-january-as-inventory-shrinks-2013-02-21
[2/21/13]
2 - blogs.wsj.com/developments/2013/02/20/housing-starts-fall-but-economists-stay-positive/
[2/22/13]
3 - www.foxbusiness.com/economy/2013/02/21/consumer-prices-flat-in-january/
[2/22/13]
4 -
articles.marketwatch.com/2013-02-20/economy/37188507_1_wholesale-prices-vegetable-prices-higher-food-prices
[2/22/13]
5 -
abcnews.go.com/blogs/politics/2013/02/hope-springs-eternal-for-obama-on-budget-cuts/
[2/22/13]
6 - www.cnbc.com/id/100484753
[2/22/13]
7 -
bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F22%2F12&x=0&y=0
[2/22/13]
7 -
bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F22%2F12&x=0&y=0
[2/22/13]
7 -
bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F22%2F12&x=0&y=0
[2/22/13]
7 -
bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F22%2F08&x=0&y=0
[2/22/13]
7 -
bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F22%2F08&x=0&y=0
[2/22/13]
7 -
bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F22%2F08&x=0&y=0
[2/22/13]
7 -
bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F21%2F03&x=0&y=0
[2/22/13]
7 -
bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F21%2F03&x=0&y=0
[2/22/13]
7 -
bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F21%2F03&x=0&y=0
[2/22/13]
8 - www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield
[2/22/13]
9 - www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll
[2/22/13]
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Tuesday, February 26, 2013
Economic Update for the week of February 25th, 2013
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