Thursday, July 29, 2010

THE WEEKLY ECONOMIC UPDATE - July 26, 2010

QUOTE OF THE WEEK:
The world demands the qualities of youth: not a time of life but a state of mind,
a temper of will, a quality of the imagination, a predominance of courage over timidity
of the appetite for adventure over the love of ease."
– Robert F. Kennedy

Existing home sales fall … and mortgage rates fall further
The June existing home sales figures from the National Association of Realtors show a 5.1% drop from May, an effect from the closing of the deadline for federal homebuying credits. On the positive side, NAR reports that sales are up 9.8% from a year ago. Interest rates on conventional home loans hit a record low of 4.56% in Freddie Mac’s July 21 survey; average rates on 15-year FRMs also fell to a two-decade low of 4.03%.1,2

Long-term jobless benefits extended
President Obama extended emergency unemployment benefits for about three million Americans Thursday, not long after the measure made it past strong opposition in the Senate. The program had ended in June; Obama’s signature extends it for six more months.3

FDIC insurance permanently bumped up to $250,000
This is a byproduct of the financial reform bill. The current $250,000 FDIC insurance limit for banks and credit unions was set to expire in 2013. Incidentally, the $250,000 ceiling has been made retroactive with regard to the six U.S. banks that failed from January 1, 2008 - October 3, 2008, such as IndyMac.4

Conference Board’s leading indicators retreat 0.2%
They lost a little steam in June, but they beat expectations: economists surveyed by Thomson Reuters had expected the CB index to fall 0.3%. May’s increase was revised upward to 0.5%.5

Dow gains 300+ points in a week
The DJIA settled at 10,424.62 Friday, gaining 0.99% last week. The S&P 500 and NASDAQ respectively rose to 1,102.66 and 2,269.47. Strong earnings reports helped the Dow advance by triple digits on Thursday, and when 84 of 91 European banks passed an EU stress test, the DJIA climbed 102.32 on Friday. On the NYMEX, oil futures slipped a little more than 3% last week to close at $78.98 Friday.6

% Change
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
R I D D L E O F T H E W E E K
DJIA
-0.03
+14.94
-0.43
-0.24
This vehicle has wheels and often flies, but it is certainly not an aircraft. What is it?
NASDAQ
+0.01
+14.99
+0.82
-4.30
S&P 500
-1.12
+12.94
-2.12
-2.47
Real Yield
7/23
1 YR AGO
5 YRS AGO
10 YRS AGO
10YrTIPS
1.24%
1.80%
1.89%
4.03%
ustreas.gov, bls.gov, 7/23/10)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.
Contact my office or see next week’s
Update for the answer!

Last week’s riddle: Observe the following sequence of numbers: 11, then 1,331, then 161,051, then 19,487,171. Given this sequence, what would the next number be?

Last week’s riddle answer: 2,357,947,691. The numbers are 11 to the first power, 11 to the third power, 11 to the fifth power and 11 to the seventh power. Therefore, the missing number is 11 to the ninth power.

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Citations.
1 - realtor.org/press room/news_releases/2010/07/ehs_june_above [7/22/10]
6 - cnbc.com/id/38382997 [7/23/10]


Regards,

C.W. Copeland
"Your Personal CFO"
C.W. Copeland & Associates
Lifestyle Management Advisors
3401 Norman Berry Drive

Suite 253
East Point, GA 30344
404.567.3275 (direct)
404.601.9534 (fax)

www.PhDinMoney.com


Securities offered through Resource Horizons Group, L.L.C.
Member FINRA, SIPC
Advisory services offered through Resource Horizons Investment Advisory
1350 Church St. Ext. Third Floor
Marietta, GA 30060
Office 770 319-1970

THE WEEKLY ECONOMIC UPDATE - July 19, 2010

QUOTE OF THE WEEK:
To be humble to superiors is duty, to equals courtesy, to inferiors nobleness.”– Ben Franklin

Consumer prices decrease a bit; consumer sentiment drops notably
In June, the Consumer Price Index fell for the third month in a row, heading south 0.1%. Analysts thought the June reading would be flat. The Labor Department noted that core CPI did rise 0.2% last month, largely due to rent costs increasing. The last time CPI went negative for three straight months was October-December 2008. Separately, the preliminary July Reuters/University of Michigan consumer sentiment index came in at 66.5 compared to 76.0 in June – analysts expected a number in the mid-seventies.1

Dodd-Frank bill off to Obama’s desk
The Senate passed the Dodd-Frank Wall Street Reform and Consumer Protection Act Thursday by a 60-39 vote, with President Obama’s signature expected next week. The legislation is intended to protect consumers in the financial arena and prevent a repeat of TARP. Detractors think it gives too much power to regulators and might even open the door for further bailouts. House Minority Leader John A. Boehner (R-OH) called it "killing an ant with a nuclear weapon."2

Shops sell less in June
Retail sales were down 0.5% last month, according to the Commerce Department, marking the second straight month of retreat. Additionally, business inventories gained 0.1% for June (the fifth monthly gain in a row for that category).3

Producer prices fall 0.5% last month
The trend here may look deflationary: as with the CPI, this was the third straight monthly decline. However, the Bureau of Labor Statistics noted that core PPI increased by 0.1% for June.4

Friday selloff means a down week
Stocks were doing well last week until the market saw the latest consumer confidence and big-bank revenue reports. As a consequence, a seven-day Dow win streak ended. The S&P 500 lost 1.21% last week, concluding Friday’s market day at 1,064.88. The NASDAQ only lost 0.79% to 2,179.05 and the DJIA slipped 0.98% last week to settle Friday at 10,097.90.5

% Change
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
R I D D L E O F T H E W E E K
DJIA
-3.17
+15.91
-1.02
-0.65
Observe the following sequence of numbers: 11, then 1,331, then 161,051, then 19,487,171. Given this sequence, what would the next number be?
NASDAQ
-3.97
+15.60
+0.21
-4.90
S&P 500
-4.50
+13.20
-2.66
-2.95
Real Yield
7/16
1 YR AGO
5 YRS AGO
10 YRS AGO
10YrTIPS
1.25%
1.82%
1.95%
4.03%
ustreas.gov, bls.gov, 7/16/10)5,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
Contact my office or see next week’s
Update for the answer!

Last week’s riddle: Name the number that is 5 greater than the number which is one-fifth of one-fifth of one-half of 1050.

Last week’s riddle answer: 26. (As in 1050 ÷ 5 = 525 ÷ 5 = 105 ÷ 5 = 21 + 5 = 26.)

Please feel free to forward this article to your family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list.


Citations.
5 - cnbc.com/id/38282532 [7/16/10]


Regards,

C.W. Copeland
"Your Personal CFO"
C.W. Copeland & Associates
Lifestyle Management Advisors
3401 Norman Berry Drive

Suite 253
East Point, GA 30344
404.567.3275 (direct)
404.601.9534 (fax)

www.PhDinMoney.com


Securities offered through Resource Horizons Group, L.L.C.
Member FINRA, SIPC
Advisory services offered through Resource Horizons Investment Advisory
1350 Church St. Ext. Third Floor
Marietta, GA 30060
Office 770 319-1970
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