Wednesday, October 20, 2010

WEEKLY ECONOMIC UPDATE - October 18, 2010

CPI UP JUST 0.1%, PPI ADVANCES 0.4%
In September, consumer prices barely increased – in fact, the core Consumer Price Index was flat for the second month in a row. According to the Labor Department, core CPI has risen only 0.8% in the last 12 months - core inflation hasn’t been so tame since 1961. With the economy so sluggish, retailers clearly need to keep their prices low to see if they can promote any demand. Producer prices increased for the third straight month, with the core PPI rising 0.1% for September. The core PPI is up 1.6% over the past 12 months, and the overall PPI has advanced 4.0% in that period.1,2

CONSUMER SENTIMENT SLIPS A BIT
October’s preliminary Universityof Michigan/Reutersconsumer sentiment index is in, and it shows a mild decline. Analysts weren’t expecting the index to move south, but it went to 67.9 from the final 68.2 September reading.3

RETAIL SALES UP BY 0.6% FOR SEPTEMBER
On Friday, the Commerce Department reported the second straight monthly advance in the category, after a revised 0.7% gain for August. Sales improved across almost all retail categories – they only weakened at clothing stores.3

BUSINESS INVENTORIES GROW IN AUGUST
Business stockpiles increased by 0.6% in that month, according to the Commerce Department. This follows a 1.1% increase for July. Both of those gains will likely constitute major contributions to 3Q GDP. On the downside, business sales only improved by 0.1%, leaving the inventory-to-sales ratio at 1.27 months.4

WALL STREET RIDES A 2-WEEK WIN STREAK
The Dow, S&P 500 and NASDAQ all advanced last week. The DJIA gained 0.51% for the week to close at 11,062.78 on Friday. The NASDAQ ended last week at 2,468.77 after a 2.78% weekly gain; the S&P 500 wound up at 1,176.19 after a 0.95% weekly advance.5

COMING NEXT WEEK: On Monday, we have a report on September industrial output; on Tuesday, we get data on September housing starts and building permits; on Wednesday, the Federal Reserve’s newest Beige Book comes out; and on Thursday, we receive fresh initial claims numbers and the Conference Board’s leading indicators index for September.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+6.09
+9.94
+1.51
+0.80
NASDAQ
+8.80
+13.60
+3.91
-2.50
S&P 500
+5.48
+7.26
-0.17
-1.44
REAL YIELD
10/15 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.50%
1.50%
1.98%
4.03%

Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 10/15/105,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.


WEEKLY QUOTE
“The hardest tumble a man can make is to fall over his own bluff.”
– Ambrose Bierce

WEEKLY TIP
Ward off impulse buying with a 30-day list. If you feel like you have to have something, put it on your 30-day list. See if you still have the urge to buy it after 30 days; chances are, you won’t.

WEEKLY RIDDLE
What is placed on a table and cut, but never eaten?

Last week’s riddle:
I am a word that signifies a wide natural area – but remove my first letter, and you are left with a word signifying a narrow urban corridor. What word am I?

Last week’s answer:
Valley – remove the V and you get “alley”


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Citations.
5 - cnbc.com/id/39690885 [10/15/10]


C.W. Copeland
"Your Personal CFO"
C.W. Copeland & Associates
Lifestyle Management Advisors
194 Centennial Way, NW
Atlanta, GA 30313
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


WEEKLY ECONOMIC UPDATE -October 11, 2010


JOBS REPORT COULD PROMPT FED RESPONSE
The U.S. economy shed 95,000 non-farming jobs in September - mostly government jobs, according to the Labor Department. Economists surveyed by MarketWatch thought payrolls would shrink by only 8,000 last month. The unemployment rate held steady at 9.6% as the private sector added 64,000 positions. On Friday, stocks posted gains after the news – economists and investors alike felt the report would spur the Federal Reserve toward further quantitative easing.1

PENDING HOME SALES UP 4.3% FOR AUGUST
The National Association of Realtors reported the second straight monthly advance in this indicator. August pending home sales were still 20.1% below year-ago levels.2

SERVICE SECTOR GROWTH RATE INCREASES
The Institute for Supply Management’s service sector index rose for a ninth straight month, going from 51.8 in August to 53.2 in September. The employment sub-index moved north 2.0 points to 50.2, indicating hiring had increased.3

TWO BIG BANKS HALT FORECLOSURES
Responding to allegations that it may have seized homes using shortcuts and defective documents, Bank of America decided last week to extend its freeze on foreclosures to all 50 states. PNC Financial Services Group also announced last week that it was halting foreclosure sales for one month.4

FACTORY ORDERS HINT AT COMPANIES UPGRADING
In August, orders for non-military capital goods excluding aircraft rose 5.1%. This marks the best month for such orders since March 2010, according to Commerce Department data. Overall capital goods orders declined by 0.5%.5

DOW CLOSES NORTH OF 11,000
The index gained 1.63% last week to settle Friday at 11,006.48 – the first close over 11,000 since May 3. The NASDAQ advanced 1.31% on the week to settle Friday at 2,401.91. The S&P 500 closed at 1,165.13 Friday after a 1.65% weekly gain.6

COMING NEXT WEEK: minutes from the 9/21 FOMC meeting (Tuesday), new jobless claims figures and September PPI (Thursday), and then a plethora of reports to digest on Friday - September CPI, the preliminary October University of Michigan consumer sentiment survey, and new data on retail sales and business inventories.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+5.55
+12.46
+1.39
+0.41
NASDAQ
+5.85
+13.09
+2.98
-2.84
S&P 500
+4.49
+9.35
-0.51
-1.69
REAL YIELD
10/8 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.45%
1.49%
1.90%
4.03%

Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 10/8/106,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

WEEKLY QUOTE
“The digital revolution is far more significant than the invention of writing or even of printing.”
– Douglas Engelbart

WEEKLY TIP
Update your will. It is just as important as having one. If you drafted a will years ago, the information is likely in need of some adjustments. Be sure to revisit your will often and keep it up to date.

WEEKLY RIDDLE
I am a word that signifies a wide natural area – but remove my first letter, and you are left with a word signifying a narrow urban corridor. What word am I?

Last week’s riddle:
Ian bought a bag of apples on Friday and ate a third of them. On Saturday he ate half of the remaining apples. On Sunday he looked in the bag and found that just two were left. How many apples were originally in the bag?

Last week’s answer:
Six. He had six apples to start with, and ate two the first day and two the second day.


Please feel free to forward this article to 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.
6 - cnbc.com/id/39580603 [10/8/10]


Regards,

C.W. Copeland
"Your Personal CFO"
C.W. Copeland & Associates
Lifestyle Management Advisors
194 Centennial Way, NW
Atlanta, GA 30313
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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