GOOD NEWS: INFLATION IS BACK
The Consumer Price Index rose 0.3% for July – the largest monthly increase since August. The Labor Department’s report quelled deflation worries among economists and investors who feared the CPI would go negative for a fourth straight month. Energy prices rose 2.6% in July, while core CPI (minus food and energy prices) went up 0.1%. Across the last 12 months of data, core CPI has increased 0.9% and overall CPI has advanced 1.2% - the mildest inflation in 44 years.1,2
The Consumer Price Index rose 0.3% for July – the largest monthly increase since August. The Labor Department’s report quelled deflation worries among economists and investors who feared the CPI would go negative for a fourth straight month. Energy prices rose 2.6% in July, while core CPI (minus food and energy prices) went up 0.1%. Across the last 12 months of data, core CPI has increased 0.9% and overall CPI has advanced 1.2% - the mildest inflation in 44 years.1,2
RETAIL SALES IMPROVE
The Commerce Department estimated a 0.4% gain in retail sales for July – a nice turnaround after two months in the minus column. (A 1.6% rise in motor vehicle and motor vehicle parts purchases certainly helped.)1
The Commerce Department estimated a 0.4% gain in retail sales for July – a nice turnaround after two months in the minus column. (A 1.6% rise in motor vehicle and motor vehicle parts purchases certainly helped.)1
A SLIGHT RISE IN CONSUMER SENTIMENT
The middle of the month brings the latest University of Michigan/Reuters consumer sentiment survey. The preliminary August edition came in at 69.6, slightly better than the 69.0 consensus forecast of economists polled by Bloomberg News.3
The middle of the month brings the latest University of Michigan/Reuters consumer sentiment survey. The preliminary August edition came in at 69.6, slightly better than the 69.0 consensus forecast of economists polled by Bloomberg News.3
FED WILL BUY UP MORE DEBT
As if acknowledging that the recovery is not moving fast enough to stimulate notable growth or job creation, the Federal Reserve said it would use proceeds from maturing mortgage-linked securities to buy up U.S. Treasuries. Analysts estimate the Fed could buy $10 billion to $30 billion of the bonds per month. The new effort will keep the Fed’s portfolio of Treasuries around the $2 trillion level for the near future, with the goal of keeping long-term interest rates from rising. Fed policymakers left the benchmark interest rate unchanged last week.4,5
As if acknowledging that the recovery is not moving fast enough to stimulate notable growth or job creation, the Federal Reserve said it would use proceeds from maturing mortgage-linked securities to buy up U.S. Treasuries. Analysts estimate the Fed could buy $10 billion to $30 billion of the bonds per month. The new effort will keep the Fed’s portfolio of Treasuries around the $2 trillion level for the near future, with the goal of keeping long-term interest rates from rising. Fed policymakers left the benchmark interest rate unchanged last week.4,5
BUSINESS INVENTORIES UP, BUSINESS SALES DOWN
The Commerce Department noted last week that business stockpiles grew by 0.3% for June, on the heels of a 0.2% increase for May. However, business sales fell by 0.6% - better than June’s 1.2% drop, but still the second monthly decline in a row after 13 straight monthly gains.6
The Commerce Department noted last week that business stockpiles grew by 0.3% for June, on the heels of a 0.2% increase for May. However, business sales fell by 0.6% - better than June’s 1.2% drop, but still the second monthly decline in a row after 13 straight monthly gains.6
ROUGH WEEK FOR WALL STREET
It was especially tough for the NASDAQ, which dived 5.02%. The S&P 500 slipped 3.78% last week while the DJIA lost 3.29%. Wednesday, Wall Street endured a major selloff on pessimism over the bearish FOMC statement and worries about a slowing global economy; that was the pivotal day of the week for stocks. Where did the indices settle at Friday? DJIA, 10,303.15; NASDAQ, 2,173.48; S&P 500, 1,079.27.7
It was especially tough for the NASDAQ, which dived 5.02%. The S&P 500 slipped 3.78% last week while the DJIA lost 3.29%. Wednesday, Wall Street endured a major selloff on pessimism over the bearish FOMC statement and worries about a slowing global economy; that was the pivotal day of the week for stocks. Where did the indices settle at Friday? DJIA, 10,303.15; NASDAQ, 2,173.48; S&P 500, 1,079.27.7
% CHANGE | Y-T-D | 1-YR CHG | 5-YR AVG | 10-YR AVG |
DJIA | -1.20 | +9.63 | -0.56 | -0.78 |
NASDAQ | -4.22 | +8.17 | +0.15 | -4.35 |
S&P 500 | -3.21 | +6.57 | -2.46 | -2.76 |
REAL YIELD | 8/13 RATE | 1 YR AGO | 5 YRS AGO | 10 YRS AGO |
10 YR TIPS | 1.00% | 1.80% | 1.91% | 4.03% |
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 8/13/107,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
WEEKLY QUOTE
“The best way to find yourself is to lose yourself in the service of others.”
– Mahatma Gandhi
– Mahatma Gandhi
WEEKLY TIP
Avoid visiting ATMs alone at night, and never count your money at one. If an outside ATM seems lonely, try a well-lit ATM in a 24-hour grocery or drug store instead.
WEEKLY RIDDLE
What appears once in a minute, twice in a moment, but never in a decade?
Last week’s riddle:
Two fathers and two sons went truffle hunting. Each found a truffle yet they found only three in all. How come?
Two fathers and two sons went truffle hunting. Each found a truffle yet they found only three in all. How come?
Last week’s answer:
The truffle-hunting party was made up of three people - a man, his son and his grandson.
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Citations.
1 - economy.kansascity.com/?q=node/7992 [8/13/10]
2 - bls.gov/news.release/cpi.nr0.htm [8/13/10]
3 - bloomberg.com/news/2010-08-13/u-s-consumer-confidence-rises-more-than-estimated-michigan-index-shows.html [8/13/10]
4 - latimes.com/business/la-fi-fed-20100811,0,835529.story [8/11/10]
7 - cnbc.com/id/38696191 [8/13/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=8%2F13%2F09&x=0&y=0 [8/13/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=8%2F13%2F09&x=0&y=0 [8/13/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=8%2F13%2F09&x=0&y=0 [8/13/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=8%2F12%2F05&x=0&y=0 [8/13/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=8%2F12%2F05&x=0&y=0 [8/13/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=8%2F12%2F05&x=0&y=0 [8/13/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=8%2F14%2F00&x=0&y=0 [8/13/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=8%2F14%2F00&x=0&y=0 [8/13/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=8%2F14%2F00&x=0&y=0 [8/13/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [8/13/10]
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
"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
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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