WEEKLY ECONOMIC UPDATE - October 25, 2010

FED & CONFERENCE BOARD SEE MODEST GROWTH
The Federal Reserve’s latest Beige Book came out last week, and 8 of the 12 regional Fed banks reported economic expansion in the anecdotal survey covering September and early October. The survey found that while hiring demand “remained limited”, gains in manufacturing and retail spending were occurring in most regions. The Conference Board’s September Leading Indicators Index offered a slightly less encouraging picture – the gauge advanced for a third consecutive month, rising 0.3%, but just 5 of the 10 components of the index posted gains.^1,2

HOUSING STARTS RISE SLIGHTLY
A nice surprise: Commerce Department data showed a 0.3% advance in housing starts for September. Analysts were not expecting a third straight monthly increase. Is it a sign of stability in the real estate market? Economists hope so, though the pace of housing starts is still very weak in historical terms.³

INDUSTRIAL OUTPUT DISAPPOINTS
It had been a year since the Federal Reserve announced a monthly decline in industrial production. There was an unanticipated 0.2% drop in the category for September. Utilities production rose by 1.9%.⁴

GOLD PULLS BACK, OIL HOLDS STEADY
October 18-22 was the worst week in three months for the precious metal, which had been heading north toward the $1,400 mark at mid-month. Gold futures fell 3.41% last week, resulting in a $1,324.40 close Friday on the COMEX. Crude oil futures dipped 0.29% last week to settle at $81.69 per barrel on the NYMEX Friday.⁵

GAINS ON WALL STREET
Marquee U.S. indices pulled off small advances last week. The Dow rose 0.63% to a Friday close of 11,132.56. The NASDAQ and S&P 500 respectively gained 0.43% and 0.59% on the week; at Friday’s closing bell, that left them at 2,479.39 and 1,183.08.⁶

COMING NEXT WEEK: September existing home sales (Monday), the August Case-Shiller Home Price Index and the Conference Board’s October poll of consumer confidence (Tuesday), September new home sales and durable goods orders (Wednesday), the latest initial and continuing claims (Thursday), and the final October reading on consumer sentiment from the University of Michigan and the first estimate of 3Q GDP (Friday). Plus of course, 3Q earnings reports all week.

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+6.76	+10.43	+1.80	+0.84
NASDAQ	+9.27	+14.51	+3.81	-2.85
S&P 500	+6.10	+8.25	+0.06	-1.52
REAL YIELD	10/22 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.50%	1.49%	1.89%	4.03%

Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 10/22/10^6,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

WEEKLY QUOTE

“Life is the art of drawing without an eraser.”
– John Gardner

WEEKLY TIP

Try setting a specific dollar amount as a goal for your emergency savings, rather than just contributing to it here and there as it's convenient. A solid goal may help you stick with steady, ongoing contributions.

WEEKLY RIDDLE

Before Mt. Everestwas measured, in 1819, what was the highest mountain on earth?

Last week’s riddle:
What is placed on a table and cut, but never eaten?

Last week’s answer:

A deck of cards.

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Citations. 1 – dailyfinance.com/story/the-fed-economy-grew-at-a-modest-pace-in-september/19681630/ [10/20/10] 2 – msnbc.msn.com/id/39777205/ns/business-eye_on_the_economy/ [10/21/10] 3 – marketwatch.com/story/housing-starts-rise-03-to-610000-in-september-2010-10-19 [10/19/10] 4 - thestreet.com/story/10891354/1/industrial-production-drops-in-september.html [10/18/10] 5 - blogs.wsj.com/marketbeat/2010/10/22/data-points-energy-metals-386/ [10/22/10] 6 – cnbc.com/id/39801554 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F22%2F09&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F22%2F09&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F22%2F09&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F21%2F05&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F21%2F05&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F21%2F05&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F23%2F00&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F23%2F00&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F23%2F00&x=0&y=0 [10/22/10] 8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [10/22/10] 8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [10/22/10] 9 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]

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)
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