Weekly Economic Update
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Last week’s answer:
A Rubik’s Cube.
March 31, 2014
A SENSE OF OPTIMISM ON MAIN STREET
The Conference Board’s consumer confidence index reached a six-year peak this month, climbing 4.0 points to 82.3. Analysts polled by Reuters had forecast a gain of 0.3 points to 78.6. Additionally, new Commerce Department data showed household spending rising 0.3% in February with household incomes up by the same amount. The only weak consumer signal came from the University of Michigan’s March index of consumer sentiment; it retreated 1.6 points from February to a mark of 80.0.1,2
HOME PRICES RISE, BUT SALES INDICATORS SLIP
January’s edition of the S&P/Case-Shiller Home Price Index (surveying real estate values in 20 cities) advanced 0.8%, replicating its December gain. Annually, prices were up 13.2%. Mirroring the decline in residential resales in February, the Census Bureau reported a 3.3% drop in new home sales last month, and a 1.1% decrease over 12 months. Pending home sales fell 0.8% in February to a 28-month low, the National Association of Realtors announced. NAR’s pending home sales index was down 10.5% from a year ago.1,3
2.6% GROWTH FOR THE FOURTH QUARTER
Last week brought the final Q4 growth assessment from the Commerce Department; the reading was 0.2% better than the preceding estimate. Consumer spending for Q4 was revised 0.7% north to 3.3%. Another positive sign: hard goods orders increased by 2.2% in February, though the gain was only 0.2% with transportation orders removed.3,4
TRYING WEEK FOR TECH STOCKS
The NASDAQ lost its entire YTD gain last week thanks to a 2.83% 5-day drop, taking it to a Friday close of 4,155.76. Settling at 1,857.62 Friday, the S&P 500 lost 0.48% on the week. For the blue chips, the news was slightly better. The DJIA rose 0.12% in five days to close at 16,323.06 Friday.5,6
THIS WEEK: Monday offers no major U.S. economic releases, but Federal Reserve chair Janet Yellen speaks in Chicago and Wall Street will watch data on Japanese manufacturing and eurozone inflation. Tuesday, ISM releases its March manufacturing PMI, complementing March factory PMIs from the eurozone and China. Wednesday brings the March ADP employment change report, Commerce Department data on February factory orders and quarterly earnings from Monsanto. ISM’s service-sector PMI arrives Thursday plus the March Challenger job cuts report, fresh initial claims figures and earnings from Micron, Perry Ellis and Investors Bancorp. The Labor Department releases its March jobs report Friday.
Sources: USATODAY.com, bigcharts.com, treasury.gov - 3/28/146,7,8,9
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This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. 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. 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. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. 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. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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.
1 - reuters.com/article/2014/03/25/us-usa-economy-idUSBREA2O10I20140325 [3/25/14]
2 - usatoday.com/story/money/business/2014/03/28/march-consumer-sentiment/7002517/ [3/28/14]
3 - news.morningstar.com/articlenet/article.aspx?id=641231 [3/27/14]
4 - briefing.com/investor/calendars/economic/2014/03/24-28 [3/28/14]
5 - google.com/finance?q=INDEXDJX%3A.DJI&ei=qqwsU-C5DISsiALCKw [3/28/14]
6 - usatoday.com/money/markets/overview/ [3/28/14]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F28%2F13&x=0&y=0 [3/28/14]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F28%2F13&x=0&y=0 [3/28/14]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F28%2F13&x=0&y=0 [3/28/14]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F27%2F09&x=0&y=0 [3/28/14]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F27%2F09&x=0&y=0 [3/28/14]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F27%2F09&x=0&y=0 [3/28/14]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F29%2F04&x=0&y=0 [3/28/14]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F29%2F04&x=0&y=0 [3/28/14]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F29%2F04&x=0&y=0 [3/28/14]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/28/14]
9 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/28/14]
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