Weekly Economic Update
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“Happiness arises in a state of peace, not of tumult.”
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Last week’s riddle:
Stick your fingers in my eyes, then move them and watch my jaws open wide. What am I?
Last week’s answer:
A pair of scissors.
August 25, 2014
A GAIN IN EXISTING HOME SALES
In its July report, the National Association of Realtors recorded a 2.4% monthly increase in existing home sales. The good news from July took the annualized sales pace up to 5.15 million. According to the Census Bureau, July also saw a 15.7% leap in housing starts and an 8.1% rise for building permits.1
INFLATION REMAINS MUTED
The latest Consumer Price Index reading shows that inflation is manageable and matching the Federal Reserve’s target. In July, the CPI ticked north only 0.1% and that brought its yearly advance to 2.0% (1.9% minus energy and food prices). July saw the smallest monthly increase for the CPI since February.2
ANOTHER JUMP FOR THE CONFERENCE BOARD LEI
After rising 0.6% in both May and June, the Conference Board’s leading economic index advanced 0.9% last month. The July gain took it to 103.3, and its coincident economic index reached 109.0.2
S&P 500 EDGES BACK TOWARD RECORD TERRITORY
Advancing 1.71% for the week, the broad benchmark closed at 1,988.40 Friday. The NASDAQ nearly matched its 5-day gain (+1.65% to 4,538.55) while the Dow beat it (+2.03% to 17,001.22). Gold got a boost Friday after Federal Reserve chair Janet Yellen expressed that the economy is headed toward normal inflation and full employment, but it still lost 2.0% for the week, settling at $1,280.20 on the COMEX. NYMEX crude finished the week down at $93.65 a barrel; it is on a 5-week losing streak, its longest since November 2013.3,4
THIS WEEK: The Census Bureau publishes its July new home sales report on Monday. Tuesday brings quarterly results from Analog Devices, Smith & Wesson, Best Buy, TiVo and Bob Evans plus the June S&P/Case-Shiller home price index, the July hard goods orders report and the Conference Board’s August consumer confidence index. Wednesday offers earnings from Guess? and Brown-Forman. Thursday, NAR releases numbers on July pending home sales, the federal government issues its second estimate of Q2 GDP and new initial claims figures arrive; in addition, Bebe Stores announces Q2 results. Friday brings the University of Michigan’s final August consumer sentiment index and the July consumer spending report.
Sources: online.wsj.com, bigcharts.com, treasury.gov - 8/22/145,6,7,8
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This material was prepared by MarketingPro, 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 - investing.com/economic-calendar/ [8/22/14]
2 - 247wallst.com/economy/2014/08/21/leading-economic-indicators-show-continued-growth/ [8/21/14]
3 - markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [8/22/14]
4 - proactiveinvestors.com/companies/news/56376/gold-drops-2-for-the-week-oil-settles-below-94-56376.html [8/22/14]
5 - markets.wsj.com/us [8/22/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F22%2F13&x=0&y=0 [8/22/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F22%2F13&x=0&y=0 [8/22/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F22%2F13&x=0&y=0 [8/22/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F21%2F09&x=0&y=0 [8/22/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F21%2F09&x=0&y=0 [8/22/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F21%2F09&x=0&y=0 [8/22/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F23%2F04&x=0&y=0 [8/22/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F23%2F04&x=0&y=0 [8/22/14]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F23%2F04&x=0&y=0 [8/22/14]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/22/14]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/22/14]
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