Market Commentary – August 29th

///Market Commentary – August 29th

Market Commentary – August 29th

COULD SEPTEMBER BRING ANOTHER STIMULUS?
Could we see a QE3? Maybe. While Federal Reserve Chairman Ben Bernanke made no mention of a plan to aid the economy at last week’s Fed symposium in Wyoming, he did refer to “a range of tools that could be used to provide additional monetary stimulus” and noted that the Fed “will continue to consider those and other pertinent issues… at our meeting in September.” September’s FOMC meeting has now been lengthened to 2 days; make of that what you will. Bernanke said he expects improved GDP in the second half of 2011 and core inflation under 2%.1

NEW HOME SALES DECLINE, BUT HOME PRICES GO UPThe Census Bureau announced a 0.7% drop in new home sales in July; sales were up 6.8% from a year ago. The average sale price was $272,300, with 6.6 months of inventory on the market. Overall U.S. home prices rose 0.9% in June, said the Federal Housing Finance Agency (the best 1-month gain since September 2005).2,3

SURPRISE! DURABLE GOODS ORDERS RISE 4.0%
July figures from the Commerce Department far outpaced forecasts. Economists surveyed by Bloomberg News had expected a 2.0% increase. July saw an 11.5% gain orders for autos and auto parts – the biggest 1-month jump in demand since January 2003 – and a 43.4% leap in orders for commercial aircraft. Even with transportation orders factored out, orders for hard goods rose 0.7% last month.3

CONSUMERS PERCEIVE TOUGH TIMES
The final August Thomson Reuters/University of Michigan consumer sentiment survey came in at 55.7 – a bit of a rebound from the initial, abysmal 54.9 mark for the month. It is a long way from the high 80s (which is where the index routinely was before the Great Recession).4

BEST WEEK FOR STOCKS SINCE JUNE
Gold futures retreated, 2Q GDP was revised down to 1.0%, and stocks rallied. The 3 major Wall Street indices snapped 4-week losing streaks as follows: DJIA, +4.32% to 11,284.54; S&P 500, +4.74% to 1,176.80; NASDAQ, +5.89% to 2,479.85.4,5

THIS WEEK: Monday, the numbers come out on July consumer spending, and we also get a report on June pending home sales. Tuesday offers June’s Case-Shiller home price index and the Conference Board’s August snapshot of consumer confidence. July factory orders data comes out on Wednesday. In addition to weekly jobless claims figures, Thursday brings ISM’s August manufacturing index. On Friday morning, the July unemployment report is released.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-2.53

+13.01

+0.000009

+0.87

NASDAQ

-6.52

+17.05

+3.17

+2.97

S&P 500

-6.43

+12.37

-1.83

-0.0002

REAL YIELD

8/26 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.12%

0.95%

2.24%

3.50%

 
Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 8/26/115,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

Jeffrey Foster is a Registered Representative with, and securities are offered through LPL Financial, Member FINRA/SIPC.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. 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. 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. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. 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.

Citations.
1 – cnbc.com/id/44286314

[8/26/11] 2 – census.gov/const/newressales.pdf [8/23/11] 3 – bloomberg.com/news/2011-08-24/orders-for-durable-goods-in-u-s-increase-4-twice-as-much-as-estimated.html [8/24/11] 4 – businessweek.com/news/2011-08-26/u-s-michigan-consumer-sentiment-index-slumped-in-august.html [8/25/11] 5 – cnbc.com/id/44285944 [8/26/11] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F26%2F10&x=0&y=0 [8/26/11] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F26%2F10&x=10&y=18 [8/26/11] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F26%2F10&x=0&y=0 [8/26/11] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F25%2F06&x=0&y=0 [8/26/11] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F25%2F06&x=0&y=0 [8/26/11] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F25%2F06&x=0&y=0 [8/26/11] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F27%2F01&x=0&y=0 [8/26/11] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F127%2F01&x=0&y=0 [8/26/11] 6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F27%2F01&x=0&y=0 [8/26/11] 7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/26/11] 7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/26/11] 8 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01] 9 – montoyaregistry.com/Financial-Market.aspx?financial-market=wealth-planning-using-the-stretch-ira-strategy&category=4 [8/28/11]
By | 2017-11-20T15:21:22+00:00 August 30th, 2011|Weekly Market Commentary|