Economic Update 3/4/13

March 4, 2013

   

DESPITE ANXIETIES, DOW STAYS ABOVE 14,000

The DJIA settled at 14,089.66 Friday, gaining 0.64% on the week. The S&P 500 (+0.17% to 1,518.20) and NASDAQ (+0.25% to 3,169.74) also logged five-day advances. All this happened in the face of significant instability, as Wall Street fretted over the deadlock in Italy’s national elections and the sequester cuts taking effect on March 1. Congress and the White House could not arrange a deal to delay the sequestration last week, which means that $85 billion will be subtracted from the budgets of government agencies between March 2 and October 1 unless a bipartisan agreement emerges to undo the cuts.1,2

TERRIFIC REAL ESTATE DATA HELPS BUOY STOCKS

New home buying accelerated 16% in January – the biggest monthly rise in almost 20 years, according to the Commerce Department. Pending home sales rose 4.5% in January, the National Association of Realtors said; that was far above the 1.0% gain forecast by economists polled by Briefing.com. Finally, the December edition of the S&P/Case-Shiller Home Price Index showed a 6.8% yearly gain across 20 metro markets, bettering November’s 5.5% impressive annualized increase.3,4

MANUFACTURING PMI RISES IN FEBRUARY

The Institute for Supply Management’s manufacturing PMI improved 1.1% in February to 54.2. While the Commerce Department noted a 5.2% overall retreat in durable goods orders in January (the first decline in four months), new orders rose 1.9% when the volatile transportation category was factored out.4,5

CONSUMER CONFIDENCE & SPENDING HOLD UP

The Conference Board’s February consumer confidence poll soared to 69.0 from January’s 58.4 mark, and the University of Michigan’s final February consumer sentiment survey came in at 77.6, topping the Reuters consensus forecast of 76.3. The federal government revised Q4 GDP north slightly to +0.1% last week; consumer spending rose 0.2% in January, even as consumer incomes fell 3.6%.1,4

THIS WEEK: Monday, Transocean announces Q4 earnings. Tuesday brings ISM’s latest non-manufacturing PMI and quarterly results from VeriFone. On Wednesday, Staples, American Eagle Outfitters, BigLots! and PetSmart issue quarterly earnings; February’s ADP employment report appears plus a new Federal Reserve Beige Book and data on January factory orders. The Bank of England and European Central Bank wrap up policy meetings Thursday, and a new Challenger job-cut report and earnings from H&R Block, Pandora, Kroger and Smithfield Foods appear. Friday, the February jobs report is out along with earnings from Ann and Foot Locker.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+7.52

+8.55

+2.97

+7.86

NASDAQ

+4.98

+6.05

+7.91

+13.70

S&P 500

+6.45

+10.49

+2.82

+8.05

REAL YIELD

3/1 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.67%

-0.23%

1.10%

1.77%

Sources: cnbc.com, bigcharts.com, treasury.gov – 3/1/131,6,7,8

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

These returns do not include dividends.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. 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 – http://www.cnbc.com/id/100511717 [3/1/13]

2 – http://www.reuters.com/article/2013/03/01/us-usa-fiscal-idUSBRE91P0W220130301 [3/1/13]

3 – http://www.mercurynews.com/real-estate/ci_22670982/new-home-sales-hit-highest-level-more-than [2/26/13]

4 – briefing.com/investor/calendars/economic/2013/02/25-01 [3/1/13]

5 – http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf [2/27/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F1%2F12&x=0&y=0 [3/1/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F1%2F12&x=0&y=0 [3/1/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F1%2F12&x=0&y=0 [3/1/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F29%2F08&x=0&y=0 [3/1/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F29%2F08&x=0&y=0 [3/1/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F29%2F08&x=0&y=0 [3/1/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F28%2F03&x=0&y=0 [3/1/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F28%2F03&x=0&y=0 [3/1/13]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F28%2F03&x=0&y=0 [3/1/13]

7 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/1/13]

8 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/1/13]

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Patrick Ray, and The Retirement Group or FSC Financial Corp. This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

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