Weekly Economic Update

WINTER DOESN’T DETER HOMEBUYERS  

According to the National Association of Realtors, existing home sales rose 0.8% in February. The sales pace hit 4.98 million units, a 39-month high. The inventory of homes for sale increased 9.6% last month, recovering from a six-and-a-half-year low reached the month before. In related news, housing starts were also up 0.8% in February, with the Census Bureau putting the 12-month increase at 27.7%. As for projects in the pipeline, building permits rose 4.6% last month, part of a 33.8% year-over-year climb. The latest Federal Housing Finance Agency index showed a 6.5% yearly advance in house prices.1,2,3

ANOTHER GAIN FOR THE CONFERENCE BOARD LEI

Seemingly reflective of the economy’s momentum, the Conference Board’s Leading Economic Index advanced for a third straight month. Its 0.5% February gain comes on the heels of an 0.5% rise in January and an 0.4% improvement in December.4

FED WILL KEEP EASING FOR THE NEAR FUTURE

Last week, Federal Reserve Chairman Ben Bernanke said that the central bank would keep up its monthly bond-buying effort until the economy showed more than “temporary improvement,” while noting that it might soon vary the size of those purchases in response to the pace of job growth. Bernanke reaffirmed that interest rates will stay at historic lows unless the jobless rate dips below 6.5%.5

RALLY WANES AS CYPRUS CRISIS BUILDS

On March 19, the Cypriot government turned down a European Central Bank offer to rescue its banking system. (The plan would have taxed depositors.) So the Dow lost 0.01% last week, the S&P 500 0.24% and the NASDAQ 0.13%. Friday, the Dow closed at 14,512.03, the S&P at 1,556.89 and the NASDAQ at 3,245.00. On the NYMEX, gold wrapped up the week at $1,607.10 and oil at $93.91.6,7

THIS WEEK: Cyprus must arrange or agree to a bailout deal by Monday or face suspended ECB aid; Dollar General reports Q4 results, and Ben Bernanke speaks in London. Tuesday, NAR posts February new home sales figures, data arrives on February hard goods orders, and a new Conference Board consumer confidence poll and January’s Case-Shiller Home Price Index appear. Wednesday, NAR reports February pending home sales; Red Hat and Paychex announce earnings. Blackberry, Accenture, Mosaic and GameStop report earnings Thursday, and the BEA makes its final estimate of Q4 GDP. March 29 is Good Friday, with U.S. financial markets closed (and banks open); March’s final University of Michigan consumer sentiment survey and the Commerce Department’s February consumer spending report arrive.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+10.74

+11.24

+3.48

+7.03

NASDAQ

+7.47

+5.93

+8.74

+12.82

S&P 500

+9.16

+11.78

+3.42

+7.38

REAL YIELD

3/22 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.60%

-0.08%

1.02%

2.29%

Sources: cnbc.com, bigcharts.com, treasury.gov – 3/22/136,8,9,10

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.marketwatch.com/story/home-sales-reach-highest-rate-since-2009-2013-03-21 [3/21/13]

2 – http://www.census.gov/construction/nrc/pdf/newresconst.pdf [3/22/13]

3 – http://www.foxbusiness.com/news/2013/03/21/us-home-prices-rise-06-in-january/ [3/21/13]

4 – http://www.conference-board.org/data/bcicountry.cfm?cid=1 [3/21/13]

5 – http://www.sfgate.com/news/article/Bernanke-Stimulus-hinges-on-sustained-improvement-4370751.php [3/20/13]

6 – http://www.cnbc.com/id/100582032 [3/22/13]

7 – online.wsj.com/mdc/public/page/mdc_commodities.html [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F22%2F12&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F22%2F12&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F22%2F12&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F20%2F08&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F20%2F08&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F20%2F08&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F21%2F03&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F21%2F03&x=0&y=0 [3/22/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F21%2F03&x=0&y=0 [3/22/13]

9 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/22/13]

10 – http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/22/13]

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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