Weekly Economic Update

HOW IS THIS EARNINGS SEASON TURNING OUT?

At the closing bell on May 10, 90% of S&P 500 firms had reported quarterly results. According to Reuters, 67% of them have surpassed earnings forecasts and 24% have fallen short of projections. Should the remaining 50 components report results matching estimates, earnings will be up 5.3% on last year. Sales gains are another story: just 46% of companies reporting so far have beaten their revenue forecasts.1,2

FED RAMPS UP ITS FINANCIAL SCRUTINY

Federal Reserve chairman Ben Bernanke said Friday that the central bank was now keeping close tabs on the “shadow banking” sector that bred the toxic assets associated with the last credit crisis. At the Chicago Fed’s banking conference, he noted that “careful monitoring for signs of emerging vulnerabilities” constituted “probably our best defense against complacency during extended periods of calm”. In widening its oversight, the Fed is also watching asset markets, consumers and businesses for signs of systemic risk in addition to banks.3

OIL MOVES HIGHER, GOLD LOSES GROUND

COMEX gold retreated 1.76% last week, and that was mirrored by silver’s 1.25% weekly loss; the dollar gained 1.25% across five days. NYMEX crude rose 0.45% for the week. At Friday’s close, oil settled at $96.04 and gold at $1,443.30.4

ANOTHER WEEK OF GAINS, MORE ALL-TIME HIGHS

The Dow went +0.97% last week to close at 15,118.49 Friday – a record high. The S&P 500 gained 1.19% last week to settle at another all-time peak of 1,633.70 Friday. After a 1.72% weekly gain, the NASDAQ ended Friday’s trading session at 3,436.58.1

THIS WEEK: The Commerce Department issues its April retail sales report Monday, and Anglogold Ashanti and Take Two Interactive announce Q1 results. Nothing major is scheduled for Tuesday. Wednesday, the April PPI comes out plus the May NAHB housing index and data on April industrial output; earnings from Macy’s, Cisco and Deere & Co. also appear. Thursday, April’s CPI arrives along with the latest initial claims figures, data on April housing starts and building permits, and a wave of earnings mostly from major retailers (Kohl’s, Wal-Mart, Nordstrom, JCPenney, Autodesk, Marvell Tech and Applied Materials). Friday brings the preliminary May consumer sentiment index from the University of Michigan and the Conference Board’s April leading indicators index.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+15.37

+17.61

+3.73

+7.57

NASDAQ

+13.81

+17.14

+8.11

+12.61

S&P 500

+14.55

+20.30

+3.54

+7.50

REAL YIELD

5/10 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.45%

-0.25%

1.39%

2.00%

Sources: cnbc.com, bigcharts.com, treasury.gov – 5/10/131,5,6,7

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. 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 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.

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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Citations.

1 – cnbc.com/id/100727118 [5/10/13]

2 – chicagotribune.com/business/sns-rt-us-usa-earnings-trendbre9490np-20130510,0,1017540.story [5/10/13]

3 – suntimes.com/business/20022861-420/bernanke-fed-increasing-financial-monitoring.html [5/10/13]

4 – news.goldseek.com/GoldSeeker/1368217251.php [5/10/13]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F10%2F12&x=0&y=0 [5/10/13]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F10%2F12&x=0&y=0 [5/10/13]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F10%2F12&x=0&y=0 [5/10/13]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F9%2F08&x=0&y=0 [5/10/13]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F9%2F08&x=0&y=0 [5/10/13]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F9%2F08&x=0&y=0 [5/10/13]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F9%2F03&x=0&y=0 [5/10/13]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F9%2F03&x=0&y=0 [5/10/13]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F9%2F03&x=0&y=0 [5/10/13]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/10/13]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/10/13]

Patrick Ray is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

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