Weekly Economic Update

CHECKING IN ON THE CONSUMER

According to the Commerce Department, consumer spending improved 0.3% in May as consumer incomes increased 0.5%. The latest household sentiment polls seemed to reflect the good news. The Conference Board’s consumer confidence gauge hit 81.4 in June, the best mark since January 2008; the University of Michigan’s final June survey came in at 84.1, up from a preliminary reading of 82.7.1,2

Q1 GDP REVISED SIGNIFICANTLY DOWNWARD

The initial 2.4% estimate by the Bureau of Economic Analysis was scaled down to just 1.8% last week. Stocks advanced after the announcement, as less economic growth may give the Federal Reserve less incentive to taper QE3.3

IMPRESSIVE GAINS IN REAL ESTATE INDICATORS

New home sales rose another 2.1% in May, taking the annualized increase to 29.0%. In addition to that news from the Census Bureau, the National Association of Realtors reported a 6.7% rise in pending home sales in May (and a 12.1% yearly improvement in the category). The Case-Shiller Home Price Index had its best month ever: a 2.5% April gain with prices rising 12.1% in 12 months. Not all the news from the housing sector was positive – Freddie Mac said that the average rate on a 30-year home loan hit 4.46% last week, the highest in almost two years.1,4,5,6

SOLID WEEK, SOLID QUARTER, SUPERB FIRST HALF

The Dow advanced 0.74% for the week to 14,909.60, the S&P 500 rose 0.87% for the week to reach 1,606.28, and the NASDAQ wrapped up June at 3,403.25 after a 1.37% weekly gain. While the second quarter saw a 32.36% rise in the CBOE VIX, it also brought gains of 2.27% for the DJIA, 4.15% for the NASDAQ and 2.36% for the S&P, even as all three indices lost ground in June. The YTD gain below represents the DJIA’s best first half of a year since 1999.7

THIS WEEK: On Monday, ISM presents its manufacturing PMI for June and the Census Bureau offers data on May construction spending. Tuesday brings federal government reports on May factory orders and June auto buying, and earnings from Constellation Brands. Wednesday, ISM puts out its June service sector PMI, and the latest initial jobless claims figures, the June ADP employment report and the June Challenger job-cut report all arrive; the NYSE wraps up trading at 1:00pm EST. Thursday is July 4th; correspondingly, America’s financial markets are closed. The Labor Department presents its June jobs report Friday, which is also when the biggest U.S. banks provide midyear stress test results to the Federal Reserve.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+13.78

+18.31

+6.28

+6.59

NASDAQ

+12.71

+19.43

+9.39

+10.94

S&P 500

+12.63

+20.86

+5.13

+6.45

REAL YIELD

6/28 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.53%

-0.48%

1.48%

1.90%

Sources: cnbc.com, bigcharts.com, treasury.gov – 6/28/137,8,9,10

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. 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.

Citations.

1 – nytimes.com/2013/06/28/business/economy/consumer-spending-and-home-sales-were-up-in-may.html [6/28/13]

2 – reuters.com/article/2013/06/28/us-usa-economy-sentiment-idUSBRE95R0MA20130628 [6/28/13]

3 – marketwatch.com/story/us-first-quarter-gdp-cut-to-18-from-24-2013-06-26 [6/26/13]

4 – census.gov/construction/nrs/pdf/newressales.pdf [6/26/13]

5 – reuters.com/article/2013/06/25/us-usa-economy-homes-index-idUSBRE95O0PH20130625 [6/25/13]

6 – freddiemac.com/pmms/ [6/28/13]

7 – cnbc.com/id/100852152 [6/28/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F28%2F12&x=0&y=0 [6/28/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F28%2F12&x=0&y=0 [6/28/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F28%2F12&x=0&y=0 [6/28/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F27%2F08&x=0&y=0 [6/28/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F27%2F08&x=0&y=0 [6/28/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F27%2F08&x=0&y=0 [6/28/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F27%2F03&x=0&y=0 [6/28/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F27%2F03&x=0&y=0 [6/28/13]

8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F27%2F03&x=0&y=0 [6/28/13]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/28/13]

10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/28/13]

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