Weekly Economic Update 5/3/2010

Written by Ryan L. Sheppard, CCPS | 03 May 2010

Quote of the week. “The basic difference between being assertive and being aggressive is how our words and behavior affect the rights and well-being of others.” – Sharon Anthony Bower

Good solid growth. On Friday, the Commerce Department estimated 1Q GDP at +3.2%, marking the third positive quarter in a row. What drove the gain? Consumer spending was up 3.6% in the quarter, and business spending on equipment and software increased by 13.4%.

Year-over-year gain in home prices. That’s what the February S&P/Case-Shiller Home Price Index revealed. Across 20 cities, prices rose 0.6% from February 2009 levels. This is the first yearly advance recorded by the index since December 2006, though prices were down 0.9% from January.

The latest consumer barometers. One went north, another south: the final Reuters/University of Michigan consumer sentiment index for April dipped to 72.2, down from 73.6 in March but above the 71.0 forecast by analysts polled by Bloomberg News. The Conference Board’s April survey rose to 57.9 from March’s 52.3 – this is the best mark since September 2008.

Gold’s major gain. Across last week, gold prices climbed $27.00 to settle at $1,180.10 per ounce Friday. April was gold’s best month since November. Oil futures advanced $1.03 last week, ending Friday at $86.15 a barrel on the NYMEX.

A trying week for stocks. Last week, Standard & Poor’s downgraded the debt ratings of Spain, Portugal and Greece; federal prosecutors also moved to investigate Goldman Sachs. The Dow lost 1.8% on the week to end at 11,008.61 Friday. The NASDAQ and S&P 500 also had down weeks. However, the monthly numbers for April were as follows: DJIA, +1.40%; NASDAQ, +2.64%; S&P 500, +1.48%.

% Change     Y-T-D     1-Yr Chg     5-Yr Avg     10-Yr Avg
DJIA              +5.57     +34.78        +1.60         +0.18
NASDAQ       +8.46    +43.32         +5.62           -3.78
S&P 500       +6.42     +35.96         +0.52         -1.92

(Source: CNBC.com, BigCharts.com, ustreas.gov, bls.gov, 4/30/10)
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Weekly Economic Update 4/19/2010

Written by Ryan L. Sheppard, CCPS | 20 April 2010

Quote of the week. “The need for mystery is greater than the need for an answer.” – Ken Kesey

A little less confidence. The preliminary April Reuters/University of Michigan consumer sentiment survey came in at 69.5, versus 73.6 at the end of March. Interestingly, the survey’s expectations index slipped to its lowest level in 13 months.

More minimal inflation. The Consumer Price Index advanced 0.1% in March; with food and energy prices factored out, core CPI was flat. Overall CPI increased by 2.3% during the past 12 months of data.

Car buying drives retail sales. A 6.7% rise in the demand for autos sent retail purchases 1.6% higher for March. That even beat the 1.3% gain forecast by economists polled by MarketWatch.

Manufacturing up 0.9% last month. So noted the Federal Reserve last week. Total industrial output rose 0.1% in March; economists surveyed by Dow Jones Newswires thought we would see a 0.8% gain.

Housing starts up 1.6% for March. Besides that statistic, the Commerce Department also announced some other good news: the 5.9% February slip in this category has been revised to a 1.1% gain.

SEC suit sends market down. The Securities and Exchange Commission sued Goldman Sachs Group for securities fraud over the structuring and marketing of a subprime mortgage product Friday, and stock indexes fell, ending six days of gains. The Dow (+0.19%) and NASDAQ (+1.11%) still advanced for the week. The S&P 500 lost 0.19% last week.

% Change    Y-T-D    1-Yr Chg     5-Yr Avg    10-Yr Avg
DJIA               +5.66     +35.61        +1.85         +0.41
NASDAQ       +9.35     +48.54          +6.01       -2.99
S&P 500       +6.91       +37.77       +0.87         -1.49