Weekly Economic Update

June 24, 2013

    

FED OUTLINES END FOR STIMULUS, STOCKS SLIP

Last Wednesday, Federal Reserve Chairman Ben Bernanke shared the central bank’s vision for winding down its current aggressive easing effort – the potential tapering of QE3 by late 2013, and the end of the program by mid-2014 if economic conditions permit. Wall Street reacted abruptly – the Dow sank more than 550 points in less than two trading sessions. In the near term, the Fed will keep buying $85 billion in bonds per month and maintain interest rates at near-zero levels.1,2

INFLATION PRESSURE MINIMAL IN MAY

The 0.1% rise in the Consumer Price Index last month put yearly inflation at 1.4%, well under the Fed’s 2.0% target. Energy prices rose 0.4% in May but fell 1.0% in a year; medical costs declined 0.1% for May, the first monthly decrease since 1975.3

EXISTING HOME SALES IMPROVE

The National Association of Realtors reported a 4.2% jump in residential resales for May, with the annualized sales pace topping the 5 million mark for the first time in 3½ years. From May 2012 to May 2013, the median price of an existing home rose 15.4% to $208,000 as the number of listings on the market shrank 10.1%.4

LEADING INDICATORS EDGE NORTH 0.1% IN MAY

Slight improvement was seen in the Conference Board’s latest barometer of the economic outlook for the next 3-6 months, but economists surveyed by Bloomberg thought it would rise 0.2%. April’s gain was revised up to 0.8%.4

A WILD RIDE FOR STOCKS

Volatility was rampant last week on Wall Street, and so were losses. In five days, the S&P 500 slipped 2.11% to 1,592.43, the Dow lost 1.80% to 14,799.40 and the NASDAQ fell 1.94% to 3,357.25.5

THIS WEEK: Nothing major is scheduled for Monday. Tuesday brings the April Case-Shiller and FHFA home price indices, the Conference Board’s June consumer confidence poll, reports on May hard goods orders and new home sales and earnings from Lennar, Carnival, Walgreens and Barnes & Noble. Wednesday, the Bureau of Economic Analysis publishes its final estimate of Q1 GDP, and earnings arrive from Monsanto, Bed Bath & Beyond and General Mills. The latest initial jobless claims figures come in Thursday, along with NAR’s report on May pending home sales, the Commerce Department’s report on May consumer spending and earnings news from KBHome, ConAgra, Nike and Accenture. Friday brings the final June University of Michigan consumer sentiment survey and earnings from Blackberry.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+12.94

+17.70

+4.99

+6.08

NASDAQ

+11.19

+17.42

+7.91

+10.41

S&P 500

+11.66

+20.14

+4.17

+5.99

REAL YIELD

6/21 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.59%

-0.47%

1.72%

1.77%

Sources: cnbc.com, usatoday.com, bigcharts.com, treasury.gov – 6/21/135,6,7,8,9

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 – cnbc.com/id/100831276 [6/20/13]

2 – foxbusiness.com/markets/2013/06/19/wall-street-pummeled-amid-fed-woes/ [6/19/13]

3 – online.wsj.com/article/SB10001424127887323566804578553151902340728.html [6/18/13]

4 – bloomberg.com/news/2013-06-20/sales-of-previously-owned-u-s-homes-rise-more-than-forecast.html [6/20/13]

5 – cnbc.com/id/100834381 [6/21/13]

6 – usatoday.com/money/markets/overview/ [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F21%2F12&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F21%2F12&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F21%2F12&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F20%2F08&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F20%2F08&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F20%2F08&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F20%2F03&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F20%2F03&x=0&y=0 [6/21/13]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F20%2F03&x=0&y=0 [6/21/13]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/21/13]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/21/13]

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of Albert Aizin, 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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Albert Aizin is a Representative with FSC Securities and may be reached at http://www.theretirementgroup.com.

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