Weekly Economic Update November 15, 2010

Kip A. HooverPresents:
WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE “Don’t let what you cannot do interfere with what you can do.”  – John Wooden WEEKLY TIP Take a look at your withholding – are you giving the IRS what amounts to an interest-free loan? If your federal refund was several hundred dollars or more, you may want to adjust your withholding to direct more funds toward reducing high-interest debts, rather than allowing them to earn 0% interest while you wait for your refund. WEEKLY RIDDLE It can be as round as a dishpan, as deep as a tub, and still the oceans couldn’t fill it up. What is it? Last week’s riddle: What 11-letter word must always be spelled incorrectly? Last week’s answer: Incorrectly.	November 15, 2010 A BIT OF OPTIMISM AMONG CONSUMERSThe initial November Thomson Reuters/University of Michigan consumer sentiment survey was released Friday. The index rose to 69.3, surpassing the 69.0 forecast by economists polled by Reuters. (Last month’s final reading was 67.7.) On average, respondents expected inflation of 3.0% across the next 12 months, compared to 2.7% in last month’s survey. Will this public perception give retailers a signal to subtly raise prices?1,2 WILD WEEK FOR GOLD & OILOil futures hit a 25-month peak last week, and then fell $2.93 on Friday (and $1.97 on the week) to a Friday close of $84.88 per barrel on the NYMEX. Oil lost 2.27% last week for its worst week since mid-September. After cracking the $1,400 ceiling last week, gold fell $37.70 on Friday; it was down 2.28% on the week and settled at $1,365.40 per ounce Friday on the Comex.3,4 WHITE HOUSE EYES SAVINGS; USPS CALLS FOR HELP A White House deficit commission has proposed $200 billion in spending cuts by 2015 in order to reduce the federal shortfall. Some of the listed recommendations include saving $13.2 billion by cutting federal payrolls by 10%, saving $16.0 billion by doing away with all earmarks, and saving $9.2 billion by freezing noncombat military pay at 2011 levels until 2015. On Friday, the U.S. Postal Service claimed it would go broke by the end of 2011 without service cutbacks and postal rate increases, announcing an $8.5 billion loss for the latest fiscal year.5.6 EQUITIES STRUGGLETwo factors weighed heavily on stocks last week: anxieties about China raising interest rates, and worries about the debt burdens of Ireland, Portugal, Greece and Spain. So from November 8-12, the three major U.S. indices performed as follows: DJIA, -2.20% to 11,192.58; S&P 500, -2.17% to 1,199.21; NASDAQ, -2.36% to 2,518.21.2 COMING NEXT WEEK: Monday, we have reports on October retail sales and September business inventories. Tuesday, we have the October PPI and October industrial output. Wednesday, we get the October CPI data plus reports on October housing starts and building permits. Thursday, we have the latest data on initial and continuing claims and the October leading indicators from the Conference Board. No economic releases are scheduled for next Friday, but Federal Reserve chairman Ben Bernanke will speak at the ECB Central Banking Conference. % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +7.33 +9.76 +0.95 +0.64 NASDAQ +10.98 +17.18 +2.87 -1.51 S&P 500 +7.54 +10.30 -0.58 -1.13 REAL YIELD 11/12 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS 0.71% 1.33% 2.07% 4.03% Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 11/12/102,7,8,9 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list.
«RepresentativeDisclosure» This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal advice. 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. Stock investing involves market risk including loss of principal The fast price swings of commodities will result in significant volatility in an investors holdings Citations. 1 - blogs.barrons.com/stockstowatchtoday/2010/11/12/stocks-still-struggle-despite-consumer-confidence-rise/ [11/12/10] 2 - cnbc.com/id/40155548 [11/12/10] 3 - cnbc.com/id/40140253/ [11/12/10] 4 - blogs.wsj.com/marketbeat/2010/11/12/data-points-energy-metals-400/ [11/12/10] 5 - blogs.wsj.com/economics/2010/11/10/deficit-commissions-200-billion-in-proposed-spending-cuts/ [11/10/10] 6 - reuters.com/article/idUSTRE6AB4ON20101112 [11/12/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=11%2F12%2F09&x=0&y=0 [11/12/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=11%2F12%2F09&x=0&y=0 [11/12/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=11%2F12%2F09&x=0&y=0 [11/12/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=11%2F11%2F05&x=0&y=0 [11/12/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=11%2F11%2F05&x=0&y=0 [11/12/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=11%2F11%2F05&x=0&y=0 [11/12/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=11%2F13%2F00&x=0&y=0 [11/12/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=11%2F13%2F00&x=0&y=0 [11/12/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=11%2F13%2F00&x=0&y=0 [11/12/10] 8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [11/12/10] 8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [11/12/10] 9 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]