Weekly Economic Update - January 24, 2011

Kip A. Hoover Presents:
WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE “Success is the sum of details.” – Harvey Firestone WEEKLY TIP If a major financial or life event is coming up on your calendar, talk to a financial or tax professional about it now. If you wait until after the event, you may pay an opportunity cost or find yourself with a higher tax bill. WEEKLY RIDDLE The Cage family has a mother, father and six sons, and each son has one sister. So how many people are in this family? Last week’s riddle: An interesting occurrence happened about 25 minutes on the clock and months and years on the calendar. What was this numerically interesting moment? Last week’s answer: Early on that afternoon, the time and date read 12:34 on 5/6/78.	January 24, 2011 TIME FOR OPTIMISM IN THE HOUSING MARKET?Existing home sales have improved in five of the past six months. In December, they rose 12.3%. While December’s sales pace was still 2.9% below year-ago levels, the National Association of Realtors also noted that the glut of unsold homes had been reduced to 8.1 months of supply compared to 9.5 months’ worth in November. The median existing home sale price fell 1.0% last month to $168,800.1,2                                                                                                                                                   LEI INDEX SHOWS MORE IMPROVMENTThe Conference Board’s Leading Economic Indicators index rose 1.0% in December. Pair that with its 1.1% ascent in November and you have the two best months since it rose 1.4% in March. The building permits indicator showed the most improvement.3 HOUSING STARTS DOWN, PERMITS WAY UP Government data seems to affirm one of the findings of the Conference Board index. The Census Bureau just reported a 16.7% increase in building permits in December (the best month in that category since March). Yet housing starts were down 4.3% in December, hitting a 14-month low.4 GOLD & OIL TURN LOWEROptimism about the global economy seems to have increased appetites for risk, and last week you also had the fear that China might hike interest rates. So gold lost 1.43% for the week to settle Friday at $1,341.00 an ounce. Oil prices plunged 3.74% on the week to end up at $89.11 a barrel Friday.5 DOW ADVANCES AGAIN The DJIA posted its eighth straight weekly gain, rising 0.72% across four market days to settle at 11,871.84 Friday. The S&P 500 (-0.76% to 1,283.35) and the NASDAQ (-2.39% to 2,689.54) saw weekly retreats.6 THIS WEEK: Monday brings earnings reports from McDonald’s, Halliburton, Amgen and American Express. Tuesday, we have the Conference Board’s latest consumer confidence index, the November Case-Shiller home price index and earnings from 3M, US Steel and Verizon. Wednesday brings an FOMC meeting and December new home sales figures plus earnings from Boeing, Netflix and Xerox. Thursday gives us weekly jobless claims figures, December durable goods orders and November pending home sales plus earnings from AT&T and Caterpillar. Friday offers earnings from Chevron and Honeywell, the final January University of Michigan consumer sentiment survey, and the first 4Q 2010 GDP estimate. % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +2.54 +14.26 +2.26 +1.22 NASDAQ +1.38 +18.71 +3.93 -0.25 S&P 500 +2.04 +14.95 +0.35 -0.44 REAL YIELD 1/21 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS 1.20% 1.29% 1.94% 3.52% Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 1/21/116,7,8,9 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
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«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. The fast price swings of commodities will result in significant volatility in an investors holdings Citations. 1 - marketwatch.com/story/existing-home-sales-jump-12-in-december-2011-01-20?dist=beforebell [1/20/11] 2 - philly.com/inquirer/business/20110121_Existing-home_sales_continue_to_climb.html [1/21/11] 3 - npr.org/2011/01/20/133083073/leading-indicators-rise-pointing-to-stronger-growth [1/20/11] 4 - theatlantic.com/business/archive/2011/01/housing-starts-sink-as-permits-soar-in-december/69759/ [1/19/11] 5 - blogs.wsj.com/marketbeat/2011/01/21/data-points-energy-metals-444/ [1/21/11] 6 - cnbc.com/id/41198149 [1/21/11] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=1%2F21%2F10&x=0&y=0 [1/21/11] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=1%2F21%2F10&x=0&y=0 [1/21/11] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=1%2F21%2F10&x=0&y=0 [1/21/11] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=1%2F20%2F06&x=0&y=0 [1/21/11] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=1%2F20%2F06&x=0&y=0 [1/21/11] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=1%2F20%2F06&x=0&y=0 [1/21/11] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=1%2F7%22F01&x=0&y=0 [1/21/11] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=1%2F7%22F01&x=0&y=0 [1/21/11] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=1%2F7%22F01&x=0&y=0 [1/21/11] 8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/21/11] 8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/21/11] 9 - treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]