WEEKLY ECONOMIC UPDATE December 6, 2010

Kip A. Hoover Presents:
WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE “Nothing will ever be attempted, if all possible objections must be first overcome.”  – Samuel Johnson WEEKLY TIP Have you taken a Required Minimum Distribution from your IRA yet? If you are age 70½ or older, it’s time. If you are taking your very first RMD, you can put it off until April 1 of next year - but if you do that, you’ll have to take two RMDs in 2011. The RMD deadline for most IRA owners aged 70½ or older is December 31. WEEKLY RIDDLE What do these words have in common: pig, pony, bob, dove and cotton? Last week’s riddle: What has exactly three feet, but not a single toe? Last week’s answer: A yardstick.	December 6, 2010 JOBLESS RATE INCREASES BY 0.2% Unemployment hit 9.8% last month. The latest Bureau of Labor Statistics report said the economy only created 39,000 new jobs in November; economists expected three times that. After all, ADP reported 93,000 new positions in the private sector last Wednesday, and the revised government estimate for October showed the economy adding 172,000 jobs in that month. Labor Department figures indicate that the unemployed and underemployed now make up around 17% of the population.1,2 SECOND POLL GAUGES CONFIDENCE AT 5-MONTH HIGHThe Conference Board’s consumer confidence index rose to 54.1 for November, reaching a peak unseen since June (which is exactly what happened last week with the University of Michigan’s consumer poll). Sub-indices measuring employment expectations and income expectations also improved.3 SOME GOOD NEWS FROM THE REAL ESTATE SECTOR Pending home sales increased by 10.4% in October, according to the National Association of Realtors. This would seem to suggest better numbers for existing home sales in November. NAR’s pending home sales index is now back at the level it was before the appearance of the federal home buyer tax credit.4 ISM INDEXES BOTH AT 55 OR BETTER The closely-watched manufacturing and non-manufacturing sector surveys from the Institute for Supply Management show moderate growth. The manufacturing index declined to 56.6 from October’s 56.9 mark; the service sector index improved from 54.3 in October to 55.0 in November. The manufacturing index showed a 7.7% slump in production for November; the service sector index showed 4.0% gains in export orders and inventories.5 DECEMBER GETS OFF TO A BULLISH START In the first three days of December, the S&P 500 gained 3.74% as Black Friday sales numbers and reassurance from the European Central Bank aided Wall Street. Gold closed at a record $1406.20 an ounce Friday. For the week, the big three U.S. indices performed as follows: DJIA, +2.62% to 11,382.09; S&P 500, +2.97% to 1,224.71; NASDAQ, +2.24% to 2,591.46 (its highest close in 35 months).6,7 COMING NEXT WEEK: It is a light week in terms of major economic releases. Wednesday, we get initial and continuing jobless claims data and learn about October wholesale inventories. Thursday, we have the University of Michigan’s first consumer sentiment survey for December. % CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG DJIA +9.12 +9.80 +0.93 +0.78 NASDAQ +14.20 +19.25 +2.80 -0.93 S&P 500 +9.81 +11.35 -0.64 -0.76 REAL YIELD 12/3 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO 10 YR TIPS 0.86% 1.24% 2.16% 4.03% Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 12/3/106,8,9,10 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. Citations. 1 - forbes.com/2010/12/03/markets-briefing-open-jobs-equities-unemployment.html [12/3/10] 2 - ocregister.com/articles/rate-278642-november-time.html [12/3/10] 3 - bloomberg.com/news/2010-11-30/stocks-in-u-s-pare-retreat-after-consumer-confidence-report-tops-estimate.html [11/30/10] 4 - online.wsj.com/article/SB10001424052748703377504575650470810345484.html [12/3/10] 5 - ism.ws/ISMReport/nonmfgROB.cfm [12/3/10] 6 - cnbc.com/id/40496761 [12/3/10] 7 - money.cnn.com/2010/12/03/markets/markets_newyork/index.htm [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=12%2F3%2F09&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=12%2F3%2F09&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=12%2F3%2F09&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=12%2F2%2F05&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=12%2F2%2F05&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=12%2F2%2F05&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=12%2F4%2F00&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=12%2F4%2F00&x=0&y=0 [12/3/10] 8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=12%2F4%2F00&x=0&y=0 [12/3/10] 9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [12/3/10] 9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [12/3/10] 10 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]