Articles for March 2013

CFGIowa Weekly Economic Update – March 25, 2013

WINTER DOESN’T DETER HOMEBUYERS  

According to the National Association of Realtors, existing home sales rose 0.8% in February. The sales pace hit 4.98 million units, a 39-month high. The inventory of homes for sale increased 9.6% last month, recovering from a six-and-a-half-year low reached the month before. In related news, housing starts were also up 0.8% in February, with the Census Bureau putting the 12-month increase at 27.7%. As for projects in the pipeline, building permits rose 4.6% last month, part of a 33.8% year-over-year climb. The latest Federal Housing Finance Agency index showed a 6.5% yearly advance in house prices.1,2,3

ANOTHER GAIN FOR THE CONFERENCE BOARD LEI

Seemingly reflective of the economy’s momentum, the Conference Board’s Leading Economic Index advanced for a third straight month. Its 0.5% February gain comes on the heels of an 0.5% rise in January and an 0.4% improvement in December.4

FED WILL KEEP EASING FOR THE NEAR FUTURE

Last week, Federal Reserve Chairman Ben Bernanke said that the central bank would keep up its monthly bond-buying effort until the economy showed more than “temporary improvement,” while noting that it might soon vary the size of those purchases in response to the pace of job growth. Bernanke reaffirmed that interest rates will stay at historic lows unless the jobless rate dips below 6.5%.5

RALLY WANES AS CYPRUS CRISIS BUILDS

On March 19, the Cypriot government turned down a European Central Bank offer to rescue its banking system. (The plan would have taxed depositors.) So the Dow lost 0.01% last week, the S&P 500 0.24% and the NASDAQ 0.13%. Friday, the Dow closed at 14,512.03, the S&P at 1,556.89 and the NASDAQ at 3,245.00. On the NYMEX, gold wrapped up the week at $1,607.10 and oil at $93.91.6,7

THIS WEEK: Cyprus must arrange or agree to a bailout deal by Monday or face suspended ECB aid; Dollar General reports Q4 results, and Ben Bernanke speaks in London. Tuesday, NAR posts February new home sales figures, data arrives on February hard goods orders, and a new Conference Board consumer confidence poll and January’s Case-Shiller Home Price Index appear. Wednesday, NAR reports February pending home sales; Red Hat and Paychex announce earnings. Blackberry, Accenture, Mosaic and GameStop report earnings Thursday, and the BEA makes its final estimate of Q4 GDP. March 29 is Good Friday, with U.S. financial markets closed (and banks open); March’s final University of Michigan consumer sentiment survey and the Commerce Department’s February consumer spending report arrive.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+10.74

+11.24

+3.48

+7.03

NASDAQ

+7.47

+5.93

+8.74

+12.82

S&P 500

+9.16

+11.78

+3.42

+7.38

REAL YIELD

3/22 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.60%

-0.08%

1.02%

2.29%

 

Sources: cnbc.com, bigcharts.com, treasury.gov – 3/22/136,8,9,10 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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Disclosure
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. 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 – www.marketwatch.com/story/home-sales-reach-highest-rate-since-2009-2013-03-21 [3/21/13]
2 – www.census.gov/construction/nrc/pdf/newresconst.pdf [3/22/13]
3 – www.foxbusiness.com/news/2013/03/21/us-home-prices-rise-06-in-january/ [3/21/13]
4 – www.conference-board.org/data/bcicountry.cfm?cid=1 [3/21/13]
5 – www.sfgate.com/news/article/Bernanke-Stimulus-hinges-on-sustained-improvement-4370751.php [3/20/13]
6 – www.cnbc.com/id/100582032 [3/22/13]
7 – online.wsj.com/mdc/public/page/mdc_commodities.html [3/22/13
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F22%2F12&x=0&y=0 [3/22/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F22%2F12&x=0&y=0 [3/22/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F22%2F12&x=0&y=0 [3/22/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F20%2F08&x=0&y=0 [3/22/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F20%2F08&x=0&y=0 [3/22/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F20%2F08&x=0&y=0 [3/22/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F21%2F03&x=0&y=0 [3/22/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F21%2F03&x=0&y=0 [3/22/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F21%2F03&x=0&y=0 [3/22/13]
9 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/22/13]
10 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/22/13]

CFGIowa Weekly Economic Update – March 18, 2013

RETAILERS RECEIVE A MAJOR BOOST

Higher payroll taxes don’t seem to have hurt shopping or driving: the Commerce Department noted a 1.1% improvement in retail sales for February. As gas station receipts increased 5.0% and auto sales 1.1% last month, there was also a 0.4% gain in core retail sales and a 0.5% rise in department store and discount store sales.1

NO SURPRISE: HIGHER GAS PRICES PROMPT CPI GAIN

February’s 0.7% gain in the Consumer Price Index was heavily influenced by the rising cost of fuel – minus food and energy costs, the core CPI rose just 0.2%. The Labor Department also reported a 0.7% rise in the Producer Price Index last month, compared with 0.2% for January.2,3

MORTGAGE RATES HIT A 7-MONTH PEAK

In its March 14 national survey, Freddie Mac estimated the average interest rate on a conventional 30-year home loan at 3.63% (the highest since August). Average rates for 15-year fixed mortgages were at 2.79%.4

HOUSEHOLD CONFIDENCE FLAGS

The University of Michigan’s preliminary March survey of consumer sentiment fell to 71.8, down 5.8 points from its final February mark. This was the lowest reading since December 2011.2

DOW LOGS FOURTH STRAIGHT WEEKLY ADVANCE

The DJIA rose 0.81% from March 11-15, settling Friday at 14,514.11. (A down Friday broke a 10-day winning streak for the index.) The S&P 500 (+0.61% to 1,560.70) posted its third straight weekly gain, as did the NASDAQ (+0.14% to 3,249.07). Gold settled Friday at $1,591.30 on the COMEX, oil at $93.58 on the NYMEX.5,6

THIS WEEK: The March NAHB housing market index appears Monday. Tuesday brings earnings from Adobe and DSW and data on February housing starts and building permits. The Federal Reserve concludes its March policy meeting Wednesday; also, quarterly results arrive from FedEx, Oracle and General Mills. Lululemon, Ross Stores, and Nike announce earnings on Thursday, which is also when NAR notes February existing home sales; the Conference Board’s February index of leading indicators and the FHFA housing price index for January also appear. Friday brings earnings from Darden Restaurants, Tiffany and KBHome.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+10.76

+9.52

+4.29

+8.47

NASDAQ

+7.60

+6.30

+9.37

+14.25

S&P 500

+9.43

+11.27

+4.23

+8.73

REAL YIELD

3/15 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.55%

-0.08%

1.01%

1.89%

Sources: cnbc.com, bigcharts.com, treasury.gov – 3/15/135,7,8,9

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 send us their address (click the link). We will contact them first and request their permission to add them to our list.


Disclosure
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 – www.csmonitor.com/Business/2013/0313/Retail-sales-rise.-Shoppers-unfazed-by-payroll-tax-hike [3/13/13]
2 – www.nytimes.com/2013/03/16/business/economy/consumer-inflation-jumps.html [3/15/13]
3 – www.nasdaq.com/article/stock-market-news-for-march-15-2013-market-news-cm227573#.UUOIDVdXqXk [3/15/13]
4 – www.usatoday.com/story/money/business/2013/03/14/30-year-fixed-mortgage-rates/1987243/ [3/14/13]
5 – www.cnbc.com/id/100557676 [3/15/13]
6 – online.wsj.com/mdc/public/page/mdc_commodities.html [3/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F15%2F12&x=0&y=0 [3/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F15%2F12&x=0&y=0 [3/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F15%2F12&x=0&y=0 [3/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F14%2F08&x=0&y=0 [3/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F14%2F08&x=0&y=0 [3/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F14%2F08&x=0&y=0 [3/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F14%2F03&x=0&y=0 [3/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F14%2F03&x=0&y=0 [3/15/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F14%2F03&x=0&y=0 [3/15/13]
8 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/15/13]
9 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/15/13]

CFGIowa Weekly Economic Update – March 11, 2013

HIRING HAS REALLY PICKED UP

During June-August 2012, non-farm payrolls grew by an average of 135,000 jobs a month. Across September-November, that average improved to 181,000 per month. From December-February, the economy added an average of 191,000 jobs a month. The icing on the cake: the latest monthly report from the Labor Department showed 236,000 new jobs generated in February, including the biggest monthly surge of hiring in the construction industry in six years. Unemployment fell to a four-year low of 7.7% in February, but the percentage of Americans either working or looking for work hit a 30-year low – 130,000 people dropped out of the job hunt.1

KEY INDEX SHOWS HEALTHY SERVICE SECTOR

The Institute for Supply Management’s non-manufacturing PMI came in at 56.0 for February – the best reading in 12 months, up from 55.2 in January. ISM noted a 3.8% increase in new orders, a 5.5% rise in backlogs of orders and a 3.7% gain in prices last month.2

BEIGE BOOK ENCOURAGES, BUT FACTORY ORDERS DIP

The Federal Reserve’s latest “Beige Book” survey of economic conditions noted modest growth in most of its 12 districts since January, with increased hiring a major factor. Last week, the Commerce Department reported a 1.2% rise in wholesale inventories and a 2.0% drop in factory orders for January.3,4

MORE HISTORY IS MADE

A 2.18% weekly gain brought the DJIA to a new record close of 14,397.07 Friday. The S&P 500 (+2.17% to 1,551.18), NASDAQ (+2.35% to 3,244.37) and Russell 2000 (+3.04% to 942.50) also had terrific weeks. As for the CBOE VIX, it dropped 17.84% in five days to finish last week at 12.62. Gold ended the week at $1,577.7o per ounce on the COMEX, oil at $91.88 a barrel on the NYMEX.4,5

THIS WEEK: On Monday, earnings reports arrive from Urban Outfitters and Dick’s Sporting Goods. Costco reports earnings on Tuesday. Wednesday, the Census Bureau gives us retail sales figures for February, the Commerce Department notes January business inventories, and Express, Inc. announces quarterly results. February’s PPI arrives Thursday, plus Q4 results from Aeropostale. Friday is a quadruple witching day that also sees the release of the February CPI, data on February industrial output, and the preliminary March consumer sentiment survey from the University of Michigan.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+9.87

+11.54

+4.21

+8.60

NASDAQ

+7.45

+9.22

+9.33

+14.86

S&P 500

+8.76

+13.56

+3.99

+8.71

REAL YIELD

3/8 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.50%

-0.21%

1.01%

1.72%

 

Sources: cnbc.com, bigcharts.com, treasury.gov – 3/8/134,6,7,8Indices 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 send us their address (click the link). We will contact them first and request their permission to add them to our list.


Disclosure:
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. 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 – www.mercurynews.com/business/ci_22746707/us-adds-236k-jobs-unemployment-falls-7-7 [3/8/13]
2 – www.ism.ws/ISMReport/NonMfgROB.cfm [3/5/13]
3 – online.wsj.com/article/SB10001424127887324178904578343432769615600.html [3/6/13]
4 – www.cnbc.com/id/100537377 [3/8/13]
5 – online.wsj.com/mdc/public/page/mdc_commodities.html [3/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F8%2F12&x=0&y=0 [3/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F8%2F12&x=0&y=0 [3/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F8%2F12&x=0&y=0 [3/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F7%2F08&x=0&y=0 [3/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F7%2F08&x=0&y=0 [3/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F7%2F08&x=0&y=0 [3/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F7%2F03&x=0&y=0 [3/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F7%2F03&x=0&y=0 [3/8/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F7%2F03&x=0&y=0 [3/8/13]
7 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/8/13]
8 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/8/13]

CFGIowa Monthly Economic Update March 2013

March 2013

THE MONTH IN BRIEF

As February ended, a central question seemed to preoccupy Wall Street: “When will the Dow hit a new record high?” Nothing seemed to shake the Street’s upbeat mood – not the $85 billion in federal budget cuts slated for March 1, not the real estate bubble in China or political uncertainty in Italy, not the still-anemic Q4 GDP reading or the abrupt decline in personal incomes. All told, the data stream offered much to keep Wall Street in a good mood: impressive numbers from the housing sector, rebounding consumer sentiment, continuing expansion in the manufacturing and service sectors. So the Dow ended the month at 14,054.49, with bulls holding an unyielding belief that it could reach a new all-time high in March – and the index did just that.1,2

DOMESTIC ECONOMIC HEALTH

February wrapped up with no agreement between Congress and the White House to postpone the sequestration – a 9% budget reduction for domestic programs, a 13% reduction for defense programs and a 2% cut in Medicare payments to physicians. March 27 presents a deadline for an appropriations bill to keep federal government operations sufficiently funded; the sequester cuts might be retroactively altered or undone as a result.3

Word came from the Commerce Department that consumer incomes fell 3.6% in January, a clear effect of higher payroll taxes. Yet consumer spending held up, rising 0.2% in that month. So did consumer sentiment: the University of Michigan’s monthly index was at 77.6 in February, and the Conference Board’s consumer confidence poll soared to 69.0 last month, even with the jobless rate at 7.9%.4,5

If a rising stock market and general perception of an improving economy influenced the above numbers, tame inflation may have as well. In January, the Consumer Price Index was flat again. Retail prices had only increased 1.6% in 12 months. The troubling asterisk: core CPI (with food and energy prices factored out) rose 0.3% in January, a gain unmatched since May 2011. Also, retail sales increased just 0.1% in January compared to 0.5% in December. Wholesale inflation (as measured by the federal government’s Producer Price Index) was up 0.2% for January, and had increased 1.4% in the past year.6,7,8

The world certainly pays attention to the Institute for Supply Management’s twin purchasing manager indices, and the latest readings on the economy from ISM have been quite positive. Its non-manufacturing index rose to 54.2 in February (the best mark since June 2011) while its service sector index read 56.0 last month, up from 55.2 in January for the highest reading in 12 months.9,10

When the Federal Reserve’s January policy meeting minutes came out, they raised eyebrows – the Federal Open Market Committee had agreed to review its easy money policies in March, perhaps signaling an earlier-than-expected end to QE3. The Bureau of Economic Analysis revised its estimate of Q4 GDP to +0.1%.5,11

GLOBAL ECONOMIC HEALTH

By the end of the month, Wall Street had one eye on China and another on Italy. The PRC finally set some limits on its runaway real estate market, imposing a whopping 20% capital gains tax on real property sales, demanding higher mortgage rates and down payments and requiring cities to adopt yearly price easing targets for their housing markets. China’s manufacturing PMIs barely showed expansion in February: the official PRC PMI came in at 50.1, while the HSBC PMI read 50.4. The People’s Bank of China forecasts 3% inflation in 2013, compared to 2.6% in 2012; Bloomberg sees China’s economy growing 8.1% in 2013, up from the 13-year low of 7.8% recorded by its government last year. 12,13

Italy’s national election produced a deadlock, raising fears that austerity measures stipulated by the European Central Bank could be rejected. Incumbent Prime Minister Mario Monti had been effectively challenged by Beppe Grillo, a populist fiercely opposed to the euro, and – of all people – disgraced former Prime Minister Silvio Berlusconi. (Italy’s jobless rate hit a 21-year peak of 11.7% in February.) On the upside, European Commission president José Manuel Barroso announced a federal surplus in Ireland and smaller payment imbalances for Italy, Portugal, Spain, and Greece. On the downside, the smaller deficits for those last four nations could be traced largely to a reduction in imports stemming from sinking demand.4,14

WORLD MARKETS

Foreign benchmarks experienced much more turbulence than ours last month. A list of some losses: Hang Seng, -3.29%; NIFTY 50, -6.55%; MERVAL, -11.95%; Bovespa, -3.91%; Euro STOXX 50, -2.57%; CAC 40, -0.26%; DAX, -0.44%; MSCI World Index, -0.02%; MSCI Emerging Markets Index, -1.35%. The gains: S&P/ASX 200, +3.27%; KOSPI, +3.51%; TOPIX, +3.79%; FTSE 100, +1.34%; TSX Composite, +1.08%; S&P Asia 50, +0.52%.1,15

COMMODITIES MARKETS

When was the last time gold racked up a five-month losing streak on the COMEX? You have to go back to 1997 to find another example of that, yet that was its dubious achievement in February. All key metals seemed to retreat last month: gold went 5.0%, silver -9.3%, copper -4.9%, platinum -5.5% and palladium -1.5%. Gold settled at just $1,572.30 on the COMEX on February 28. The perception of an improving economy also hurt oil, which ended February at $92.05 a barrel, its lowest NYMEX settlement price of the year. (It would head lower in early March). Natural gas futures, rose 4.4% in February. The U.S. Dollar Index rose 3.46% last month.16,17,18

REAL ESTATE

Could a seller’s market be emerging? That possibility doesn’t seem so absurd given the latest round of indicators. Existing home sales had improved 0.4% in January even as the inventory of homes reached its lowest level April 2005, the National Association of Realtors noted; year-over-year, home prices were up 12.9%. NAR also found pending home sales rising 4.5% in January, and December’s S&P/Case-Shiller Home Price Index recorded a 6.8% 12-month increase. January also saw a 15.6% jump in new home sales, which had increased 28.9% in a year.19,20,21,22

Between January 31 and February 28, home loan rates generally decreased. In that interval (according to Freddie Mac), the average interest rate on the 30-year FRM went from 3.53% to 3.51%. Average rates for the 15-year FRM went from 2.81% to 2.76%; the 5/1-year ARM, 2.70% to 2.61%; the 1-year ARM, 2.59% to 2.64%.23

LOOKING BACK…LOOKING FORWARD

In addition to the gains logged by the big three in February, the Russell 2000 rose 1.00% to end the month at 911.11. The DJIA ended February at 14,054.49, the NASDAQ at 3,160.19 and the S&P 500 at 1,514.68.1,24

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+7.25

+1.40

+8.51

+7.81

NASDAQ

+4.66

+0.57

+6.52

+13.63

S&P 500

+6.20

+1.11

+10.91

+8.01

REAL YIELD

2/28 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.64%

0.28%

1.10%

1.77%

Sources: online.wsj.com, bloomberg.com, bigcharts.com, treasury.gov – 2/28/121,25,26,27
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

While the Dow hit a new intraday high and closed at a record high on March 5, the underappreciated factoid is that the S&P 500 advanced in both January and February. As CNBC.com columnist Bob Pisani noted recently, that has happened 26 times since 1945. In each of those 26 years, the S&P finished up for the year. In 24 of those 26 years, its gain was 10% or better. In fact, the average annual ascent across those 26 years (including yield) was 24%. Historical data is simply a rear-view mirror and no guide to the future – but bulls are as optimistic as ever about this market. Could another deficit battle on Capitol Hill set stocks back? Will developments in Europe exert a drag? At this moment, little seems to shake the faith of Wall Street, which sees a clearly improving economy and a market climate with weaker headwinds.28

UPCOMING ECONOMIC RELEASES: For the balance of March, the economic calendar plays out as follows … January factory orders and a new Fed Beige Book (3/6), the Labor Department’s February job report and January wholesale inventories (3/8), February retail sales and January business inventories (3/13), the February PPI (3/14), February’s CPI and industrial production and the University of Michigan’s preliminary March consumer sentiment survey (3/15), the March NAHB housing market index (3/18), February housing starts and building permits (3/19), a Fed policy announcement (3/20), February existing home sales, January’s FHFA housing price index and the Conference Board’s February Leading Economic Indicators index (3/21), February new home sales and durable goods orders, the Conference Board’s March consumer confidence poll and the January Case-Shiller home price index (3/26), February pending home sales (3/27), the final estimate of Q4 GDP (3/28), and February consumer spending and the final March University of Michigan consumer sentiment survey (3/29).


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Disclosure

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. This is not a solicitation or recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. 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. The Hang Seng Index is a freefloat-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The CNX Nifty, also called the Nifty 50 or simply the Nifty, is a stock market index and benchmark index for Indian equity market. The price-weighted MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The EURO STOXX 50 Index, Europe’s leading Blue-chip index for the eurozone, provides a blue-chip representation of supersector leaders in the eurozone. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The S&P/ASX 200 is recognized as the primary investable benchmark in Australia. The KOSPI Index is a capitalization-weighted index of all common shares on the Korean Stock Exchanges. The TOPIX Index is the most broadly based Japanese stock index, covering all companies within the First Section of the TSE (around 1,600 stocks). The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The S&P Asia 50 is an equity index drawn from four major Asian markets – Hong Kong, Singapore, South Korea, and Taiwan. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. 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 – www.bloomberg.com/markets/stocks/ [2/28/13]
2 – www.reuters.com/article/2013/03/01/us-usa-fiscal-idUSBRE91P0W220130301 [3/1/13]
3 – www.medscape.com/viewarticle/779980 [2/27/13]
4 – www.cnbc.com/id/100511717 [3/1/13]
5 – briefing.com/investor/calendars/economic/2013/02/25-01 [3/1/13]
6 – www.foxbusiness.com/economy/2013/02/21/consumer-prices-flat-in-january/ [2/22/13]
7 – www.reuters.com/article/2013/02/13/usa-economy-retail-idUSL1N0BCCZM20130213 [2/13/13]
8 – articles.marketwatch.com/2013-02-20/economy/37188507_1_wholesale-prices-vegetable-prices-higher-food-prices [2/22/13]
9 – www.ism.ws/ISMReport/NonMfgROB.cfm [3/5/13]
10 – briefing.com/investor/calendars/economic/2013/03/04-08 [3/4/13]
11 – www.usatoday.com/story/money/business/2013/02/20/january-fed-minutes/1933047/
12 – dealbook.nytimes.com/2013/03/04/chinas-push-to-cool-down-housing-raises-questions/ [3/4/13]
13 – www.bloomberg.com/news/2013-03-03/china-monetary-tightening-pressure-eases-as-growth-rebound-slows.html [3/3/13]
14 – www.nytimes.com/2013/03/05/business/global/jolt-from-italys-elections-may-not-be-enough.html [3/5/13]
15 – mscibarra.com/products/indices/international_equity_indices/gimi/stdindex/performance.html [2/28/13]
16 – bullionpricestoday.com/bullion-prices-plunge-in-february-us-gold-silver-coins-steady/ [3/1/13]
17 – www.bloomberg.com/news/2013-02-28/gold-falls-on-signs-of-economic-recovery-commodities-at-close.html [2/28/13]
18 – online.wsj.com/mdc/public/npage/2_3050.html?mod=mdc_curr_dtabnk&symb=DXY [3/1/13]
19 – www.marketwatch.com/story/home-sales-inch-up-in-january-as-inventory-shrinks-2013-02-21 [2/21/13]
20 – blogs.wsj.com/developments/2013/02/20/housing-starts-fall-but-economists-stay-positive/ [2/22/13]
21 – www.mercurynews.com/real-estate/ci_22670982/new-home-sales-hit-highest-level-more-than [2/26/13]
22 – www.census.gov/construction/nrs/pdf/newressales.pdf [2/26/13]
23 – www.freddiemac.com/pmms/ [3/4/13]
24 – money.cnn.com/quote/quote.html?symb=RUT [2/28/13]
25 – online.wsj.com/mdc/public/page/2_3024-m_globalstockindexes.html [2/28/13]
26 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F31%2F12&x=0&y=0 [2/28/13]
26 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F31%2F12&x=0&y=0 [2/28/13]
26 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F29%2F12&x=0&y=0 [2/28/13]
26 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F28%2F03&x=0&y=0 [2/28/13]
26 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F28%2F03&x=0&y=0 [2/28/13]
26 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F28%2F03&x=0&y=0 [2/28/13]
27 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/4/13]
28 – www.cnbc.com/id/100508355 [2/28/13]

CFGIowa Weekly Economic Update – March 4, 2013

DESPITE ANXIETIES, DOW STAYS ABOVE 14,000

The DJIA settled at 14,089.66 Friday, gaining 0.64% on the week. The S&P 500 (+0.17% to 1,518.20) and NASDAQ (+0.25% to 3,169.74) also logged five-day advances. All this happened in the face of significant instability, as Wall Street fretted over the deadlock in Italy’s national elections and the sequester cuts taking effect on March 1. Congress and the White House could not arrange a deal to delay the sequestration last week, which means that $85 billion will be subtracted from the budgets of government agencies between March 2 and October 1 unless a bipartisan agreement emerges to undo the cuts.1,2

TERRIFIC REAL ESTATE DATA HELPS BUOY STOCKS

New home buying accelerated 16% in January – the biggest monthly rise in almost 20 years, according to the Commerce Department. Pending home sales rose 4.5% in January, the National Association of Realtors said; that was far above the 1.0% gain forecast by economists polled by Briefing.com. Finally, the December edition of the S&P/Case-Shiller Home Price Index showed a 6.8% yearly gain across 20 metro markets, bettering November’s 5.5% impressive annualized increase.3,4

MANUFACTURING PMI RISES IN FEBRUARY

The Institute for Supply Management’s manufacturing PMI improved 1.1% in February to 54.2. While the Commerce Department noted a 5.2% overall retreat in durable goods orders in January (the first decline in four months), new orders rose 1.9% when the volatile transportation category was factored out.4,5

CONSUMER CONFIDENCE & SPENDING HOLD UP

The Conference Board’s February consumer confidence poll soared to 69.0 from January’s 58.4 mark, and the University of Michigan’s final February consumer sentiment survey came in at 77.6, topping the Reuters consensus forecast of 76.3. The federal government revised Q4 GDP north slightly to +0.1% last week; consumer spending rose 0.2% in January, even as consumer incomes fell 3.6%.1,4

THIS WEEK: Monday, Transocean announces Q4 earnings. Tuesday brings ISM’s latest non-manufacturing PMI and quarterly results from VeriFone. On Wednesday, Staples, American Eagle Outfitters, BigLots! and PetSmart issue quarterly earnings; February’s ADP employment report appears plus a new Federal Reserve Beige Book and data on January factory orders. The Bank of England and European Central Bank wrap up policy meetings Thursday, and a new Challenger job-cut report and earnings from H&R Block, Pandora, Kroger and Smithfield Foods appear. Friday, the February jobs report is out along with earnings from Ann and Foot Locker.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+7.52

+8.55

+2.97

+7.86

NASDAQ

+4.98

+6.05

+7.91

+13.70

S&P 500

+6.45

+10.49

+2.82

+8.05

REAL YIELD

3/1 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

-0.67%

-0.23%

1.10%

1.77%

 

Sources: cnbc.com, bigcharts.com, treasury.gov – 3/1/131,6,7,8

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 send us their address (click the link). We will contact them first and request their permission to add them to our list.


Disclosure
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 – www.cnbc.com/id/100511717 [3/1/13]
2 – www.reuters.com/article/2013/03/01/us-usa-fiscal-idUSBRE91P0W220130301 [3/1/13]
3 – www.mercurynews.com/real-estate/ci_22670982/new-home-sales-hit-highest-level-more-than [2/26/13]
4 – briefing.com/investor/calendars/economic/2013/02/25-01 [3/1/13]
5 – www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf [2/27/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F1%2F12&x=0&y=0 [3/1/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F1%2F12&x=0&y=0 [3/1/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F1%2F12&x=0&y=0 [3/1/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F29%2F08&x=0&y=0 [3/1/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F29%2F08&x=0&y=0 [3/1/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F29%2F08&x=0&y=0 [3/1/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F28%2F03&x=0&y=0 [3/1/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F28%2F03&x=0&y=0 [3/1/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F28%2F03&x=0&y=0 [3/1/13]
7 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/1/13]
8 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/1/13]