CFGIowa Weekly Economic Update February 28, 2014

MORE MILD INFLATION

Consumer prices ticked up 0.1% for January while wholesale prices rose 0.2%. Analysts polled by MarketWatch expected both the headline Consumer Price Index and Producer Price Index to advance 0.1%. The bigger news item (perhaps) is that the Labor Department altered its calculation of producer prices for the first time in 36 years. The definitive PPI is now called the PPI Final Demand index, and it measures prices received for exports, services, federal government purchases and construction in addition to those of finished goods.1,2

POOR HOME SALES TO START THE YEAR

The annual pace of existing home sales hit an 18-month low in January; the National Association of Realtors announced 5.1% monthly and yearly declines in residential resales. The good news? Inventory continues to expand (+2.2% in January) and the median existing home price was $188,900 last month, up 10.7% from a year ago.3

OIL TOPS $102, GOLD ADVANCES FOR A THIRD WEEK

NYMEX crude for April delivery settled at $102.20 a barrel Friday, rising 1.9% for the week. Unrest in Ukraine, Venezuela, Turkey and other emerging markets also influenced the 0.4% gain for COMEX gold futures last week – the precious metal settled Friday at $1,323.60 per ounce.4

NASDAQ ADDS TO YTD GAINS

The tech-heavy benchmark rose 0.46% during this past abbreviated trading week, wrapping up Friday at 4,263.41; in contrast, the Dow and S&P 500 each slipped a bit over four days. After a 0.32% weekly loss, the Dow stood at 16,103.30. The S&P settled Friday at 1,836.25, losing 0.13% on the week.5

THIS WEEK: Berkshire Hathaway, Hertz and Live Nation announce earnings Monday. Tuesday, the Conference Board publishes its February consumer confidence index, the December Case-Shiller and FHFA home price indices appear, and Big 5, Office Depot, CoreLogic, Metro PCS, Papa John’s, Toll Brothers, Macy’s, Home Depot, Alleghany, Molycorp, Dreamworks and Cracker Barrel all present earnings. Wednesday offers January new home sales numbers and earnings from Baidu, TJX, Starwood Hotels, JC Penney and U.S. Cellular. Thursday, Fed chair Janet Yellen reports to Congress and new initial claims figures and data on January hard goods orders arrive; quarterly results come from Salesforce, Wendy’s, Hilton, Monster, Sempra Energy, Main Street Capital and Republic Airways. Friday brings the month’s final University of Michigan consumer sentiment index, NAR’s report on January pending home sales, and the second federal estimate of Q4 GDP.

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.

Securities offered through LPL Financial (LPL), Member FINRA/SIPC. Investment advice offered through Advantage Investment Management, a registered investment advisor. Cornerstone Financial Group and Advantage Investment Management are separate entities from LPL Financial.

The fast price swings in commodities, precious metals and currencies will result in significant volatility in an investor’s holdings.

Precious metal investing is subject to substantial fluctuation and potential for loss.

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by the urban consumers for a market basket of consumers for a market basket of consumer goods and services.

This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. 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. 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 neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

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 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 – marketwatch.com/economy-politics/calendars/economic [2/21/14]
2 – bloomberg.com/news/2014-02-18/producer-price-index-in-u-s-gets-first-overhaul-since-1978.html [2/18/14]
3 – 247wallst.com/housing/2014/02/21/january-sales-of-existing-homes-at-18-month-low/ [2/21/14]
4 – proactiveinvestors.com/companies/news/52249/gold-rises-05-oil-above-102-52249.html [2/21/14]
5 – fxstreet.com/news/forex-news/article.aspx?storyid=f0ae7598-7cbc-41c0-a5ff-1f741e2d583b [2/21/14]

Income inequality and your investment account

A new article came out recently stating that the top 1% of the world population controls $110 trillion of wealth. http://www.oxfam.org/sites/www.oxfam.org/files/bp-working-for-few-political-capture-economic-inequality-200114-summ-en.pdf . I understand that many folks consider this a travesty, but before they get too excited about righting this inequality of wealth, they need to actually “run the numbers” and try to avoid being a hypocrite.

Upon doing a little math, I found many of my clients are in that top 1%. That’s right! Before you get too impressed, consider this: the richest 1% globally control $110 trillion of wealth. There are 7 billion people on earth, so $110 trillion divided by 7 billion equals about $1.5 million each. A farmer client who owns 240 acres of Iowa land (a small farm for those who might not know) or a small business person who owns her business debt free, along with a home and a $500,000 401k, could also fall in that 1%. Heck, a person who can save $275/month and increases that with the inflation rate can get to $1.5 million by retirement age.¹

So to be more fair to the less rich, let’s just take from the “super rich”. That would probably do it, right? Well, according to Forbes list of richest people in the world, the top 50 have roughly $1.2 trillion of wealth.² If you confiscated ALL their wealth, it wouldn’t come close to paying down the total public (government) debt in the world of $52.6 trillion (http://www.economist.com/content/global_debt_clock). It wouldn’t even pay the interest on the debt! And, the $1.2 trillion spread out evenly over every man, woman and child on earth, would give everyone $171.43. Would that pay your cell phone bill for 5 months? Or if you confiscated ALL the wealth of the top 1 percenters and spread it out evenly, everyone would get $15,714.28. For those in third world countries who face REAL poverty, that’s certainly a lot. But in the U.S., although it’s considered poverty, it’s not enough to help most people for any length of time.

How does this affect your investments? When the government attempts to help those in poverty, it spends money on social programs. Since it doesn’t currently bring in enough money through taxes, it borrows the difference from investors with help from the Federal Reserve (our banking system in the U.S.)

Our Federal Reserve creates money out of thin air (“prints” money to increase the money supply) and has been using that money to buy U.S. government-backed debt. That extra money enters our economy.³ Some of it ends up in the hands of citizens. Some spend it, but some save it. For those who save it, some ends up being invested in stocks, some in their businesses, and some in real estate, among other places. This typically pushes asset values higher, which makes those people appear richer….on paper.

They may not be poor but many of them saved that money themselves and they don’t consider themselves rich. When the stock market last crashed, in 2008-2009, many of those people lost nearly 50% of that wealth. Not all of those folks were born with a silver spoon in their mouth. Their plans for a successful retirement hinge on a decent 401k and Social Security. And Social Security is funded by a trust fund expected to be exhausted in around 20 years, with the source of this information being the 2013 Annual Reports summary on the Social Security website itself (http://www.socialsecurity.gov/oact/TRSUM/tr13summary.pdf) and run by a government that is $17 trillion in debt (http://www.treasurydirect.gov/NP/debt/current). The unfunded (future) liabilities of the United States government are projected to be over $127 trillion…more than $1.1 million for every taxpayer alive today.4

So as easy as it is to despise rich people, not all are evil and taking from them won’t come close to solving the problem anyway. And as much as we’d like to think government is the answer, not all government is good and as the debt increases, it probably means much larger problems and much less wealth for everyone when the bubbles pop again like some did in 2008-2009.

Towards that end, we run what-if stress testing scenarios for our clients simulating multiple economic events that could impact their life’s savings, helping them understand the very REAL consequences of actions by governments, terrorists, and the like. Being informed about, and in charge of, your portfolio is the best way to understand and deal with the certainty of uncertainty that affects our life.

Finally, if you really think that rich people have more influence over government than poor people, you may be right. But by that logic, we should all vote for smaller government. There would be fewer people in the government to influence and a chance to reduce the federal debt, which may help save Social Security in the future for us and our kids. If we achieve wealth equality, we’ll need it!

¹annual interest rate 7.5% for 45 years, increasing contributions by an inflation rate of 2.5% and compounding annually. For illustrative purposes only. Not based on any specific investments. Investing in securities involves risk, including potential loss of principal.

² http://www.forbes.com/billionaires/list/

³http://www.independent.com/news/2012/feb/25/how-us-federal-reserve-creates-and-destroys-money/

4http://www.usdebtclock.org/

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Investing involves risk including loss of principal.

CFGIowa Weekly Economic Update – February 3, 2014

CONSUMER MORALE, CONSUMER SPENDING IMPROVE

On Friday, the Commerce Department announced that consumer spending rose 0.4% in December, even as consumer incomes stayed flat. The University of Michigan’s final January consumer sentiment index came in at 81.2 (up 0.8 points from December) and the Conference Board’s January consumer confidence index posted a reading of 80.7 (up 3.2 points from last month). Analysts surveyed by Briefing.com thought both indices would be flat for January.1

HOME SALES DIP, BUT PRICES RISE

Brutal weather sent pending home sales down 8.7% in December to a 43-month low, as reported by the National Association of Realtors. The Census Bureau measured a 7.0% drop in new home buying last month. In better news, November’s Case-Shiller Home Price Index showed a 13.7% yearly advance (the best 12-month gain in housing values since February 2006), and new home prices rose 8.4% in 2013.2,3

FEWER ORDERS FOR BIG-TICKET ITEMS

Durable goods orders fell 4.3% in December, but the Census Bureau said the retreat was only 1.6% when transportation orders were factored out. This was a switch from the (revised) 3.4% gain in hard goods orders in November.1

FED TAPERS FURTHER, STOCKS SLIP

As expected, the Federal Reserve announced last week that it would reduce its monthly bond purchases by another $10 billion starting in February. Wall Street struggled for most of the week, with the 5-day performances as follows: DJIA, -1.13% to 15,698.85; NASDAQ, -0.59% to 4,103.88; S&P 500, -0.43% to 1,782.59.4,5

THIS WEEK: On Monday, Janet Yellen will be sworn in as Fed chair, ISM puts out its January manufacturing PMI, the Commerce Department issues December auto sales figures, and Anadarko, Hartford Financial, Yum! Brands and Sysco release quarterly results. SiriusXM, Archer Daniels Midland, Michael Kors and Aflac post earnings Tuesday, and data on December factory orders also arrives. Wednesday brings January’s ISM service sector index, January’s ADP employment report and earnings from Merck, Time Warner, Green Mountain Coffee, Aramark, Allstate, CBRE, Yelp!, Ralph Lauren, Marathon Oil, Walt Disney, Twitter, Tesoro and Pandora. Thursday, earnings from AOL, Expedia, Zynga, GM, Kellogg, Aetna, Towers Watson, Fidelity, Activision Blizzard, Vulcan Materials, Monster, Phillip Morris, Invacare, Amtech, 21st Century Fox, Lions Gate, Universal and LinkedIn all arrive, plus new initial claims figures and a new Challenger job-cut report. Friday, the Labor Department releases the January employment report.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-5.30

+13.26

+19.24

+4.97

NASDAQ

-1.74

+30.61

+35.59

+9.86

S&P 500

-3.56

+18.99

+23.17

+5.76

REAL YIELD

1/31 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.53%

-0.57%

1.73%

1.85%

«RepresentativeDisclosure»

The S&P / Case-Shiller U.S. National Home Price Index measures the change in the value of U.S. residential housing market. The S&P / Chase-Shiller U.S. National Home Price Index tracks the growth in value of real estate by following the purchase price and resale value of homes that have undergone a minimum of two arm’s-length transactions. The index is named for its creators, Karl Case and Robert Shiller.

The University of Michigan Consumer Sentiment Index (MCSI) is a survey of consumer confidence conducted by the University of Michigan. The MCSI uses telephone surveys to gather information on consumer expectations regarding the overall economy.

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 – briefing.com/investor/calendars/economic/2014/01/27-31 [1/31/14]
2 – bloomberg.com/news/2014-01-30/pending-sales-of-u-s-existing-homes-slump-most-since-may-2010.html [1/30/14]
3 – foxbusiness.com/economy-policy/2014/01/27/new-home-sales-slide-7-in-december/ [1/27/14]
4 – marketwatch.com/story/fed-stays-the-course-by-tapering-another-10-billion-2014-01-29 [1/29/14]
5 – google.com/finance?q=INDEXDJX%3A.DJI%2CINDEXSP%3A.INX%2CINDEXNASDAQ%3A.IXIC&ei=ABvsUviuDeetiQKN3QE&gl=us [1/31/14]
6 – usatoday.com/money/markets/overview/ [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F31%2F12&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F31%2F12&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F31%2F13&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F30%2F09&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F30%2F09&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F30%2F09&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F30%2F04&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F30%2F04&x=0&y=0 [1/31/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F30%2F04&x=0&y=0 [1/31/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/31/14]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/31/14]

CFGIowa Weekly Economic Update January 27, 2014

MORE HOMES MOVE IN DECEMBER

Last month saw a 1.0% gain in existing home sales, a nice change for this key economic indicator after a few subpar months. Analysts surveyed by Dow Jones Newswires anticipated sales improving 0.6%. The National Association of Realtors did revise November’s sales decline to 5.9% (it had been 4.3%).1,2

GAUGE OF NEAR-TERM PROSPECTS EDGES HIGHER

The Conference Board’s index of leading indicators – intended to assess economic prospects for the next 3-6 months – ticked up 0.1% for December. Additionally, the CB revised the November gain of the index from 0.8% to 1.0%.1

GOLD RALLY CONTINUES

Futures advanced for a fifth straight week, settling Friday at $1,264.30 an ounce on the COMEX after rising 1.0% in 5 days, helped by a wave of disappointing economic news from overseas. The precious metal hasn’t had such a long winning streak since September 2012.3

STOCKS STAGE A MAJOR RETREAT

Weak manufacturing data from China and an exit from emerging market currencies triggered a 2-day global selloff at the end of last week. The Argentine peso dropped 15% in 5 days, and the Russian ruble, South African rand and Brazil real also slumped. As a result, the DJIA had its poorest week in more than 2 years (-3.52%). The Nasdaq lost 1.65% for the week while the S&P 500 fell 2.63%. At the close Friday, here was where the big three stood: S&P, 1,790.29; DJIA, 15,879.11; NASDAQ, 4,128.17.4,5

THIS WEEK:  Monday brings Q4 results from Apple and Caterpillar and the Census Bureau’s report on December new home sales. On Tuesday, investors will consider the Conference Board’s January consumer confidence index, the November Case-Shiller home price index, December durable goods orders and earnings from Amgen, Ford Motor Co., Yahoo, Comcast, AT&T, Siemens and Pfizer. The earnings parade continues Wednesday with quarterly results from Dow Chemical, Novartis, Qualcomm, Boeing and Biogen – and the Federal Reserve makes a policy announcement. Thursday, NAR reports December pending home sales, the first federal estimate of Q4 growth appears, and earnings arrive from Amazon, Google, Banco Santander, Ericsson, LVMH, Royal Dutch Shell, H&M, Exxon Mobil, Visa, UPS and 3M. Friday, the Commerce Department issues its December personal spending report, the University of Michigan’s final January consumer sentiment index appears, and earnings arrive from Chevron, MasterCard and BBVA.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-4.21

+14.86

+19.32

+5.03

NASDAQ

-1.16

+31.87

+35.89

+9.44

S&P 500

-3.14

+19.77

+23.04

+5.68

REAL YIELD

1/24 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.61%

-0.62%

1.93%

1.82%

Sources: USATODAY.com, bigcharts.com, treasury.gov – 1/24/146,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.


«RepresentativeDisclosure»

Precious metal investing is subject to substantial fluctuation and potential for loss.

The fast price swings in commodities, precious metals and currencies will result in significant volatility in an investor’s holdings.

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 – nasdaq.com/article/european-markets-pulled-back-on-weak-chinese-data–earnings-20140123-00763 [1/23/14]
2 – tinyurl.com/mav8xv6 [1/22/14]
3 – proactiveinvestors.com.au/companies/news/52211/gold-climbs-again-friday-longest-rally-since-september-2012-52211.html [1/24/14]
4 – thestreet.com/story/marketstory.html [1/24/14]
5 – businessweek.com/news/2014-01-24/argentina-to-ease-fx-controls-after-peso-fell-most-in-12-years [1/24/14]
6 – usatoday.com/money/markets/overview/ [1/24/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F24%2F12&x=0&y=0 [1/24/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F24%2F12&x=0&y=0 [1/24/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F24%2F13&x=0&y=0 [1/24/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F23%2F09&x=0&y=0 [1/24/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F23%2F09&x=0&y=0 [1/24/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F23%2F09&x=0&y=0 [1/24/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F23%2F04&x=0&y=0 [1/24/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F23%2F04&x=0&y=0 [1/24/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F23%2F04&x=0&y=0 [1/24/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/24/14]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/24/14]

CFGIowa Weekly Economic Update January 20, 2014

INFLATION RISES IN DECEMBER

Labor Department reports showed the Consumer Price Index up 0.3% last month (with core CPI rising 0.1%) and the Producer Price Index advancing 0.4% (core PPI went north 0.3%). If these spikes foreshadow greater inflation for 2014, they do little to alter the big picture of 2013 – a year in which consumer prices increased only 1.5% and wholesale prices rose just 1.2%. Annualized consumer inflation is beneath the Federal Reserve’s 2.0% target and hasn’t exceeded 2% for two years. The last two consecutive years in which consumer prices rose less than 2% were 1997-98.1,2

A MILD LIFT FOR RETAILERS

Economists polled by Briefing.com thought retail sales would be flat in December. They rose 0.2% instead (0.7% with auto buying factored out). The Census Bureau revised November’s 0.7% advance down to 0.4%.3

CONSUMER SENTIMENT MISSES EXPECTATIONS

The initial January consumer sentiment index from the University of Michigan took a major dip, dropping to 80.4 from the final December figure of 82.5. The consensus forecast of analysts surveyed by Briefing.com was for a much higher reading – 83.0.3

LESS GROUNDBREAKING AT YEAR’S END

This is hardly surprising given winter weather: the Census Bureau reported a 9.8% drop in housing starts for December, plus a 3.0% decline in building permits. For 2013, housing starts increased 18.3% and permits 17.5%.4

NASDAQ OUT OF THE RED YTD

Thanks to a 0.55% 5-day advance, the tech-heavy Nasdaq became the first of the big three to go positive so far for 2014. The Dow gained 0.13% last week; the S&P 500 retreated 0.20%. Friday, the indices settled as follows: DJIA, 16,458.56; NASDAQ, 4,197.58; S&P, 1,838.70.5

THIS WEEK: Monday is Martin Luther King, Jr. Day and U.S. stock and bond markets are closed; overseas, China’s government releases Q4 and 2013 GDP numbers. Tuesday brings earnings from Delta Airlines, Texas Instruments, Verizon, Halliburton, IBM, Johnson & Johnson, TD Ameritrade and The Travelers. More earnings reports arrive Wednesday from eBay, Logitech, Netflix and SanDisk, and the annual World Economic Forum begins in Switzerland. Thursday offers data on December existing home sales and initial jobless claims, Q4 results from Altera and Alaska Airlines and the Conference Board’s December leading indicators index. Friday, nothing major is scheduled.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-0.71

+21.05

+19.75

+5.53

NASDAQ

+0.50

+33.85

+34.89

+9.61

S&P 500

-0.52

+24.16

+23.26

+6.13

REAL YIELD

1/17 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.58%

-0.64%

1.81%

1.83%

«RepresentativeDisclosure»

The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by the urban consumers for a market basket of consumers for a market basket of consumer goods and services.

The Producer Price Index (PPI) program measures the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPR are from the first commercial transaction for many products and services.

The University of Michigan Consumer Sentiment Index (MCSI) is a survey of consumer confidence conducted by the University of Michigan. The MCSI uses telephone surveys to gather information on consumer expectations regarding the overall economy.

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 – forbes.com/sites/kitconews/2014/01/16/subdued-inflation-offers-little-help-to-gold/ [1/16/14]
2 – investing.com/news/economic-indicators/u.s.-ppi-rises-0.4-in-december,-core-ppi-up-0.3-260436 [1/15/14]
3 – briefing.com/investor/calendars/economic/2014/01/13-17 [1/17/14]
4 – esa.doc.gov/economic-indicators/economic-indicators-6 [1/17/14]
5 – thestreet.com/story/12244254/1/markets-hustle-stocks-mixed-amid-lackluster-earnings.html [1/17/14]
6 – usatoday.com/money/markets/overview/ [1/17/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F17%2F12&x=0&y=0 [1/17/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F17%2F12&x=0&y=0 [1/17/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F17%2F13&x=0&y=0 [1/17/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F16%2F09&x=0&y=0 [1/17/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F16%2F09&x=0&y=0 [1/17/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F16%2F09&x=0&y=0 [1/17/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F16%2F04&x=0&y=0 [1/17/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F16%2F04&x=0&y=0 [1/17/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F16%2F04&x=0&y=0 [1/17/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/17/14]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/17/14]

CFGIowa Weekly Economic Update January 13, 2014

INTERPRETING A PERPLEXING JOBS REPORT

Why did the economy generate only 74,000 new jobs last month? Why did 347,000 people drop out of the job hunt to leave the labor participation rate at 62.8%, the lowest in 35 years? Was it the weather? Maybe. As a note from Capital Economics mentions, the Labor Department found that 273,000 people were unable to work last month because of weather conditions, well above the December average of 166,000. The jobless rate fell to a 5-year low of 6.7% in the final month of 2013, but that was largely due to older workers retiring and the thinning ranks of job seekers. November’s job growth was revised upward by 38,000 to 241,000.1,2

A BIT LESS GROWTH IN THE SERVICE SECTOR

December’s non-manufacturing Purchasing Manager’s Index (PMI) from the Institute for Supply Management came in at 53.0, down from the prior 53.9 mark. Although 53.0 is the weakest reading in six months, it signifies expansion. Data from Markit showed service-sector PMIs in China (50.9) and the euro area (51.0) also down slightly last month.

FACTORY ORDERS REBOUND IN DECEMBER

The latest report from the Commerce Department noted a 1.8% monthly rise in orders placed with U.S. manufacturers. November’s retreat in factory orders was revised down to 0.5%.3

A MIXED WEEK ON WALL STREET

The first full trading week of 2014 brought 5-day gains for the S&P 500 (0.60%) and Nasdaq (1.03%) but a 0.20% pullback for the Dow. Friday, the big three closed as follows: DJIA, 16,437.05; NASDAQ, 4,174.67; S&P, 1,842.37.4

THIS WEEK: Nothing major is scheduled for Monday. Tuesday offers Q4 results from Wells Fargo and JPMorgan Chase and December retail sales numbers. Wednesday, Bank of America, Kinder Morgan, Fastenal, CSX and Plexus announce earnings, and a new Federal Reserve Beige Book and the December PPI arrive. Thursday brings the December CPI, the January NAHB Housing Market Index, the latest initial jobless claims, remarks by Ben Bernanke at a special Brookings Institution conference on central banking, and earnings from UnitedHealth, BB&T, American Express, Intel, Goldman Sachs, Capital One, BlackRock, Citigroup, Charles Schwab, First Republic Bank and PNC Financial. Friday offers data on December industrial output, housing starts, and building permits and the month’s initial consumer sentiment index from the University of Michigan; General Electric, Comerica, Bank of NY Mellon, Morgan Stanley, Schlumberger and SunTrust all post earnings.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-0.84

+22.02

+18.23

+5.72

NASDAQ

-0.05

+33.73

+33.13

+10.00

S&P 500

-0.32

+25.15

+21.39

+6.42

REAL YIELD

1/10 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.59%

-0.62%

1.87%

1.89%

«RepresentativeDisclosure»

The Institute for Supply Management (ISM) index is based on surveys of more than 300 manufacturing firms by the Institute of Supply Management. The ISM Manufacturing Index monitors employment, production inventories, new orders, and supplier deliveries. A composite diffusion index is created that monitors conditions in national manufacturing based on the data from these surveys.

Purchasing Managers Index (PMI) is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

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 – tinyurl.com/l9ywkdk [1/10/14]
2 – forbes.com/sites/samanthasharf/2014/01/10/jobs-report-u-s-economy-added-just-74k-jobs-in-december-unemployment-down-to-6-7/ [1/10/14]
3 – bloomberg.com/news/2014-01-06/ism-non-manufacturing-index-in-u-s-fell-to-53-in-december.html [1/6/14]
4 – thestreet.com/story/marketstory.html [1/10/14]
5 – usatoday.com/money/markets/overview/ [1/10/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F27%2F12&x=0&y=0 [1/10/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F27%2F12&x=0&y=0 [1/10/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F10%2F13&x=0&y=0 [1/10/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F9%2F09&x=0&y=0 [1/10/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F9%2F09&x=0&y=0 [1/10/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F9%2F09&x=0&y=0 [1/10/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F9%2F04&x=0&y=0 [1/10/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F9%2F04&x=0&y=0 [1/10/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F9%2F04&x=0&y=0 [1/10/14]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/10/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/10/14]

CFGIowa Weekly Economic Update January 6, 2014

A MAJOR GAIN FOR A CONSUMER CONFIDENCE INDEX

The Conference Board’s monthly gauge of consumer confidence came in at 78.1 for December, beating the 76.0 median forecast from economists polled by Bloomberg. In November, it stood at 72.0. The index is way up from where it once was: its average reading was just 53.7 during the 2007-09 recession.1

HOME PRICES, HOME SALES CONTRACTS INCREASE

While existing home sales have fallen in recent months, the National Association of Realtors offered some positive news last week – pending home sales increased 0.2% in November, a contrast to October’s 1.2% retreat. The October S&P/Case-Shiller Home Price Index showed a 13.6% yearly gain in property prices measured across 20 cities, improved 0.3% from the September edition; that is the best annual gain the Case-Shiller index has recorded since February 2006.1,2

FACTORIES HUM IN DECEMBER

December’s manufacturing PMI (Purchasing Managers Index) from the Institute for Supply Management offered a reading of 57.0 – down from 57.3% in November, but still a mark of solid expansion in the factory sector. Analysts polled by MarketWatch expected the index to decline to 56.6.2

BULLS TAKE A BREATHER AS 2014 BEGINS

Speaking in Philadelphia Friday, Federal Reserve chairman Ben Bernanke asserted that the economy has made “considerable progress”, and that there are “grounds for cautious optimism abroad.” His remarks didn’t give stocks much of a lift to end the week. From December 30-January 3, the S&P 500 lost 0.54%, the Dow 0.05% and the Nasdaq 0.59%. The closing prices Friday: Dow, 16,469.99; Nasdaq, 4,131.91; S&P, 1,831.37.3

THIS WEEK:

On Monday, ISM’s December service sector index and the Census Bureau’s report on December factory orders arrive, and the Senate is expected to approve Janet Yellen’s appointment as Fed chair. Tuesday offers earnings from The Container Store, Apollo Group and Micron. The minutes from the December 17-18 Fed policy meeting will be released on Wednesday, along with the December ADP job-change report and earnings from Family Dollar, Ruby Tuesday, Monsanto and Constellation Brands. Thursday brings December’s Challenger job-cut report, the latest round of initial jobless claims, and earnings news from Supervalu, Alcoa, Texas Industries and PriceSmart. The Labor Department publishes its December employment report on Friday.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-0.64

+22.99

+16.46

+5.82

NASDAQ

-1.07

+33.26

+30.63

+10.59

S&P 500

-0.92

+25.49

+19.31

+6.52

REAL YIELD

1/3 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.75%

-0.54%

2.29%

2.06%


«RepresentativeDisclosure»

The S&P / Case-Shiller U.S. National Home Price Index measures the change in the value of U.S. residential housing market. The S&P / Chase-Shiller U.S. National Home Price Index tracks the growth in value of real estate by following the purchase price and resale value of homes that have undergone a minimum of two arm’s-length transactions. The index is named for its creators, Karl Case and Robert Shiller.

The Institute for Supply Management (ISM) index is based on surveys of more than 300 manufacturing firms by the Institute of Supply Management. The ISM Manufacturing Index monitors employment, production inventories, new orders, and supplier deliveries. A composite diffusion index is created that monitors conditions in national manufacturing based on the data from these surveys.

Purchasing Managers Index (PMI) is an indicator of the economic health of the manufacturing sector. The PMI index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

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 – sfgate.com/business/bloomberg/article/Consumer-Confidence-Index-in-U-S-Increased-to-5111693.php [1/3/14]
2 – marketwatch.com/economy-politics/calendars/economic [1/3/14]
3 – thestreet.com/story/12201583/1/market-hustle-stocks-rebound-ahead-of-bernanke-speech.html [1/3/14]
4 – money.cnn.com/data/markets/dow [1/3/14]
5 – money.cnn.com/data/markets/nasdaq/ [1/3/14]
6 – money.cnn.com/data/markets/sandp/ [1/3/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F27%2F12&x=0&y=0 [1/3/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F27%2F12&x=0&y=0 [1/3/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F3%2F13&x=0&y=0 [1/3/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F2%2F09&x=0&y=0 [1/3/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F2%2F09&x=0&y=0 [1/3/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F2%2F09&x=0&y=0 [1/3/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F2%2F04&x=0&y=0 [1/3/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F2%2F04&x=0&y=0 [1/3/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F2%2F04&x=0&y=0 [1/3/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/3/14]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/3/14]

Irrationality Abounds – A Special Post From Mike Moffitt

economica uncertanty in iowa

I noticed an economist I follow had a conference for those number-crunching geeks interested in the big picture on the U.S. and world economies.  He called it the Irrational Economic Summit.  At first, I thought that was a harsh title but upon further review, maybe not.

economica uncertanty in iowaSo much of what’s going on in our world is right in front of our eyes but we often miss what’s important because there’s so much information overload out there.  Here are a couple of examples:

I received an email from a national non-profit organization in Washington, DC that promotes the establishment of bike trails.  They want me to donate and tell my congressman to vote to maintain government funding of trails.  Totally within their right to make this request.  But out of curiosity I checked the annual report and tax filings on their web site, and here’s what I found:

  1. They spend about $800,000 a year in lobbying Congress to get $1.1 million in funding.  They took in another $5.3 million in memberships and contributions. Their top 4 staffers bring home over $600,000 and their headquarters is in Washington – one of the most expensive real estate markets in the U.S. Most of the rest went to expenses but they have over $3 million squirreled away in cash and investments.   They only gave out $1.8 million in grants for trails – supposedly their reason for existence.
  2. There are probably thousands of non-profits like this in America that want money from the U.S. government.

Now let’s look at our federal government’s situation (courtesy of www.usdebtclock.org).  Our CURRENT U.S. debt is about $17 trillion dollars.  Our infinite horizon future debt, according to the Federal Reserve –based on the projected costs of Medicare and Social Security alone– is $125 trillion dollars.  That figures out nearly $400,000 PER CITIZEN and over $1 million PER TAXPAYER (only about 1/3 of the citizens are taxpayers…another issue for another day).  The average assets PER CITIZEN are over $320,000, but of course that’s the average.  Many citizens have far less than that.  So the government’s future unfunded liabilities are more per citizen than each citizen is worth.  You would think this fiasco will end badly someday.

Your financial health is up to YOU! Don’t expect Uncle Sam to be the answer.  The antidote to this spending sickness should be personal saving, investing and living within your means.  Personal responsibility and having a viable plan in case the economy turns sour again just makes sense.  And that’s something we can help with.

Our federal government’s spending should scare us, but most citizens aren’t paying attention or they would not stand for this.  It’s, well, irrational.

If you’d like some help working through some of these issues, or if you have questions, please don’t hesitate to reach out to us. We look forward to hearing from you!

HAPPY NEW YEAR!

Mike Moffit

CFGIowa Weekly Economic Update December 2, 2013

CONFIDENCE INDEX FALLS, SENTIMENT INDEX RISES

Two respected barometers of consumer mood went different ways in November. The Conference Board’s consumer confidence index came in at a disappointing 70.4, down from a revised 72.4 mark for October and well below the 74.0 reading forecast by Briefing.com. November’s final consumer sentiment index from the University of Michigan rose to 75.1, topping the Briefing.com projection by 1.6 points.1

HOUSING INDICATORS LARGELY IMPRESS

September’s edition of the S&P/Case-Shiller Home Price Index found house prices rising 3.2% for the third quarter, 13.3% YTD and 11.2% across the past 12 months. Building permits rose 6.2% in October, with the Census Bureau measuring a 13.9% annual gain. Pending home sales declined for another month: they fell 0.6% for October, the National Association of Realtors noted.1,2

DURABLE GOODS ORDERS DECLINE

Overall hard goods orders slipped 2.0% in October, partly reversing the 4.1% increase in September. The silver lining? The Census Bureau found that October’s retreat was just 0.1% with transportation orders removed.1

NOVEMBER ENDS WITH FURTHER STOCK GAINS

The NASDAQ was the frontrunner among the big three U.S. indices last week, rising 1.71% to 4,059.89. Both the S&P 500 (+0.06% to 1,805.81) and Dow (+0.13% to 16,086.41) realized tiny gains during the abbreviated trading week. Turning to the NYMEX, oil and gold both had poor Novembers: on the month, gold slid 5.46% to $1,250.60 an ounce and light crude dropped 3.60% to $92.72 a barrel.3,4,5,6

THIS WEEK: Monday, ISM releases its November manufacturing PMI and the Census Bureau provides September and October construction spending data. Tuesday, the Commerce Department releases figures on November auto sales. On Wednesday, ISM puts out its November service sector PMI, the Federal Reserve offers a new Beige Book, the Census Bureau issues long-awaited September and October new home sales figures, and ADP produces its November job change report. The federal government releases its second estimate of Q3 GDP Thursday; also on tap for that day are the November Challenger job cuts report, data on October factory orders, and the latest initial jobless claims numbers. Friday, the Labor Department issues the November employment report, the Commerce Department publishes data on October consumer spending, and December’s preliminary University of Michigan consumer sentiment index arrives.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+22.76

+23.53

+16.44

+6.44

NASDAQ

+34.46

+34.79

+32.88

+10.71

S&P 500

+26.62

+27.53

+20.30

+7.06

REAL YIELD

11/29 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.60%

-0.78%

2.60%

2.03%

Sources: CNNMoney.com, bigcharts.com, treasury.gov – 11/29/133,4,5,7,8,9

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.


«RepresentativeDisclosure»

The consumer confidence index is a survey by the Conference Board that measures how optimistic or pessimistic consumers are with respect to the economy in the near future.

The University of Michigan Consumer Sentiment Index (MCSI) is a survey of consumer confidence conducted by the University of Michigan. The MCSI uses telephone surveys to gather information on consumer expectations regarding the overall economy.

The S&P / Case-Shiller U.S. National Home Price Index measures the change in the value of U.S. residential housing market. The S&P / Chase-Shiller  U.S. National Home Price Index tracks the growth in value of real estate by following the purchase price and resale value of homes that have undergone a minimum of two arm’s-length transactions. The index is named for its creators, Karl Case and Robert Shiller.

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 – briefing.com/investor/calendars/economic/2013/11/25-29 [11/27/13]
2 – dailyfinance.com/2013/11/26/case-shillers-housing-index-and-octobers-housing-s/ [11/26/13]
3 – money.cnn.com/data/markets/dow/ [11/29/13]
4 – money.cnn.com/data/markets/nasdaq/ [11/29/13]
5 – money.cnn.com/data/markets/sandp/ [11/29/13]
6 – money.cnn.com/data/commodities/ [11/29/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F29%2F12&x=0&y=0 [11/28/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F29%2F12&x=0&y=0 [11/28/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F29%2F12&x=0&y=0 [11/28/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F28%2F08&x=0&y=0 [11/28/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F28%2F08&x=0&y=0 [11/28/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F28%2F08&x=0&y=0 [11/28/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F28%2F03&x=0&y=0 [11/28/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F28%2F03&x=0&y=0 [11/28/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F28%2F03&x=0&y=0 [11/28/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/29/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/28/13]

CFGIowa Weekly Economic Update November 25, 2013

CONSUMER & PRODUCER PRICES DECLINE

Last week, Labor Department reports showed the Consumer Price Index down 0.1% for October while the Producer Price Index slipped 0.2% with help from a 3.8% dip in gasoline costs. The real news was the remarkably tame yearly inflation. In the last 12 months, the CPI has only increased 1.0% and the PPI just 0.3% (although the core PPI did rise 1.4%). What do these annualized gains represent? The weakest wholesale inflation since 2009.1,2

FEWER HOMES SELL IN OCTOBER

Existing home sales fell 3.2% last month, according to the National Association of Realtors. This marks the second straight monthly decline. Higher mortgage rates, narrowing inventory and the federal government’s 16-day shutdown certainly influenced sales volume. The median sales price of an existing home was $199,500 last month, 12.8% higher than a year ago.1,3

RETAIL SALES IMPROVE

October saw a solid 0.4% rise in the indicator, and that surprised analysts who thought the federal shutdown would hurt the headline number. Auto sales powered October’s gain, but Census Bureau data showed a 0.2% advance even with car and truck buying removed.1

S&P CLOSES ABOVE 1,800

While the October Federal Reserve policy meeting minutes revealed the possibility of tapering QE3 (Quantitative Easing) in “the coming months,” stocks still pulled higher on the week. The Dow (+0.65% to 16,064.77), NASDAQ (+0.14% to 3,991.65) and S&P 500 (+0.37% to 1,804.76) all shrugged off midweek dips.1,4

THIS WEEK: NAR releases its October pending home sales report Monday, complementing earnings from Fifth Street Finance and Wet Seal. On Tuesday, the Census Bureau issues September and October reports on housing starts and building permits, the Conference Board’s November consumer confidence index comes out, and the September Case-Shiller Home Price Index arrives; additionally, TiVo and Chico’s announce Q3 results. Wednesday brings the University of Michigan’s final November consumer sentiment index, the Conference Board’s October leading indicators index and the October durable goods orders report from the Census Bureau. All U.S. financial markets will be closed Thursday in observance of Thanksgiving. Friday is Black Friday, of course; the NYSE and NASDAQ will close at 1:00pm EST with the bond market likely closing an hour later.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+22.59

+25.15

+19.93

+6.68

NASDAQ

+32.20

+36.39

+37.67

+11.08

S&P 500

+26.54

+29.74

+25.12

+7.43

REAL YIELD

11/15 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.56%

-0.71%

3.15%

1.93%

Sources: usatoday.com, bigcharts.com, treasury.gov – 11/22/135,6,7,8

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.


«RepresentativeDisclosure»

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 Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by the urban consumers for a market basket of consumers for a market basket of consumer goods and services.

The Producer Price Index (PPI) program measures the average change over time in the selling prices received by domestic producers for their output. The prices included in the PPR are from the first commercial transaction for many products and services.

Quantitative Easing is a government monetary policy occasionally used to increase the money supply by buying government securities or other securities from the market. Quantitative easing increases the money supply by flooding financial institutions with capital in an effort to promote increased lending and liquidity.

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 – news.morningstar.com/articlenet/article.aspx?id=620267 [11/20/13]
2 – marketwatch.com/story/us-wholesale-costs-fall-again-in-october-2013-11-21 [11/21/13]
3 – business.time.com/2013/11/20/u-s-existing-home-sales-fall-3-2-percent-in-october/ [11/20/13]
4 – thestreet.com/story/12120723/1/market-hustle-curb-that-enthusiasm-dow-hesitates-at-16000.html [11/22/13]
5 – usatoday.com/money/markets/overview/ [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F12&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F12&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F12&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F08&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F08&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F08&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F03&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F03&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F03&x=0&y=0 [11/22/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/22/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/22/13]