972-396-0449

WEEKLY QUOTE

“We may encounter many defeats but we must not be defeated.”
- Maya Angelou

 WEEKLY TIP

Beware of being too risk-averse when it comes to planning retirement income. Some retirees have portfolios so conservative that their incomes struggle to keep pace with inflation.

A GAIN (OF SORTS) IN CONSUMER SPENDING

The Commerce Department noted a 0.2% rise in personal spending in January along with a 0.3% rise in wages. However, real consumer spending was flat for the third consecutive month when adjusted for inflation. Headline personal spending rose 2.1% in Q4 2011. Many economists expect a comparable gain this quarter. In related news, the Bureau of Economic Analysis revised Q4 GDP north to 3.0% last week.

DURABLE GOODS ORDERS, ISM INDEX DECLINE
While the Institute for Supply Management’s manufacturing index spent its 31st consecutive month above 50, it did dip 1.7% in February to 52.4 – well below the 54.7 consensus forecast among economists polled by Briefing.com. Last week, the Commerce Department said that hard goods orders decreased 4.0% in January (the expiration of the 2011 tax break on capital investment was likely a factor).

HOME PRICES SLIP, BUT SALES CONTRACTS INCREASE
The good news: pending home sales increased 2.0% in January according to the National Association of Realtors. Economists polled by Briefing.com had forecast only half that gain. The not-so-good news: December’s S&P/Case-Shiller Home Price Index revealed a 3.8% monthly decline and a 4.0% annual retreat in existing home prices.

S&P & NASDAQ ADVANCE; DOW HAS A FLAT WEEK

Friday, the DJIA settled at 12,977.57, the NASDAQ at 2,976.19 and the S&P 500 at 1,369.13. The Dow lost 0.04% from Monday to Friday while the S&P and NASDAQ respectively gained 0.28% and 0.42%. Retail gasoline prices were averaging $3.74 a gallon nationally on Friday; oil futures lost 2.80% last week to settle at $106.70 per barrel. Gold retreated 3.75% on the COMEX for the week to settle at $1,709.80 an ounce Friday.

THIS WEEK: The data stream is pretty light this week, at least in terms of domestic economic news. Monday, ISM releases its February service sector index and we get Census Bureau data on January factory orders. Tuesday offers Q4 earnings from Dick’s Sporting Goods and Pandora Media. Wednesday, we have earnings reports from H&R Block, Hovnanian and American Eagle Outfitters. In addition to new weekly jobless claims figures, Thursday will bring Q4 results from Smithfield Foods, Williams-Sonoma, Quicksilver and Stein Mart. Friday, the February unemployment report comes out along with data on wholesale inventories and earnings from Ann Inc. (formerly Ann Taylor) and Del Monte.

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 3/2/12

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

WEEKLY QUOTE

“Love is the master key that opens the gates of happiness.”
- Oliver Wendell Holmes

WEEKLY TIP

If you want to improve your credit score, an inactive credit card will not help (and it may even hurt). The key factors in credit score determination are recent activity and recent payment history.

OIL APProaches $110 PER BARREL

As NYMEX crude futures settled at $109.77 Friday, economists wondered how the U.S. consumer might cope if $5 gas became a reality. Spurred by supply concerns and heightened tensions over Iran’s nuclear program, crude had its best week in three months: futures gained $6.17 (5.96%) across five trading days. Retail gas prices finished last week at $3.65 per gallon, a high unseen since last June.

MORE HOMES MOVING ON THE MARKET
Existing home sales were up again in January – the National Association of Realtors reported a 4.3% monthly increase. Seasonally adjusted, sales have risen 8% since August. New home sales (a smaller portion of the residential real estate market) declined 0.9% in January, but largely as an effect of the Commerce Department revising December sales figures upward. Without those revisions, the indicator would have been strongly in the plus column. Last month, the new home inventory decreased to the lowest level since January 2006.

CONSUMER CONFIDENCE UP SLIGHTLY
The final Thomson Reuters/University of Michigan consumer sentiment survey for February came in at 75.3 last week – a 12-month peak, and just a bit north of the 75.0 reading at the end of January. Economists polled by Briefing.com had projected a final February mark of 73.0.

STOCKS & GOLD POST FURTHER GAINS

The Dow ended the week at 12,982.95, the NASDAQ at 2,963.78 and the S&P 500 at 1,365.74. That was the S&P’s highest close since June 5, 2008. It also represented a 102% rise from its March 2009 bottom. On the week, the S&P gained 0.33%, the DJIA 0.26% and the NASDAQ 0.41%. Gold wrapped up the week at $1,776.40 on the COMEX after advancing 2.93% in five days.

THIS WEEK: A new NAR pending home sales index comes out Monday, along with earnings from Lowe’s, HSBC and Priceline. Tuesday, we have the February Conference Board consumer confidence poll, the December S&P/Case-Shiller home price index and data on January durable goods orders plus earnings reports from Office Depot and DreamWorks. Wednesday offers the second estimate of Q4 GDP, a new Federal Reserve Beige Book and quarterly results from Staples and Costco. Thursday is just as big as Tuesday, with the January consumer spending figures coming out along with ISM’s newest manufacturing index, the latest initial claims report, Commerce Department data on February auto sales and earnings from Wendy’s, Kroger and Big Lots. Friday, nothing major is scheduled.

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 2/24/12^2,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

WEEKLY QUOTE

“In times of rapid change, experience could be your worst enemy.”
- J. Paul Getty

CONSUMER PRICES UP 0.2% for January

Major factors in this increase in the Consumer Price Index include a 0.9% rise in the price of clothing as well as rising rents and healthcare costs. Core CPI also rose 0.2% in January. The annualized inflation rate hit 2.3% last month, yet the Federal Reserve expects but a 1.6% gain in the CPI across 2012. Wholesale inflation ticked up 0.1% for January, with the core Producer Price Index up 0.4%.

RETAIL SALES FALL SHORT OF (HIGH) EXPECTATIONS
The Census Bureau reported a healthy 0.4% rise in U.S. retail purchases for January. However, economists polled by Dow Jones Newswires thought they would rise 0.9% for the month. Subtract a 1.1% decline in auto sales from the data, and retail sales were up 0.7% for January.

LEADING INDICATORS Hit 3½-YEAR PEAK
The Conference Board’s Leading Indicator Index rose 0.4% in January, with seven of ten indicators improving. (The most notable positive detected: a widening in the spread between short-term and long-term interest rates.) The index advanced for a fourth consecutive month.

NASDAQ 3,000? DOW 13,000?

Both indices approached those psychological landmarks on Friday. The Dow went +1.16% for the week, the NASDAQ +1.65% and the S&P 500 +1.38%. At week’s end, the Dow was at 12,949.87, the NASDAQ at 2,951.78 and the S&P at 1,361.23. Oil futures soared 4.63% last week on the NYMEX to settle at $103.24 a barrel Friday. Gold had a flat week, settling at $1,724.50 Friday on the COMEX following a 0.07% five-day advance.

THIS WEEK: U.S. financial markets are closed Monday for the Presidents Day holiday; big news could come out of Europe Monday, as Eurozone finance ministers could greenlight a new bailout package for Greece. Tuesday, earnings reports roll in from Barnes & Noble, Macy’s, Dell, Saks, Wal-Mart, Kraft Foods, Home Depot and Radio Shack. Wednesday, the NAR puts out data on January existing home sales and quarterly results come in from Toll Bros., MGM, TJX, Dollar Tree, Fluor, Conseco, Hertz and Hewlett-Packard. Thursday brings earnings from Target, Kohl’s, Hormel, OfficeMax, Safeway, Sears, Public Storage, Gap and AIG. Friday, the final University Of Michigan consumer sentiment survey for February appears, the Census Bureau publishes January new home sales figures and J.C. Penney, Scripps and Berkshire Hathaway issue Q4 results.

WEEKLY QUOTE

“A successful person is one who can lay a firm foundation with the bricks that others throw at him or her.”

- David Brinkley

WEEKLY RIDDLE
A train moving as fast as it can go strikes a man’s hand, yet he is uninjured and the train goes off its tracks. Under what circumstances could this happen?

Last week’s riddle:
The wind is blowing east through the mountains. A lone pine tree stands on a cliff. Which way do its leaves blow?
Last week’s answer:
A pine tree has needles, not leaves. So no leaves are blowing in the first place.

WILL THE MORTGAGE ACCORD BRING MUCH RELIEF?
While the $25+ billion settlement reached last week between five large mortgage servicers and 49 states was momentous, it may not help many borrowers in trouble. Only about 1 million of the estimated 11 million underwater homeowners will see relief as loans sold to Fannie Mae and Freddie Mac aren’t included in the deal. Much of the settlement money will go toward mortgage modification. Roughly 750,000 homeowners are slated to receive financial compensation from the accord (an average of about $2,000 per household). The lenders involved are JPMorgan Chase, Bank of America, Ally Financial, Citigroup and Wells Fargo; other banks could join them. (The state of Oklahoma forged its own agreement with the five lenders.)

CONSUMER CONFIDENCE TAKES A DIP
The University of Michigan’s initial February consumer sentiment survey fell to 72.5 from its one-year peak of 75.0 at the end of January. Economists polled by Bloomberg News had expected a 74.8 reading. However, the percentage of consumers who felt the jobless rate would fall in future months was at the highest level the survey had seen in 28 years.

STOCKS RETREAT FOR THE WEEK ON FRIDAY LOSSES
When the Dow’s worst day of 2012 brings only an 89-point loss, it seems the year is off to a good start. That loss occurred Friday after another stall in the Greek debt negotiations. On the week, the major U.S. indices pulled back a bit: DJIA, -0.47% to 12,801.23; S&P 500, -0.17% to 1,342.64; NASDAQ, -0.06% to 2,903.88.

THIS WEEK: Monday, President Obama submits his 2013 fiscal budget proposal to Congress. Tuesday, the Census Bureau publishes January retail sales figures and MetLife issues Q4 earnings. Wednesday, the Fed issues the 1/25 FOMC minutes, the federal government comes out with figures on January industrial output and Q4 results arrive from Comcast, Deere, CBS, Abercrombie & Fitch and Nvidia. On Thursday, General Motors, Nordstrom and Baidu come out with earnings and new initial jobless claims are announced; January’s PPI is also released plus data on January housing starts, and Fed chairman Ben Bernanke speaks at an FDIC hearing. Friday, January’s CPI comes out along with the Conference Board’s newest leading economic indicator index; Q4 results come in from Heinz and Campbell’s Soup.

Sources: online.wsj.com, bigcharts.com, treasury.gov, treasurydirect.gov – 2/10/126,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

WEEKLY QUOTE

“If you would be loved, love and be lovable.”
- Benjamin Franklin

JOBLESS RATE DOWN TO 8.3%

Are we seeing a trend here? The unemployment rate has now fallen 0.8% in the last six months. We haven’t seen a descent this sharp and swift since 1984. January hiring blew away forecasts: the Labor Department said the economy added 243,000 jobs last month, while economists polled by Briefing.com expected non-farm payrolls to grow by 155,000 positions. The labor force hasn’t grown so much in a month since last April, and the numbers are making analysts wonder if the Federal Reserve will tinker with interest rates months ahead of expectations.

HOUSEHOLDS SAVE FIRST, SPEND SECOND

Consumer spending was flat in December after gains of just 0.1% in November and October. More significantly, consumer incomes rose 0.5% for December and so did the personal savings rate. People essentially put the extra money in the bank. In related news, the federal government estimated 2011 GDP at 1.7%, about half of the economic growth seen in 2010.

BOTH ISM INDEXES RISE
The Institute for Supply Management’s closely watched purchasing manager indexes signaled expanding service and manufacturing sectors in January. ISM’s service sector PMI improved 3.8% to 56.8. Its manufacturing PMI advanced 1.0% to 54.1.

CASE-SHILLER INDEX DECLINES AGAIN
This was the third straight monthly dip for the 20-city roundup of residential home prices. The latest available edition (November) showed a 1.3% monthly retreat in prices with a 3.7% year-over-year drop.

NASDAQ TOPS 2,900

The tech-heavy index closed at an 11-year high Friday: 2,905.66. The Dow settled at 12, 862.23 at week’s end, its best close since May 2008. The S&P 500 finished Friday at 1,344.90. The weekly gains: DJIA, 1.59%; S&P, 2.17%; NASDAQ, 3.16%.

THIS WEEK: Earnings take center stage in a stretch without much economic data. Monday brings Q4 results from Yum Brands, Humana and Hasbro. Tuesday, earnings arrive from Disney, UBS, Toyota, BP, Coca-Cola and Hartford Financial. Wednesday, Groupon, VISA, CVS, Sprint Nextel, Time Warner and Cisco join in. Thursday, the Bank of England and ECB wrap up policy meetings; new initial claims figures complement earnings reports from Expedia, PepsiCo, Dunkin’ Brands, Sirius XM Radio, Rio Tinto and Credit Suisse. Friday, the University of Michigan’s initial February consumer sentiment survey comes out plus Q4 results from Barclays.

Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 2/3/12^1,7,8,9  Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

WEEKLY QUOTE

“Judge each day not by the harvest you reap but by the seeds you plant.”

- Robert Louis Stevenson

January 30, 2012

ECONOMY GROWS 2.8% IN Q4
While this is the best GDP reading since Q2 2010, the initial estimate from the Bureau of Economic Analysis still disappointed the markets. Many economists and investors were looking for growth of 3.0% or better. The majority of the growth actually came from increased inventories. Consumer spending rose 2.0% last quarter, with auto sales being the biggest factor. Durable goods orders did see 3.0% growth in December, putting them 45% above the recession low hit in April 2009.1,2,3

DIPS IN NEW & PENDING HOME SALES
The number of signed home sale contracts fell 3.5% in December, according to the National Association of Realtors. Separately, a Census Bureau report showed that new home sales declined 2.2% in December.4,5

MARQUEE SENTIMENT INDEX AT 11-MONTH PEAK
The Thomson Reuters/University of Michigan consumer sentiment index ended January at 75.0. This was way up from December’s 69.9 mark, and it beat the 74.1 reading forecast by economists surveyed by Reuters.6,7

A STRONG MONTH COMES TO A CLOSE
With just a couple of trading days left, January is shaping up to be the best month for U.S. equities since October (see the YTD numbers below). Across last week, the S&P 500 rose 0.07% to 1,316.33 and the NASDAQ gained 1.07% to 2,816.55; the Dow slipped 0.47% to fall to 12,660.46.1

THIS WEEK: The December consumer spending report comes out Monday. On Tuesday, earnings reports arrive from Amazon.com, Broadcom, ExxonMobil, UPS, Pfizer and Eli Lilly – and we also get the latest S&P/Case-Shiller home price index and the Conference Board’s January consumer confidence poll. Wednesday, Q4 results roll in from Qualcomm, Electronic Arts, Aetna and Marathon Oil and the latest ISM manufacturing index appears. Besides new initial claims figures, Thursday brings Q4 results from Unilever, Sony, Deutsche Bank, Merck and Beazer Homes. Friday, the January unemployment report is out along with ISM’s service sector index and data on December factory orders; Clorox also issues Q4 results.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 1/27/12^1,8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 1/27/121,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

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«RepresentativeDisclosure»

This material was prepared by 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.cnbc.com/id/46162429 [1/27/12]
2 – money.msn.com/market-news/post.aspx?post=6e802a2f-f50a-4ae4-948b-7bc9555ff5f6&_nwpt=1 [1/27/12]
3 – www.npr.org/2012/01/26/145895744/durable-goods-orders-signal-business-investment [1/26/12]
4 – www.reuters.com/article/2012/01/25/us-usa-economy-idUSTRE7BM0AB20120125 [1/25/12]
5 – www.startribune.com/business/138174364.html [1/26/12]
6 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [1/27/12]
7 – www.cnbc.com/id/46162624/ [1/27/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F27%2F11&x=0&y=0 [1/27/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F27%2F11&x=0&y=0 [1/27/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F27%2F11&x=0&y=0 [1/27/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F26%2F07&x=0&y=0 [1/27/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F26%2F07&x=0&y=0 [1/27/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F26%2F07&x=0&y=0 [1/27/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F28%2F02&x=0&y=0 [1/27/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F28%2F02&x=0&y=0 [1/27/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F28%2F02&x=0&y=0 [1/27/12]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/27/12]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/27/12]
10 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]