Presented by Mark Lund.
Quote of the week. “Employ thy time well, if thou meanest to get leisure.” – Ben Franklin
Jobless numbers rein in bulls. June’s jobless figures gave Wall Street pause last week. The U.S. economy lost 467,000 non-farm jobs last month, 136,000 in manufacturing. (The health care sector added 21,000 jobs.) Job losses had decreased every month from February to May after hitting a peak of 741,000 in January. Analysts had expected June job losses of about 350,000. The silver lining here? Our economy lost an average of 436,000 jobs per month in 2Q 2009, compared to 691,000 jobs per month in 1Q 2009. Yet with unemployment now at 9.5%, some voices are calling for another federal stimulus.1,2
Good news in manufacturing. Factory orders were up 1.2% in May – the biggest monthly increase in more than a year, noted the Commerce Department. Separately, the Institute for Supply Manufacturing said its gauge of manufacturing activity read 44.8 for June, still showing contraction but also representing the best reading since last August.3
Pending home sales increase again. True, the National Association of Realtors’ pending home sales index only increased 0.1% for May – but it was the fourth straight monthly increase. You have to go back to July-October 2004 to find the last time that happened.4 Standard & Poor’s Case-Schiller Index of home prices was down 0.6% for April; it had declined 2.2% for March. Could price declines be moderating?5
Is the consumer more or less confident? A week after the Reuters/University of Michigan final consumer sentiment index notched a big gain, the Conference Board’s June survey recorded a big drop in consumer confidence, slipping from a 54.8 in May to a 49.3 last month. The CB’s present situation index and expectations index both posted declines.6
Tough going for stocks. Deeper-than-expected job losses put Wall Street in a bearish mood last week.
| % Change | Y-T-D | 1-Year | 5-Yr Avg |
| DJIA | -5.65 | -26.17 | -3.89 |
| NASDAQ | +13.92 | -20.22 | -2.09 |
| S&P 500 | -0.76 | -28.94 | -4.07 |
(Source: CNBC.com, 7/3/09)7
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
Riddle of the week. Take it out, scratch its head. Minutes later it is black, moments after it was red. What is this object?
Contact my office or see next week’s Update for the answer.
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. 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. The 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.
