Weekly Free Market Update for September 27, 2010

Presented by Mark Lund, The Investor Coach.

WEEKLY QUOTE
“Successful people ask better questions, and as a result, they get better answers.”
– Anthony Robbins

EXISTING HOME SALES IMPROVE
The National Association of Realtors reported that existing home sales rose 7.6% in August, a rebound from July’s record low. Separately, the Commerce Department said new home sales were flat in August (and 28.9% below year-ago levels). The inventory of unsold new homes decreased 1.4% last month to 206,000 – the smallest number since August 1968.¹

MARKET SEES UPSIDE IN DURABLE GOODS DATA
Overall durable goods orders declined 1.3% in August, but that was better than the 1.4% drop forecast by economists polled by Briefing.com. Minus transportation orders, durable goods orders were up 2.0% last month, far better than the 0.5% rise analysts expected. That news helped fuel a 198-point DJIA rally on Friday.²

ECONOMISTS SAY RECESSION DONE; BUFFETT SAYS NO
The National Bureau of Economic Research now says the “Great Recession” ended in June 2009. But Warren Buffett disagrees. Last week, the “oracle of Omaha” told CNBC: “I think we’re in a recession until real per capita GDP gets back up to where it was before … we’re not gonna be out of it for a while, but we will get out of it.”^3,4

LEADING INDICATORS ADVANCE 0.3% IN AUGUST
Last month, the Conference Board’s Leading Economic Indicators Index had its best increase since May. This is the second monthly advance in a row for the LEI.⁵

GOLD TOPS $1,300 FRIDAY
The Federal Reserve hinted at more quantitative easing last week, which helped gold futures. Gold rose above $1,300 in intraday trading Friday on the COMEX and settled at $1,298.10 per ounce. Silver ended the week at another 30-year peak: $21.40 per ounce after a 2.8% weekly advance.⁶

DOW PUSHES TOWARD 11,000
The DJIA advanced for a fourth straight week, closing Friday at 10,860.26. On the week, it advanced a healthy 2.38%. The S&P 500? Up +2.05% last week to 1,148.64 at Friday’s close. The NASDAQ? Up +2.83% last week to finish at 2,381.22 Friday.⁷

COMING NEXT WEEK: Tuesday, a new Case-Shiller home prices report & the Conference Board’s Consumer Confidence Index; Thursday, the third 2Q GDP estimate & initial claims; Friday, August consumer spending, the University of Michigan’s final September consumer sentiment survey, the September ISM manufacturing index & new auto sales and construction spending figures.

Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov – 9/24/10^7,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

WEEKLY RIDDLE
I have no heart or mind, but I do have two legs. Yet they only touch the ground when I am not carrying things around. What am I?

Last week’s riddle:
It is passed from hand to hand and pocket to pocket, yet whoever takes it doesn’t know it. Whoever knows it doesn’t want it. And whoever makes it makes sure never to mention it. What is it?

Last week’s answer:
Counterfeit money.

Citations.
1 – marketwatch.com/story/new-home-sales-flat-in-august-2010-09-24 [9/24/10]
2 – thestreet.com/story/10870879/1/stock-market-story-sept-24.html [9/24/10]
3 – fool.com/investing/general/2010/09/20/so-long-recession.aspx [9/20/10]
4 – fool.com/investing/general/2010/09/24/warren-buffett-this-recession-aint-over.aspx [9/24/10]
5 – theatlantic.com/business/archive/2010/09/leading-indicators-improve-in-august/63452/ [9/23/10]
6 – bloomberg.com/news/2010-09-24/silver-climbs-to-30-year-high-beating-gold-with-its-26-advance-this-year.html [9/24/10]
7 – cnbc.com/id/39348037 [9/24/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F24%2F09&x=0&y=0 [9/24/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F24%2F09&x=0&y=0 [9/24/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F24%2F09&x=0&y=0 [9/24/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F23%2F05&x=0&y=0 [9/24/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F23%2F05&x=0&y=0 [9/24/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F23%2F05&x=0&y=0 [9/24/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F25%2F00&x=0&y=0 [9/24/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F25%2F00&x=0&y=0 [9/24/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F25%2F00&x=0&y=0 [9/24/10]
9 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [9/24/10]
9 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [9/24/10]
10 – treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]

This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative’s Broker/Dealer. This information should not be construed as investment advice. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. 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 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.