Weekly Economic Update for September 12, 2011

Presented by Mark Lund, Investor Coach.

WEEKLY QUOTE
“Three o’clock is always too late or too early for anything you want to do.”
– Jean-Paul Sartre

WILL CONGRESS PASS THE $447 BILLION JOBS PLAN?
Thursday, after a 3 week vacation President Obama challenged Congress to swiftly approve the American Jobs Act – a plan that would cut the payroll tax for workers and businesses to 3.1% in 2012 and offer tax credits as large as $4,000 to companies hiring people out of work for more than 6 months. If passed, the AJA would also pour about $80 billion into public works projects and extend long-term jobless benefits. A written response from House Speaker John Boehner (R-OH) and three other key Republican leaders noted that the plan will be quickly considered, but cited a need to “find common ground” and an assumption that the bill was not “an all-or-nothing proposition.”^1,2

ISM SERVICES INDEX TOPS FORECASTS
Economists polled by Bloomberg News thought that the Institute for Supply Management’s non-manufacturing index would fall to 51.o in August. Instead, it bettered the 52.7 reading from July. The 53.3 August reading indicates some expansion in the industries that account for roughly 90% of the economy.³

BEIGE BOOK REPORTS TEPID OVERALL GROWTH
The latest Federal Reserve review of 12 U.S. economic regions noted expansion “at a modest pace, though some districts noted mixed or weakening activity.” Five regions reported some growth in July and August. Analysts wonder if this latest Beige Book is one more factor that could prompt the Fed to ease monetary policy.⁴

RECORD LOW YIELD FOR THE 10-YEAR NOTE
The benchmark Treasury yield decreased to 1.89% last Thursday, the lowest yield ever recorded by the Federal Reserve. The yield closed at 1.92% Friday.^5,6

STOCKS ALTERNATELY SOAR, SWOON
Rumors of an imminent default in Greece thwarted any weekly gain for U.S. stocks. The S&P 500 finished the week at 1,154.23, while the NASDAQ and DJIA respectively ended the week at 2,467.99 and 10,992.13. As of Friday, the Dow had traded in a triple-digit range in 19 of the past 24 market days.⁷

THIS WEEK: No notable U.S. economic releases are scheduled for Monday. Tuesday, Best Buy releases an earnings report. Wednesday, the August PPI comes out along with Census Bureau reports on August retail sales and July business inventories. Thursday, the August CPI arrives, plus a look at August industrial output, new figures on initial jobless claims and results from Research in Motion; Fed chairman Ben Bernanke speaks briefly in the nation’s capital. Friday brings the initial September consumer sentiment index from the University of Michigan.

Sources: cnbc.com, usatoday.com, bigcharts.com, treasury.gov, treasurydirect.gov – 9/9/11^{7,8,9,10,11,12} Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Citations.
1 – money.msn.com/business-news/article.aspx?feed=AP&date=20110909&id=14243169 [9/9/11]
2 – latimes.com/news/politics/la-pn-house-jobs-plan-20110909,0,2297315.story [9/9/11]
3 – bloomberg.com/news/2011-09-06/u-s-ism-services-index-increased-in-august.html [9/6/11]
4 – chicagotribune.com/business/breaking/chi-fed-beige-book-shows-modest-growth-in-july-20110907,0,5899012.story [9/7/11]
5 – bloomberg.com/news/2011-09-09/treasuries-decline-after-obama-speech.html [9/9/11]
6 – blogs.wsj.com/marketbeat/2011/09/09/ten-year-treasury-yields-close-at-fresh-60-year-low/ [9/9/11]
7 – cnbc.com/id/44451511 [9/9/11]
8 – usatoday.com/money/index [9/9/11]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F9%2F10&x=0&y=0 [9/9/11]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%9F2%2F10&x=10&y=18 [9/9/11]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F9%2F10&x=0&y=0 [9/9/11]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F8%2F06&x=0&y=0 [9/9/11]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F8%2F06&x=0&y=0 [9/9/11]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F8%2F06&x=0&y=0 [9/9/11]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F10%2F01&x=0&y=0 [9/9/11]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F10%2F01&x=0&y=0 [9/9/11]
9 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F10%2F01&x=0&y=0 [9/9/11]
10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/9/11]
10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/9/11]
11 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]
12 – montoyaregistry.com/Financial-Market.aspx?financial-market=an-introduction-to-the-stock-market&category=29 [9/9/11]

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. This material was prepared by MarketingLibrary.Net Inc., for Stonecreek Wealth Advisors, Inc. a fee only registered investment advisor firm in Salt Lake City, Utah, providing wealth management services. Mark Lund is the author of The Effective Investor.