WEEKLY QUOTE
“Experience is a dear teacher, but fools will learn at no other.”
– Ben Franklin
JOBLESS RATE DECREASES TO 9.0%
Economists surveyed by Bloomberg News had expected unemployment to stay at 9.1% in October, so this was a nice development. Still, this latest jobs report had something in common with its predecessors: underwhelming job growth. Non-farm payrolls expanded by 80,000 positions last month, but that fell short of the 95,000 new jobs envisioned in the consensus Bloomberg forecast. On the bright side, the percentage of underemployed Americans fell from 16.5% to 16.2% and the long-term unemployed (those out of work for at least 27 weeks) shrank to 42.4% of the jobless population, the lowest percentage since November 2010.1
BOTH ISM INDICES MOVE LOWER
The Institute for Supply Management’s purchasing manager indexes were both above 50 in October, but not quite where they were at a month before. The ISM manufacturing index slipped from 51.6 to 50.8; its service sector index ticked down to 52.9 from the preceding 53.0. The service sector employment gauge improved by 4.6% and moved from 48.7 in September (contraction) to 53.3 (expansion).2
GREEK THEATRE PREOCCUPIES WALL STREET
The whims of Greek Prime Minister George Papandreou affected stocks more than anything last week: first he announced a public vote on the latest austerity cuts for the nation, reconsidered it, and then prepared to step down Friday amid concerns that he might change his mind. As these weekly performance numbers show, bears were roaming last week: DJIA, -2.03% to 11,983.24; S&P 500, -2.48% to 1,253.23; NASDAQ, -1.86% to 2,686.15.4,5,6
THIS WEEK: No major economic releases are slated for Monday; we do have results from Priceline and SYSCO. Eurozone finance ministers conclude their meeting in Brussels on Tuesday, and Toyota presents earnings. Wednesday, Ben Bernanke speaks at a Federal Reserve conference on small business; earnings come in from GM, Anheuser Busch, HSBC, Cisco, Green Mountain, Ralph Lauren, Macy’s and Wendy’s. Thursday we have earnings from Viacom, Kohl’s, Disney and Nordstrom; Ben Bernanke speaks at an El Paso town hall. Friday is Veterans Day: banks are closed, markets are open, and the initial October University of Michigan consumer sentiment survey arrives plus earnings from D.R. Horton.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +3.50 +4.80 -0.000047 +2.69
NASDAQ +1.25 +4.22 +3.05 +4.98
S&P 500 -0.35 +2.63 -1.63 +1.36
REAL YIELD 11/4 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.08% 0.44% 2.40% 3.50%
Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 11/4/116,7,8,9 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
WEEKLY TIP
Starting a small business? A written plan is handy for forecasting, risk management and raising capital. A written plan is far preferable to one you keep in your head.
WEEKLY RIDDLE
What can run but never walks, has a mouth but never eats, has a head but never thinks, and has a bed but never sleeps?
Last week’s riddle:
A man brings a silver antique wrapped up in a towel to an appraiser, claiming it is a trophy engraved “To General Stonewall Jackson, presented after the first Battle of Bull Run, 1861.” The appraiser knows it is a fake without even looking at it. Why?
Last week’s answer:
People in 1861 wouldn’t have known it was the first Battle of Bull Run (the second occurred in 1862). Also, Stonewall Jackson fought for the Confederacy, which referred to the battle First Manassas.
Citations.
1 – www.bloomberg.com/news/2011-11-04/u-s-payrolls-increased-by-80-000-in-october-as-jobless-rate-falls-to-9-.html [11/4/11]
2 – www.ism.ws/ISMReport/NonMfgROB.cfm [11/3/11]
3 – blogs.wsj.com/marketbeat/2011/11/04/data-points-energy-metals-529/ [11/4/11]
4 – montoyaregistry.com/Financial-Market.aspx?financial-market=financial-planning-and-wealth-management&category=4 [11/4/11]
5 – www.cnbc.com/id/45166675 [11/4/11]
6 – www.cnbc.com/id/45163231 [11/4/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F4%2F10&x=0&y=0 [11/4/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F4F2%2F10&x=10&y=18 [11/4/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F4%2F10&x=0&y=0 [11/4/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F3%2F06&x=0&y=0 [11/4/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F3%2F06&x=0&y=0 [11/4/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F3%2F06&x=0&y=0 [11/4/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F5%2F01&x=0&y=0 [11/4/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F5%2F01&x=0&y=0 [11/4/11]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F5%2F01&x=0&y=0 [11/4/11]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/4/11]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/4/11]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]
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.
