Presented by Mark Lund, The Investor Coach.
WEEKLY QUOTE
“Life is an adventure in forgiveness.”
– Norman Cousins
PAYROLL TAX HOLIDAY EXTENDED FOR 2 MONTHS
Friday, President Obama signed an extension of the payroll tax cut lasting through February 29. The stopgap legislation also extends long-term unemployment benefits through that date and postpones a 27% reduction in Medicare payments to doctors. The federal government will pay for the extenders by having Fannie Mae and Freddie Mac hike guarantee fees on new mortgages, a cost that will be passed on to those buying or refinancing a home in 2012.1
GAINS IN HARD GOODS ORDERS, CONSUMER SPENDING
November’s consumer spending increase was tiny: 0.1%. Wages advanced just 0.1% as well. However, last month also saw a 3.8% rise in durable goods orders (the best month for that indicator since July).2,3
IMPROVED HOME SALES, HOUSING STARTS
The Census Bureau reported a 1.6% increase in new home purchases in November, with the new home inventory at its smallest since March 2006. Housing starts hit a 19-month peak in November, soaring 9.3% on the month. Existing home sales also improved notably in November, rising 4.0%; according to the National Association of Realtors, that was the best month since January.3
CONSUMERS FEELING MERRIER
December’s final Thomson Reuters/University of Michigan consumer sentiment survey came in at 69.9 compared with November’s final 64.1 mark. That also beat the 68.0 estimate forecast by economists Reuters had surveyed.4
A YEAR-END RALLY GETS ROLLING
Stocks showed definite momentum last week. The 5-day performances: DJIA, +3.60% to 12,294.00: NASDAQ, +2.48% to 2,618.64; S&P 500, +3.74% to 1,265.33. At the close on Friday, oil settled at $99.68 on the NYMEX, gold closed at $1,606.00 on the COMEX, retail gasoline prices had fallen 2.15% in the past 30 days and natural gas futures were at lows unseen in four years.2,5
THIS WEEK: No major economic releases are on tap for Monday, Wednesday or Friday. Tuesday, the October edition of the S&P/Case-Shiller home price index arrives plus the Conference Board’s newest consumer confidence poll. Thursday, the National Association of Realtors issues its November report on pending home sales and we get the latest initial claims figures.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +6.19 +6.23 -0.0008 +2.25
NASDAQ -1.29 -1.76 +1.81 +3.47
S&P 500 +0.61 +0.68 -2.06 +1.05
REAL YIELD 12/23 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.04% 1.08% 2.35% 3.50%
Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 12/23/112,6,7,8 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
WEEKLY TIP
If 2012 is a year in which you start a business, remember three essentials to have on hand: an emergency fund, a year’s worth of operating capital and the support of your spouse.
WEEKLY RIDDLE
They are sometimes stomped on, yet they can also be very tasty and sweet. What are they?
Last week’s riddle:
A man leaves home and makes three left turns. He comes home again and sees two masked men waiting for him, but he jogs straight toward them with a smile as others cheer. Why is this man so unafraid?
Last week’s answer:
He is a baseball player who has just hit a home run. The masked men are the umpire and the other team’s catcher.
Citations.
1 – money.cnn.com/2011/12/23/news/economy/payroll_tax_cut_deal/ [12/23/11]
2 – money.msn.com/market-news/post.aspx?post=ef94fe40-0c3a-4fc1-bbe6-e6f3f7345f37 [12/23/11]
3 – www.businessweek.com/news/2011-12-23/sales-of-u-s-new-homes-in-november-rise-to-315-000-rate.html [12/23/11]
4 – www.reuters.com/article/2011/12/22/us-usa-economy-sentiment-idUSTRE7BL0YR20111222 [12/13/11]
5 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [12/23/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F23%2F10&x=0&y=0 [12/23/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F23F2%2F10&x=10&y=18 [12/23/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F23%2F10&x=0&y=0 [12/23/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F22%2F06&x=0&y=0 [12/23/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F22%2F06&x=0&y=0 [12/23/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F22%2F06&x=0&y=0 [12/23/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F24%2F01&x=0&y=0 [12/23/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F24%2F01&x=0&y=0 [12/23/11]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F24%2F01&x=0&y=0 [12/23/11]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/23/11]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/23/11]
8 – 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., 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. Stonecreek Wealth Advisors, Inc. a fee only registered investment advisor firm in Salt Lake City, Utah. Mark Lund is the author of The Effective Investor.
