Economic Update for March 26, 2012

Presented by Mark Lund, Investor Coach.

WEEKLY QUOTE
“It is every man’s obligation to put back into the world at least the equivalent of what he takes out of it.”
– Albert Einstein

HOUSING MARKET COOLS DOWN IN February
Nationally, home sales took a step back last month. Last week, the National Association of Realtors reported a 0.9% drop in residential resales in February. The federal government subsequently announced a 1.6% slip in new home purchases last month, although new home prices rose by over 8.0%. The year-over-year numbers are better: existing home sales have jumped 8.8% in the last 12 months, and new home sales have picked up by 11.4%. Housing starts were down 1.1% in February from January’s 4-year high, but building permits were up 5.1% for the month.^1,2

INITIAL CLAIMS HIT A NEW 4-YEAR LOW
According to the Labor Department, claims fell by 5,000 to a seasonally adjusted 348,000 for the week ending March 17. This is the smallest amount since March 2008.³

LEADING INDICATORS MOVE NORTH AGAIN
The Conference Board’s monthly index rose 0.7% for February, with reduced jobless claims and the interest rate spread exerting the most influence. Eight of the index’s ten indicators were up for the month.³

BULLS PRESS PAUSE BUTTON
Stocks pulled back for the week as anxieties over subpar foreign manufacturing indices inspired some profit-taking. A new concern surfaced Friday: Reuters said Iran’s oil exports had dropped 14% this month. The S&P 500 retreated 0.50% last week to 1,397.11 Friday. The DJIA lost 1.15% on the week to settle Friday at 13,080.73, while the NASDAQ advanced 0.41% in five days to wrap up Friday at 3,067.92. Gold ended the week at $1,662.40 an ounce, oil at $106.87 a barrel. Unleaded gasoline averaged $3.89 a gallon nationally in AAA’s newest price survey.^4,5

THIS WEEK: Plenty of crucial data appears. On Monday, the National Association of Realtors tells us about February’s pending home sales, and Fed chairman Ben Bernanke speaks about the labor market at NABE’s annual conference. Tuesday, we get the January S&P/Case-Shiller Home Price Index, the Conference Board’s March consumer confidence poll and Q4 results from Lennar and Walgreens. Wednesday, February durable goods orders figures come out plus earnings from Family Dollar and Texas Industries. Thursday offers the government’s final take on Q4 GDP and earnings from Best Buy and Research in Motion. On Friday, February consumer spending data arrives plus the final University of Michigan consumer sentiment survey for March.

 Sources: msn.money.com, bigcharts.com, treasury.gov, treasurydirect.gov – 3/23/12^4,6,7,8 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

WEEKLY TIP
Succession planning isn’t just about an orderly ownership transition. It is also about tax efficiency. Waiting too long can mean paying more in insurance premiums, fees and taxes.

WEEKLY RIDDLE
You need to take a gallon of oil out of a barrel of oil. How can you do it using only a 3-gallon container and a 5-gallon container?

Last week’s riddle:
It is a short and simple word, and something that everyone needs. Put an ‘r’ on the end and you have a new friend, but if the first letter goes away, you are sad. What is this word?

Last week’s answer:
Love.

Citations.
1 – www.washingtonpost.com/business/economy/new-home-sales-fell-in-february-but-prices-rose/2012/03/23/gIQA92X8VS_story.html [3/23/12]
2 – business.time.com/2012/03/20/us-builders-start-fewer-homes-but-permits-jump/ [3/20/12]
3 – www.nasdaq.com/article/us-jobless-claims-fall-in-week-indicators-rise-20120322-01286 [3/22/12]
4 – money.msn.com/market-news/post.aspx?post=c38964a6-60ee-42a2-8b4e-cd45ed26f39d [3/23/12]
5 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [3/23/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F23%2F11&x=0&y=0 [3/23/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F23%2F11&x=0&y=0 [3/23/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F23%2F11&x=0&y=0 [3/23/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F23%2F07&x=0&y=0 [3/23/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F23%2F07&x=0&y=0 [3/23/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F23%2F07&x=0&y=0 [3/23/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F22%2F02&x=0&y=0 [3/23/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F22%2F02&x=0&y=0 [3/23/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F22%2F02&x=0&y=0 [3/23/12]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/23/12]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/23/12]
8 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]

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. An independent fee only registered investment advisor firm in Salt Lake City, Utah.  Mark Lund is the author of The Effective Investor.