A FISCAL CLIFF DEAL SOONER RATHER THAN LATER?
House Speaker John Boehner and Senate Majority Leader Harry Reid both called Friday’s fiscal cliff meeting with President Obama and the White House economic team “constructive”. Speaker Boehner noted that he had introduced a framework for tax reform, adding that tax increases might be accepted if “accompanied by serious spending cuts”. President Obama is in Asia this week; members of his senior team will continue talks with leaders of Congress. House Minority Leader Nancy Pelosi urged lawmakers to set “a deadline before Christmas” to resolve the dilemma, emphasizing the need to “send a message of confidence to consumers [and] the markets” in the coming weeks. Friday, the Wall Street Journal published reports of “advanced talks” at the White House about a deal to postpone January’s planned $100 billion in spending cuts for 6-12 months while smaller and more targeted cuts and tax increases are made in the interim.1,2
DID SUPERSTORM SANDY DENT RETAIL SALES?
The storm may have had an effect. The Commerce Department noted a 0.3% overall drop in retail purchases for October, with core retail sales down 0.1%. This follows a (revised) 1.3% gain for September and a 1.0% advance in August.3
TAME INFLATION IN OCTOBER
Consumer prices ticked up but 0.1% last month, compared to 0.6% in September. Wholesale inflation lessened for the first time in five months in October; the Producer Price Index retreated 0.2% after rising 1.1% in the prior month. Annual consumer inflation was running at 2.2% in October.4
STOCKS MOVE SOUTH
The Dow lost 1.77% last week, while the NASDAQ and S&P 500 respectively lost 1.78% and 1.45%. On Friday, the Dow closed at 12,588.31, the NASDAQ at 2,853.13 and the S&P at 1,359.88. COMEX gold settled Friday at $1,712.30 per ounce; NYMEX crude ended the trading week at just $86.62 a barrel.5,6,7
THIS WEEK: Monday, earnings from Lowe’s, Jack in the Box, Tyson Foods and Urban Outfitters are released, plus NAR’s report on existing home sales. Tuesday, data on October housing starts arrives along with Q3 results from Hewlett-Packard, Best Buy, Chico’s and Campbell Soup; Fed Chairman Ben Bernanke speaks at the Economic Club of New York. November’s final University of Michigan consumer sentiment survey arrives Wednesday, and so do the latest initial jobless claims. Thanksgiving is Thursday; U.S. financial markets will be closed. Black Friday follows, with the NYSE closing for business at 1:00pm EST.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +3.03 +5.73 -0.89 +4.67
NASDAQ +9.52 +8.09 +1.64 +10.22
S&P 500 +8.13 +9.94 -1.36 +4.95
REAL YIELD 11/16 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.81% 0.05% 1.80% 3.10%
Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 11/16/125,8,9,10 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
WEEKLY QUOTE
“Life is like a ten-speed bicycle. Most of us have gears we never use.”
– Charles Schulz
WEEKLY TIP
If you are a new parent, you have 18 years to save for your child’s university tuition. Consider an opening an education account in which earnings can compound with tax deferral.
WEEKLY RIDDLE
Rhyming Riddle: My first is twice in apple but not once in tart. My second is in liver but not in heart. My third is in giant and also in ghost. Whole I’m best when I am roast. What am I?
Last week’s riddle:
It has no body, but it has a copper head and copper tail. It can be found in the street and in just about any store. What is it?
Last week’s answer:
A penny.
Citations.
1 – whitehouse.blogs.cnn.com/2012/11/16/congressional-leaders-strike-postive-tone-after-constructive-white-house-meeting/ [11/16/12]
2 – www.cnbc.com/id/49852886/ [11/16/12]
3 – blogs.wsj.com/economics/2012/11/14/worries-that-retail-weakness-extends-beyond-sandy/ [11/14/12]
4 – www.bloomberg.com/news/2012-11-15/consumer-prices-in-u-s-increased-at-a-slower-pace-in-october.html [11/15/12]
5 – www.cnbc.com/id/49853571 [11/16/12]
6 – markets.on.nytimes.com/research/markets/commodities/commodities.asp [11/16/12]
7 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [11/16/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F16%2F11&x=0&y=0 [11/16/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F16%2F11&x=0&y=0 [11/16/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F16%2F11&x=0&y=0 [11/16/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F16%2F07&x=0&y=0 [11/16/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F16%2F07&x=0&y=0 [11/16/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F16%2F07&x=0&y=0 [11/16/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F15%2F02&x=0&y=0 [11/16/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F15%2F02&x=0&y=0 [11/16/12]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F15%2F02&x=0&y=0 [11/16/12]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/16/12]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/16/12]
10 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]
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 adviser. Salt Lake City, Provo, Utah. Mark Lund is the author of The Effective Investor.
