WILL THE DEBT LIMIT BE LIFTED SHORTLY?
Friday, House GOP leaders announced a new proposal to authorize a three-month extension of federal government borrowing authority. House Majority Leader Eric Cantor (R-VA) summed up the plan in four words: “No budget, no pay.” Under the terms of the proposed legislation, members of Congress would end up working for free if they failed to approve a federal budget by April 15. The GOP still wants major spending cuts as a condition of any long-term debt limit increase.1
NO MONTHLY CHANGE IN CONSUMER PRICE INDEX
December’s CPI was flat, with core CPI rising only 0.1%. A 2.3% dip in gas prices helped, even as food prices rose 0.2%. The overall Producer Price Index posted a 0.2% decline for a third straight month. Inflation was tame in 2012: the CPI advanced only 1.7% last year compared to 3.0% for 2011, while the PPI rose just 1.3% for its smallest annual increase since 2008.2,3
RETAIL SALES STRONG IN DECEMBER
The Census Bureau notes that they increased 0.5% last month, bringing the yearly advance to 4.7%. Purchases made through non-store retailers rose 12.6% in 2012.3,4
CONSUMER SENTIMENT DECLINES
The University of Michigan’s preliminary January consumer sentiment index came in at 71.3 Friday, well under the 75.0 consensus forecast of economists surveyed by Reuters. This represents a 13-month low.5
STOCKS REACH A 5-YEAR PEAK
After a 0.95% weekly advance, the S&P 500 settled at 1,485.98 Friday. The DJIA (+1.20% to 13,649.70) and NASDAQ (+0.29% to 3,134.71) also extended their win streaks. On the COMEX Friday, gold settled at $1,687.00, oil at $95.56.5,6
THIS WEEK: All U.S. markets will be closed Monday as the nation observes Martin Luther King Jr. Day; the Presidential Inauguration will also be held in Washington, D.C. Tuesday, data on December’s existing home sales arrives plus earnings from Verizon, DuPont, Texas Instruments, Johnson & Johnson, Travelers, Google, IBM and AMD. Wednesday is another big earnings day, with Apple, McDonald’s, United Tech, Abbott Labs, Coach, WellPoint, Amgen, Netflix, SanDisk, Symantec and Western Digital all reporting results. On Thursday, Microsoft, 3M, Bristol-Myers, Nokia, Xerox, AT&T, E-Trade and Starbucks offer earnings reports. The Census Bureau releases December new home sales figures Friday, and earnings will be announced at Kimberly-Clark, P&G, Halliburton and Honeywell.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +4.16 +8.51 +2.56 +5.90
NASDAQ +3.82 +13.18 +6.79 +12.78
S&P 500 +4.19 +13.60 +2.43 +6.48
REAL YIELD 1/18 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.66% -0.15% 1.42% 2.34%
Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 1/18/125,8,9,10 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
WEEKLY QUOTE
“Never mistake a clear view for a short distance.”
– Paul Saffo
WEEKLY TIP
See if you can keep your essential expenses down to about 50% of your after-tax income.
WEEKLY RIDDLE
You can rearrange the letters in insatiable to make another ten-letter word that starts with the letter b. What is this ten-letter word?
Last week’s riddle:
It has avenues, rivers and parks – but no grass, water or asphalt. What is it?
Last week’s answer:
A map.
Citations.
1 – www.reuters.com/article/2013/01/18/us-usa-fiscal-budget-idUSBRE90H11H20130118 [1/18/13]
2 – www.usatoday.com/story/money/business/2013/01/16/consumer-price-index-december/1838907/ [1/16/13]
3 – news.morningstar.com/articlenet/article.aspx?id=581091 [1/15/13]
4 – www.census.gov/retail/marts/www/marts_current.pdf [1/15/13]
5 – www.cnbc.com/id/100390628 [1/18/13]
6 – www.bloomberg.com/news/2013-01-18/natural-gas-rises-on-cold-weather-forecast-commodities-at-close.html [1/18/13]
7 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [1/18/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F18%2F12&x=0&y=0 [1/18/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F18%2F12&x=0&y=0 [1/18/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F18%2F12&x=0&y=0 [1/18/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F18%2F08&x=0&y=0 [1/18/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F18%2F08&x=0&y=0 [1/18/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F18%2F08&x=0&y=0 [1/18/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F17%2F03&x=0&y=0 [1/18/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F17%2F03&x=0&y=0 [1/18/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F17%2F03&x=0&y=0 [1/18/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/18/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/18/13]
10 – treasurydirect.gov/instit/annceresult/press/preanre/2003/ofm010803.pdf [1/8/03]
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-0nly Registered Investment Adviser firm. Salt Lake City, Provo, Utah. Mark Lund is a Wealth Management Advisor, Investor Coach, and author of The Effective Investor.
