Q1 GDP COMES IN AT 2.5%
The initial estimate of first quarter growth from the Bureau of Economic Analysis disappointed some analysts who had expected 3% expansion or better. Personal consumption and inventory accumulation were the prime sources of growth. Personal spending rose 3.2% in the quarter, but real disposable personal income fell 5.3%, which led the personal savings rate to slip to 2.6% from 4.7% in Q4. The big picture? The economic recovery is definite, but still sluggish. Overall durable goods orders dropped 5.7% in March, according to the Commerce Department.1,2
EXISTING HOME SALES FALL; NEW HOME SALES RISE While March brought a 0.6% dip in residential resales, the National Association of Realtors also noted the 10.3% gain in the pace of home buying from a year before. The Census Bureau reported a 1.5% gain in new home sales last month, with the year-over-year improvement in the sales pace at 18.5%.3
CONSUMERS GROW MORE POSITIVE AS APRIL ENDS
Economists polled by Reuters had forecast April’s final consumer sentiment reading from the University of Michigan to rise mildly to 73.2. Instead, it jumped to 76.4. That was still underneath the final March mark of 78.6.4
STOCKS KEEP ADVANCING
Across a volatile week, the Dow went +1.13% to settle at 14,712.55 Friday. The NASDAQ (+2.28% to 3,279.26) and S&P 500 (+1.74% to 1,582.24) also improved. At Friday’s close, about half of S&P 500 companies had reported quarterly results; just 42% had surpassed revenue forecasts, but 69% had beaten earnings expectations.4
THIS WEEK: The March consumer spending report arrives Monday, plus NAR’s March pending home sales figures and earnings from Hartford Financial, Newmont Mining and Buffalo Wild Wings. Tuesday offers the Conference Board’s April consumer confidence poll, February’s S&P/Case-Shiller Home Price Index and Q1 results from Pfizer, Aetna, UBS, Deutsche Bank, BP, NYSE Euronext, Sirius XM, US Steel and DreamWorks. Wednesday brings ADP’s April employment report, ISM’s April manufacturing index, a policy statement from the Federal Reserve, and earnings from Facebook, Visa, Allstate, Comcast, MasterCard, Merck, Time Warner, CVS, Chesapeake Energy, Clorox, Humana, CBS, Marriott, MetLife and Yelp. Earnings from Kellogg, GM, Royal Dutch Shell, Beazer Homes, AIG and Kraft Foods come out Thursday, plus April’s Challenger job cut report. On Friday, the Labor Department’s April employment report arrives along with ISM’s April service sector index and quarterly results from Berkshire Hathaway.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +12.27 +11.42 +2.82 +7.71
NASDAQ +8.60 +7.50 +7.07 +12.86
S&P 500 +10.94 +13.02 +2.64 +7.60
REAL YIELD 4/26 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.68% -0.29% 1.60% 2.18%
Sources: cnbc.com, bigcharts.com, treasury.gov – 4/26/134,5,6,7 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
WEEKLY QUOTE
“You can be standing right in front of the truth and not necessarily see it, and people only get it when they’re ready to get it.”
– George Harrison
WEEKLY TIP
The first step to saving money is to figure out where you are spending it. Break down essential and inessential costs in your life.
WEEKLY RIDDLE
How can you name three consecutive days without mentioning the words Monday, Tuesday, Wednesday, Thursday, Friday, Saturday or Sunday?
Last week’s riddle:
What has a tail and head, but no body?
Last week’s answer:
A coin.
Citations.
1 – www.bloomberg.com/news/2013-04-26/latest-gdp-report-shows-u-s-economy-still-waiting-for-liftoff.html [4/26/13]
2 – briefing.com/investor/calendars/economic/2013/04/22-26 [4/26/13]
3 – www.csmonitor.com/Business/new-economy/2013/0423/New-home-sales-climb-1.5-percent-bolstering-housing-recovery [4/23/13]
4 – www.cnbc.com/id/100678668 [4/26/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F26%2F12&x=0&y=0 [4/26/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F26%2F12&x=0&y=0 [4/26/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F26%2F12&x=0&y=0 [4/26/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F25%2F08&x=0&y=0 [4/26/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F25%2F08&x=0&y=0 [4/26/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F25%2F08&x=0&y=0 [4/26/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F25%2F03&x=0&y=0 [4/26/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F25%2F03&x=0&y=0 [4/26/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F25%2F03&x=0&y=0 [4/26/13]
6 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/26/13]
7 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/26/13]
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. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 Mark Lund an independent investment advisor, investor coach and author of The Effective Investor. Located in Salt Lake City and Provo Utah.
