JOBS REPORT SENDS MIXED SIGNALS
Unemployment sank to a 4½-year low of 7.4% last month, even as the pace of hiring declined a bit from spring. The Labor Department’s July report showed non-farm payrolls expanding by 162,000 jobs, with retail, bar and restaurant hires accounting for most of the gain. The ranks of the self-employed grew 2.6% last month. With jobs data like this, some analysts are wondering if the Federal Reserve will reconsider its plan to reduce asset purchases later this year.1
HOUSEHOLD SPENDING MEETS EXPECTATIONS
Consumer spending rose 0.5% in June, matching the consensus forecast of economists polled by Reuters; consumer incomes grew 0.3%. The Commerce Department also said the economy grew at a 1.7% annual pace in Q2, up from 1.1% in Q1. July’s Conference Board consumer confidence index came in at 80.3 last week; economists polled by MarketWatch had expected a reading of 81.1.2,3
ISM FINDS JUMP IN MANUFACTURING GROWTH
The Institute for Supply Management’s manufacturing index hit 55.4% in July, much improved from 50.9% in June. Economists surveyed by MarketWatch had anticipated a 52.0 reading.3
HOME SALE CONTRACTS DECREASE, BUT PRICES RISE
The National Association of Realtors said pending home sales dipped 0.4% for June after rising 5.8% for May. May’s edition of the S&P/Case-Shiller Home Price Index offered better news, however: a 12.2% overall annualized gain.3
MORE RECORDS SET ON WALL STREET
On Friday, the S&P 500 settled at 1,709.67 – its highest close ever – thanks to a 1.07% weekly advance. The Dow closed at 15,658.36 Friday, the NASDAQ at 3,689.59; they respectively gained 0.64% and 2.12% last week.4,5
THIS WEEK: ISM’s July non-manufacturing PMI arrives Monday, along with earnings reports from HSBC, Tyson Foods, Jamba, Fidelity and Scripps. Q2 results from Molson Coors, OfficeMax, Starwood Properties, CVS and Fossil appear Tuesday. Wednesday, earnings reports arrive from Novatel, Time Warner, Rosetta Stone, Prudential and Ralph Lauren. Thursday brings the latest initial claims numbers and earnings from Priceline, Sports Chalet, Nvidia, T-Mobile and Orbitz. On Friday, we get the Census Bureau’s June wholesale inventories report and the latest inflation and industrial production data from China.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +19.49 +21.58 +7.65 +7.11
NASDAQ +22.19 +26.80 +11.93 +11.51
S&P 500 +19.88 +25.25 +7.13 +7.44
REAL YIELD 8/2 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.42% -0.69% 1.63% 2.40%
Sources: thestreet.com, bigcharts.com, treasury.gov – 8/2/135,6,7,8 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
WEEKLY QUOTE
“Europe was created by history. America was created by philosophy.”
– Margaret Thatcher
WEEKLY TIP
Create a plan for the distribution of your retirement savings. You will use up a significant portion of those assets; have a withdrawal strategy defined.
WEEKLY RIDDLE
I am usually only as wide as a thumb, and I typically travel across the nation for less than a dollar, all while lying flat. What am I?
Last week’s riddle:
What has two hands but will never clap?
Last week’s answer:
A clock.
Citations.
1 – tinyurl.com/mjef2t3 [8/2/13]
2 – tinyurl.com/lh438e5 [8/2/13]
3 – marketwatch.com/Economy-Politics/Calendars/Economic [8/1/13]
4 – tinyurl.com/mqc7vx6 [8/2/13]
5 – usatoday.com/money/markets/overview/ [8/2/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F2%2F12&x=0&y=0 [8/2/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F2%2F12&x=0&y=0 [8/2/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F2%2F12&x=0&y=0 [8/2/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F1%2F08&x=0&y=0 [8/2/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F1%2F08&x=0&y=0 [8/2/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F1%2F08&x=0&y=0 [8/2/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F1%2F03&x=0&y=0 [8/2/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F1%2F03&x=0&y=0 [8/2/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F1%2F03&x=0&y=0 [8/2/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/2/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/2/13]
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. Mark is located in Salt Lake City and Provo Utah.
