CONSUMER & PRODUCER PRICES DECLINE
Last week, Labor Department reports showed the Consumer Price Index down 0.1% for October while the Producer Price Index slipped 0.2% with help from a 3.8% dip in gasoline costs. The real news was the remarkably tame yearly inflation. In the last 12 months, the CPI has only increased 1.0% and the PPI just 0.3% (although the core PPI did rise 1.4%). What do these annualized gains represent? The weakest wholesale inflation since 2009.1,2
FEWER HOMES SELL IN OCTOBER
Existing home sales fell 3.2% last month, according to the National Association of Realtors. This marks the second straight monthly decline. Higher mortgage rates, narrowing inventory and the federal government’s 16-day shutdown certainly influenced sales volume. The median sales price of an existing home was $199,500 last month, 12.8% higher than a year ago.1,3
RETAIL SALES IMPROVE
October saw a solid 0.4% rise in the indicator, and that surprised analysts who thought the federal shutdown would hurt the headline number. Auto sales powered October’s gain, but Census Bureau data showed a 0.2% advance even with car and truck buying removed.1
S&P CLOSES ABOVE 1,800
While the October Federal Reserve policy meeting minutes revealed the possibility of tapering QE3 in “the coming months,” stocks still pulled higher on the week. The Dow (+0.65% to 16,064.77), NASDAQ (+0.14% to 3,991.65) and S&P 500 (+0.37% to 1,804.76) all shrugged off midweek dips.1,4
THIS WEEK: NAR releases its October pending home sales report Monday, complementing earnings from Fifth Street Finance and Wet Seal. On Tuesday, the Census Bureau issues September and October reports on housing starts and building permits, the Conference Board’s November consumer confidence index comes out, and the September Case-Shiller Home Price Index arrives; additionally, TiVo and Chico’s announce Q3 results. Wednesday brings the University of Michigan’s final November consumer sentiment index, the Conference Board’s October leading indicators index and the October durable goods orders report from the Census Bureau. All U.S. financial markets will be closed Thursday in observance of Thanksgiving. Friday is Black Friday, of course; the NYSE and NASDAQ will close at 1:00pm EST with the bond market likely closing an hour later.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +22.59 +25.15 +19.93 +6.68
NASDAQ +32.20 +36.39 +37.67 +11.08
S&P 500 +26.54 +29.74 +25.12 +7.43
REAL YIELD 11/22 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.56% -0.71% 3.15% 1.93%
Sources: USATODAY.com, bigcharts.com, treasury.gov – 11/22/135,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
WEEKLY QUOTE
“Always forgive your enemies; nothing annoys them so much.”
– Oscar Wilde
WEEKLY TIP
If your income, expenses or financial commitments have changed recently, it may be a good idea to reexamine your retirement savings effort.
WEEKLY RIDDLE
I’m not alive, yet I grow. I need air, yet I have no lungs. I lack a mouth, yet water will calm me down. What am I?
Last week’s riddle:
What common English-language word becomes shorter when you make it longer?
Last week’s answer:
Short.
Citations.
1 – news.morningstar.com/articlenet/article.aspx?id=620267 [11/20/13]
2 – marketwatch.com/story/us-wholesale-costs-fall-again-in-october-2013-11-21 [11/21/13]
3 – business.time.com/2013/11/20/u-s-existing-home-sales-fall-3-2-percent-in-october/ [11/20/13]
4 – thestreet.com/story/12120723/1/market-hustle-curb-that-enthusiasm-dow-hesitates-at-16000.html [11/22/13]
5 – usatoday.com/money/markets/overview/ [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F12&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F12&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F12&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F08&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F08&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F08&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F03&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F03&x=0&y=0 [11/22/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F03&x=0&y=0 [11/22/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/22/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/22/13]
All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. 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 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. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. This material was prepared by MarketingLibrary.Net Inc., for Mark Lund an independent fee-only Investment Advisor, Investor Coach and the author of The Effective Investor. Located in Salt Lake City and Provo Utah.
