“MINI-BARGAIN” PASSES HOUSE, HEADS FOR SENATE
Last week, the congressional budget committee headed by Rep. Paul Ryan (R-WI) and Sen. Patty Murray (D-WA) succeeded where its 2011 predecessor had failed – it reached a deal, albeit a small-scale one. The House passed its budget bill by a 332-94 vote Thursday night; the legislation heads for the Senate this week. If made law, it will reduce the federal deficit by $23 billion during the next 10 years while halving 2014 sequestration cuts to defense spending and non-defense discretionary spending. (Other scheduled cuts in mandatory federal spending will proceed.) This deal doesn’t raise taxes, and it doesn’t extend unemployment insurance, which could expire on December 28 for 1.3 million Americans. Federal spending would increase by $45 billion next year as a result of the agreement.1,2
FALL BRINGS BETTER RETAIL SALES
The 0.7% November gain was the biggest recorded by the Commerce Department in five months and brought the year-over-year improvement to 4.7%. Minus auto sales, the gain was still 0.4%. October’s retail sales gain was revised up to 0.6%.3
PRODUCER PRICES RETREAT AGAIN
The Producer Price Index declined 0.1% in November following its 0.2% dip for October. Economists polled by Bloomberg thought the headline PPI would be flat for November, instead of retreating for a third consecutive month. November did bring a 0.1% rise in the core PPI.4
ROUGH SLEDDING FOR STOCKS SO FAR IN DECEMBER
Signals of an improving economy also brought worries about a December taper by the Federal Reserve. As a consequence, the S&P 500 (-1.65% to 1,775.32), NASDAQ (-1.51% to 4,000.98) and Dow (-1.65% to 15,755.36) all staged 5-day retreats.5
THIS WEEK: Monday brings the Federal Reserve’s report on November industrial output; also, Ben Bernanke speaks briefly at the Fed’s Centennial Commemoration. Tuesday, the November CPI comes out along with the December NAHB Housing Market Index. On Wednesday, financial markets around the world will be waiting for the Fed’s latest policy statement; reports on November building permits and September, October and November housing starts will arrive from the Census Bureau. Thursday, NAR puts out its existing home sales report for November, the Conference Board issues its November leading indicator index and new initial jobless claims figures appear; Nike, ConAgra Foods and Pier 1 offer earnings news. Friday, the Bureau of Economic Analysis makes its final estimate of Q3 GDP.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +20.23 +19.62 +16.51 +5.69
NASDAQ +32.50 +33.72 +31.94 +10.53
S&P 500 +24.48 +25.07 +20.36 +6.53
REAL YIELD 12/13 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.72% -0.73% 2.43% 1.91%
Sources: USATODAY.com, bigcharts.com, treasury.gov – 12/13/136,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
WEEKLY QUOTE
“I learned that courage was not the absence of fear, but the triumph over it.”
– Nelson Mandela
WEEKLY TIP
If you marry before the end of 2013, the IRS will consider you married for the entire tax year. So when you send in your 2013 federal return, you will either have to file as married filing jointly or married filing separately.
WEEKLY RIDDLE
I have a bank, yet no cash. I can run, but can’t walk. I have a bed, but never sleep. I have a mouth, but ingest no meals. What am I?
Last week’s riddle:
What has one eye and yet can’t see?
Last week’s answer:
A sewing needle.
Citations.
1 – swampland.time.com/2013/12/12/house-passes-budget-bill-to-increase-spending-reverse-some-automatic-cuts/ [12/12/13]
2 – washingtonpost.com/blogs/wonkblog/wp/2013/12/10/heres-whats-in-paul-ryan-and-patty-murrays-mini-budget-deal/ [12/10/13]
3 – marketwatch.com/story/us-retail-sales-rise-07-in-november-2013-12-12-8913022 [12/12/13]
4 – reuters.com/article/2013/12/13/us-producerprices-idUSBRE9BC0HJ20131213 [12/13/13]
5 – fxstreet.com/news/forex-news/article.aspx?storyid=c9057f47-0e42-42ab-b939-e66c8ff9f833 [12/13/13]
6 – usatoday.com/money/markets/overview/ [12/13/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F13%2F12&x=0&y=0 [12/13/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F13%2F12&x=0&y=0 [12/13/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F13%2F12&x=0&y=0 [12/13/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F12%2F08&x=0&y=0 [12/13/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F12%2F08&x=0&y=0 [12/13/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F12%2F08&x=0&y=0 [12/13/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F12%2F03&x=0&y=0 [12/13/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F12%2F03&x=0&y=0 [12/13/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F12%2F03&x=0&y=0 [12/13/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/13/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/13/13]
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. 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, The 401k Advisor, Investor Coach and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. an independent, fee-only, Registered Investment Advisor firm located in Salt Lake City and Provo Utah.
