GOOD NEWS ON MAIN STREET
Unemployment declined to a 5-year low of 7.0% in November, according to the Labor Department; underemployment also reached its lowest level in five years. The economy added 203,000 new jobs last month, far better than the 180,000 forecast by economists surveyed by Thomson Reuters. October also brought a 0.3% rise in consumer spending, even with the Bureau of Economic Analysis noting a 0.1% slip in consumer income. Finally, the University of Michigan’s consumer sentiment index jumped 7.4%. The initial December reading of 82.5 was the best in five months.1,2
NEW HOME BUYING HITS 33-YEAR PEAK
Surprising news from the Census Bureau: in October, the pace of new home sales was the strongest since 1980 thanks to a 25.4% boost. Even though sales slipped 6.6% for September, the annualized sales pace reached 444,000 units in October, putting the year-over-year increase in new home purchases at 21.6%.3
ISM RECORDS ADDITIONAL SECTOR GROWTH
According to the Institute for Supply Management’s purchasing manager indices, America’s service sector expanded for a forty-seventh consecutive month in November. The downside? ISM’s service sector PMI dropped 1.5 points for the month to 53.9. Its manufacturing PMI rose 0.9% in November to 57.3.4
STOCKS PULL OUT OF A SLUMP
After strong employment and personal spending data arrived Friday, the S&P 500 snapped a 5-day losing streak. The Dow gained 198.69 Friday. The week was not as terrific. While the NASDAQ rose 0.06% in five days to settle at 4,062.52 Friday, the S&P lost 0.04% to close the week at 1,805.09 and the Dow lost 0.41% to wrap up the week at 16,020.20.5,6,7
THIS WEEK: The data stream is light. No major releases are scheduled for Monday, but Fed officials Jeffrey Lacker, James Bullard and Richard Fisher will all speak at different conferences. Tuesday brings earnings from H&R Block and AutoZone, plus the October wholesale inventories report from the Census Bureau. Nothing major is scheduled for Wednesday. On Thursday, the Census Bureau provides retail sales figures for November and an October business inventories report; new initial jobless claims numbers will also arrive. Friday sees the release of November’s Producer Price Index.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +22.25 +22.53 +17.10 +6.24
NASDAQ +34.54 +35.90 +33.83 +10.96
S&P 500 +26.57 +27.66 +21.21 +7.01
REAL YIELD 12/6 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.77% -0.87% 2.23% 1.92%
Sources: CNNMoney.com, bigcharts.com, treasury.gov – 12/6/135,6,7,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
WEEKLY QUOTE
“Imagination is more important than knowledge. For knowledge is limited, whereas imagination embraces the entire world, stimulating progress, giving birth to evolution.”
– Albert Einstein
WEEKLY TIP
If you are close to retirement age, think twice about financing major purchases with debt. The less debt you retire with, the better.
WEEKLY RIDDLE
What has one eye and yet can’t see?
Last week’s riddle:
A palindrome is any word, phrase, or number that reads the same either forward or backward. Can you think of a palindrome word that, when spelled in all capitals, looks the same backwards, forwards, or upside down?
Last week’s answer:
NOON.
Citations.
1 – reuters.com/article/2013/12/06/us-usa-economy-idUSBRE9B40KJ20131206 [12/6/13]
2 – thestreet.com/story/12140200/1/markets-rebound-as-unemployment-hits-five-year-low.html [12/6/13]
3 – tinyurl.com/lfb8os9 [12/4/13]
4 – ism.ws/ISMReport/NonMfgROB.cfm [12/4/13]
5 – money.cnn.com/data/markets/dow/ [12/6/13]
6 – money.cnn.com/data/markets/nasdaq/ [12/6/13]
7 – money.cnn.com/data/markets/sandp/ [12/6/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F6%2F12&x=0&y=0 [12/6/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F6%2F12&x=0&y=0 [12/6/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F6%2F12&x=0&y=0 [12/6/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F5%2F08&x=0&y=0 [12/6/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F5%2F08&x=0&y=0 [12/6/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F5%2F08&x=0&y=0 [12/6/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F5%2F03&x=0&y=0 [12/6/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F5%2F03&x=0&y=0 [12/6/13]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F5%2F03&x=0&y=0 [12/6/13]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/6/13]
10 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/6/13]
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 an independent fee-only Investment Advisor, Investor Coach and the author of The Effective Investor. Located in Salt Lake City and Provo Utah.
