UNREST IN IRAQ SENDS OIL TOWARD $107
NYMEX crude settled at $106.91 Friday, up 4.1% for the week in reaction to the Sunni-led ISIS militant movement seizing control of Mosul and other cities in northern and eastern Iraq. It was oil’s biggest weekly spike since December. While the price of unleaded gasoline fell a cent for the week to $3.65 a gallon according to AAA, a short-term increase seems imminent. Iraqi oil supplies were not seriously impacted as of the weekend: most oil production in Iraq occurs in the nation’s southern half, and Iraq hasn’t exported oil from its northern regions since March.1,2
RETAIL SALES, SENTIMENT INDEX UNDERWHELM
U.S. retail sales rose 0.3% in May, beneath the 0.7% gain forecast economists polled by the Wall Street Journal. With car buying and gasoline purchases factored out, they were actually flat for the month. (In better news, the Commerce Department revised April’s retail sales increase north to 0.5% and sales are up 4.3% in the past 12 months.) If consumer purchasing was a bit disappointing, so was the University of Michigan’s initial June index of consumer sentiment, which fell from its previous level of 81.9 to 81.2.3,4
PRODUCER PRICES RETREAT
The Producer Price Index pulled back 0.2% for May, its largest decline since October; the core PPI dipped 0.1% for May. Bureau of Labor Statistics data shows both the headline and core PPI up 2.0% in the past 12 months, however.4
S&P 500 SNAPS ITS 3-WEEK WINNING STREAK
Anxieties about Iraq and subpar economic indicators took the tailwind from the market last week. Friday’s trading day ended with the S&P at 1,936.16, the Nasdaq at 4,310.65 and the Dow at 16,775.74. Across five days, the S&P retreated 0.68%, the Nasdaq 0.25% and the Dow 0.88%.5
THIS WEEK: Monday brings the federal government’s report on May industrial output. On Tuesday, the Bureau of Labor Statistics issues the May Consumer Price Index, the Census Bureau releases its report on May housing starts and building permits and Adobe and Mitel report earnings. The Federal Reserve wraps up a policy meeting Wednesday, with a press conference to follow; Wall Street will also consider quarterly results from Red Hat and FedEx. Thursday, a new Conference Board leading indicator index arrives along with the latest initial claims figures and earnings from Oracle, Kroger, Smith & Wesson and BlackBerry. Darden Restaurants and CarMax announce earnings Friday.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +1.20 +10.54 +18.13 +6.23
NASDAQ +3.21 +25.25 +26.43 +11.91
S&P 500 +4.75 +18.32 +20.92 +7.21
REAL YIELD 6/13 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.41% 0.15% 1.91% 2.26%
Sources: USATODAY.com, bigcharts.com, treasury.gov – 6/13/146,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
WEEKLY QUOTE
“Success is often the result of taking a misstep in the right direction.”
– Al Bernstein
WEEKLY TIP
Sooner or later, many of us end up paying for services we no longer need. Saying goodbye to those services means quick savings.
WEEKLY RIDDLE
When I change my jacket, I make a loud noise and become larger, but I weigh less. What am I?
Last week’s riddle:
I run but never walk, often murmur, never talk, have a bed and never sleep, have a mouth and never eat. What am I?
Last week’s answer:
A river.
Citations.
1 – ism.ws/ISMReport/NonMfgROB.cfm [5/5/14]
2 – bloomberg.com/news/2014-05-09/u-s-stock-futures-retreat-as-investors-assess-earnings.html [5/9/14]
3 – fuelgaugereport.aaa.com [5/9/14]
4 – proactiveinvestors.com/companies/news/54023/gold-loses-12-on-week-oil-settles-at-9999-54023.html [5/9/14]
5 – thestreet.com/story/12702814/1/market-hustle-stocks-lower-amid-deal-news-markets-eye-ukraine-vote.html [5/9/14]
6 – usatoday.com/money/markets/overview/ [5/9/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F9%2F13&x=0&y=0 [5/9/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F9%2F13&x=0&y=0 [5/9/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F9%2F13&x=0&y=0 [5/9/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F8%2F09&x=0&y=0 [5/9/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F8%2F09&x=0&y=0 [5/9/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F8%2F09&x=0&y=0 [5/9/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F10%2F04&x=0&y=0 [5/9/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F10%2F04&x=0&y=0 [5/9/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F10%2F04&x=0&y=0 [5/9/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/9/14]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/9/14]
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 providing 401k consulting for small businesses and private investment management services for professional athletes and select individuals. Stonecreek is located in Salt Lake City, Murray, West Jordan, Sandy, Draper, South Jordan, Provo, Orem, Lehi, Highland, Alpine, American Fork all in Utah.
