INFLATION PICKS UP
The Consumer Price Index increased 0.4% in May – the biggest monthly rise in over a year, with food prices up 0.5%. Labor Department data showed the core CPI (minus energy and food prices) up 0.3% for May; that was its largest monthly advance since August 2011. All this put the annualized gain in the headline CPI at 2.1% and the yearly gain in core CPI at 2.0%. Analysts polled by Reuters thought the overall CPI would increase 0.2% last month. The turmoil in Iraq could help to drive consumer prices higher this summer.1
MAY SEES LESS NEW RESIDENTIAL CONSTRUCTION
Reduced home buying eventually means reduced groundbreaking. May’s housing numbers from the Census Bureau reflected that – housing starts slipped 6.5% last month while building permits fell 6.4%. Housing starts are still maintaining a million-unit seasonally adjusted annual pace.1
OIL SETTLES AT A 9-MONTH HIGH
$107.26 a barrel – that was where NYMEX crude for July delivery closed at Friday. Even so, prices leveled off last week as ISIS insurgents in Iraq remained far away from Basra, that country’s hub for oil exports.2
WILL THE DOW REACH 17,000 THIS WEEK?
At Friday’s close, the blue chips stood at 16,947.08. The Dow rose another 1.02% last week, and its 5-day gain was surpassed by the advances of the Nasdaq (+1.33% to 4,368.04) and the S&P 500 (1.37% to 1,962.87). Investors were encouraged by the Federal Reserve: the Federal Open Market Committee predictably elected to make another $10 billion cut to QE3 for July and expressed confidence that the economy was improving in its Wednesday policy statement, even as it cut its projections for 2014 growth slightly to 2.1%.3,4,5
THIS WEEK: The NAR releases its May existing home sales report Monday. On Tuesday, the Conference Board’s June consumer confidence index, the Census Bureau’s May new home sales report and the April S&P/Case-Shiller home price index all arrive, along with quarterly results from Walgreens. The last federal government estimate of Q1 GDP appears Wednesday, plus the Census Bureau’s May report on durable goods orders and earnings from Bed Bath & Beyond, Lennar, General Mills and Monsanto. Thursday brings May consumer spending data from the Commerce Department, the latest initial jobless claims figures and earnings announcements from Nike, ConAgra Foods and Accenture. Friday sees the release of the University of Michigan’s final June consumer sentiment index.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +2.23 +14.83 +19.69 +6.34
NASDAQ +4.58 +29.82 +27.80 +12.12
S&P 500 +6.20 +23.59 +22.61 +7.37
REAL YIELD 6/20 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.35% 0.46% 1.91% 2.16%
Sources: USATODAY.com, bigcharts.com, treasury.gov – 6/20/145,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
WEEKLY QUOTE
“Great works are performed not by strength, but perseverance.”
– Samuel Johnson
WEEKLY TIP
A mental trick to help you build your emergency fund: treat it like a bill that you have to pay each month, and make a corresponding monthly “payment” to it.
WEEKLY RIDDLE
Three playing cards lie face down on a table. A jack is to the left of a queen. To the left of a spade is a diamond. A king is left of a heart. A spade is right of a king. What are the three cards?
Last week’s riddle:
When I change my jacket, I make a loud noise and become larger, but I weigh less. What am I?
Last week’s answer:
Popcorn.
Citations.
1 – tinyurl.com/pkdpugh [6/17/14]
2 – marketwatch.com/story/brent-slips-below-115-as-iraq-worries-simmer-2014-06-20 [6/20/14]
3 – google.com/finance?q=INDEXDJX%3A.DJI&ei=Aa-kU7C5O6SxsgezkIHQDA [6/20/14]
4 – cbsnews.com/news/federal-reserve-tapers-by-another-10-billion/ [6/18/14]
5 – usatoday.com/money/markets/overview/ [6/20/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F20%2F13&x=0&y=0 [6/20/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F20%2F13&x=0&y=0 [6/20/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F20%2F13&x=0&y=0 [6/20/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F19%2F09&x=0&y=0 [6/20/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F19%2F09&x=0&y=0 [6/20/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F19%2F09&x=0&y=0 [6/20/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F21%2F04&x=0&y=0 [6/20/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F21%2F04&x=0&y=0 [6/20/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F21%2F04&x=0&y=0 [6/20/14]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/20/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/20/14]
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.
