Weekly Market News for the Week of August 17, 2009

Presented by Mark Lund.

Quote of the week. “We are happy when we are growing.” – William Butler Yeats

Fed: “economic activity is leveling out”. Does that sound mildly bullish? It doesn’t seem bearish. In addition to that pronouncement, last week’s Federal Reserve policy statement contained the opinion that inflation will be “subdued for some time” and said that the key interest rate will remain at “exceptionally low levels” for the near future. In another hopeful sign, it said it would end its emergency program to buy $300 billion worth of Treasuries in October.¹

Surprise drop in confidence. Consumer confidence, that is. The August Reuters/University of Michigan consumer sentiment survey came in at 63.2, down from 66.0 in July and way below the 69.0 forecast by economists polled by MarketWatch. The August number is the lowest since March.²

Friday reports raise hopes. Countering the consumer sentiment figures, we got better news at the end of last week. Industrial output rose 0.5% for July – the first increase in nine months. Consumer prices did not rise – the Consumer Price Index was flat for July, after gaining 0.7% in June. Consumer prices were down 2.1% from 2008 levels.^3,4

Gold & oil wrap up week with losses. Oil futures settled at $67.51 on the NYMEX Friday, dropping $3.01 for the day. Gold ended the week with a $7.80 drop, closing at $948.70 per ounce.³

Retail sales retreat. They declined mildly for July, with Commerce Department data showing a 0.1% drop. Economists polled by Bloomberg News had expected a gain of 0.8%, mirroring the gain in June.⁵

4-week winning streak ends. Stocks had their first down week since mid-July, with the S&P 500 declining 0.63% last week to close at 1,004.09 Friday. The NASDAQ ended the week at 1,985.52, after a 0.74% weekly loss. The DJIA fell 0.52% to close at 9,321.40 Friday.⁶

(Source: CNNMoney.com, ustreas.gov, bls.gov, 8/14/09)^7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Riddle of the week. Name six or more things that you can wear on your feet starting with the letter S.

Contact my office or see next week’s Update for the answer.

Last week’s riddle answer: Niagara Falls (the rim is worn down about 2.5′ each year due to the millions of gallons of water that rush over it every minute).

Disclosure:
These views are those of Peter Montoya Inc., and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice. 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. 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. The 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Citations.
1 nytimes.com/2009/08/13/business/economy/13fed.html?_r=1  [8/13/09]
2 marketwatch.com/story/us-consumer-sentiment-falls-in-august-2009-08-14         [8/14/09]
3 money.cnn.com/2009/08/14/markets/markets_newyork/?postversion=2009081416             [8/14/09]
4 washingtonpost.com/wp-dyn/content/story/2009/08/14/ST2009081401461.html   [8/14/09]
5 bloomberg.com/apps/news?pid=20601087&sid=amvAwCQ9WEdA          [8/14/09]
6 cnbc.com/id/32415689                      [8/14/09]
7 money.cnn.com/data/markets/dow/               [8/14/09]
7 money.cnn.com/data/markets/nasdaq/         [8/14/09]
7 money.cnn.com/data/markets/sandp/?         [8/14/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F14%2F08&mode=add&symb=DJIA                                [8/14/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F13%2F04&mode=add&symb=DJIA [8/14/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F13%2F99&mode=add&symb=DJIA [8/14/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F14%2F08&mode=add&symb=COMP              [8/14/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F13%2F04&mode=add&symb=COMP              [8/14/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F13%2F99&mode=add&symb=COMP               [8/14/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F14%2F08&mode=add&symb=SPX                  [8/14/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F13%2F04&mode=add&symb=SPX                  [8/14/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=8%2F13%2F99&mode=add&symb=SPX                  [8/14/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml    [8/14/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [8/14/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield_historical_1999.shtml [8/14/09]
9 bls.gov/news.release/history/cpi_08171999.txt            [9/15/99]