Weekly Market News for the Week of September 21, 2009

Presented by Mark Lund, The Investor Coach.

Quote of the week. “Laughter is inner jogging.”
– Norman Cousins

Healthy retail sales numbers. While a 10.6% jump in auto sales spurred the 2.7% August leap in this category, retail sales were up 0.6% for the month with cars and gasoline purchases factored out. Sales were still 5.8% below August 2008 levels.1

How tame is inflation now? The Consumer Price Index ascended 0.4% in August, according to the Labor Department, after a flat July. But the real story was year-over-year: CPI fell 1.5% from August 2008 to August 2009, influenced by the huge drop in retail gas prices. Core CPI rose 1.4% over that same period, the smallest rise in more than five years.2

Manufacturing may be recovering. The Federal Reserve announced that industrial output increased for the second straight month in August. The 0.8% gain beat the estimate of economists surveyed by Thomson Reuters, who forecast a 0.6% increase. Producer prices climbed an unexpected 1.7% last month (core PPI rose 0.2%) and business inventories shrank by 1.0% in July.2,3

Housing starts rise 1.5%. The statistic mostly reflects multifamily construction. August apartment starts were up 35.3%; single-family starts fell 3.0%.4

Gold & oil advance. While the dollar came back from multi-month lows against the yen and euro last week, gold hit a new 2009 closing high Wednesday ($1,020.20) and settled at $1,010.30 Friday. Oil futures ended the week at $72.04 per barrel.5

Stocks climb 2% higher. Last week, the economic data stream added credence to the summer rally. The S&P 500 came in at 1,068.30, gaining 2.45% for the week. The DJIA closed at a new 2009 high on Friday: 9,820.20. The NASDAQ finished at 2,132.86 Friday.6

% Change Y-T-D 1-Yr Avg 5-Yr Avg 10-Yr Avg
DJIA +11.89 -10.88 -0.90 -0.91
NASDAQ +35.25 -3.01 +2.33 -2.57
S&P 500 +18.27 -11.46 -1.07 -2.00
Real Yield 9/18 1 Yr Ago 5 Yrs Ago 10 Yrs Ago
10YrTIPS 1.68% 1.94% 1.85% 4.06%

(Source: CNNMoney.com, ustreas.gov, bls.gov, 9/18/09)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. You buy 10 shrubs. How can you plant them in five rows with four in each row?

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

Last week’s riddle: Name three words in everyday English that begin with the letters “dw”.

Last week’s riddle answer: Any three of these five words will do: dwell, dwelling, dwarf, dweeb and dwindle.

1 latimesblogs.latimes.com/money_co/2009/09/todays-government-report-that-retail-sales-rose-27-in-august-looks-unambiguously-good-for-the-recession-is-ending-camp.html [9/15/09]
2 cbsnews.com/stories/2009/09/16/business/main5314853.shtml?tag=contentMain;contentBody [9/16/09]
3 money.cnn.com/2009/09/15/markets/markets_newyork/?postversion=2009091516 [9/15/09]
4 latimes.com/business/la-fi-housing-starts18-2009sep18,0,3163133.story [9/18/09]
5 money.cnn.com/2009/09/18/markets/markets_newyork/index.htm?postversion=2009091817 [9/18/09]
6 cnbc.com/id/32918723 [9/18/09]
7 money.cnn.com/data/markets/dow/ [9/18/09]
7 money.cnn.com/data/markets/nasdaq/ [9/18/09]
7 money.cnn.com/data/markets/sandp/? [9/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F18%2F08&mode=add&symb=DJIA [9/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F17%2F04&mode=add&symb=DJIA [9/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F17%2F99&mode=add&symb=DJIA [9/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F18%2F08&mode=add&symb=COMP [9/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F17%2F04&mode=add&symb=COMP [9/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F17%2F99&mode=add&symb=COMP [9/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F18%2F08&mode=add&symb=SPX [9/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F17%2F04&mode=add&symb=SPX [9/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F17%2F99&mode=add&symb=SPX [9/18/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [9/11/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [9/11/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/yield_historical_1999.shtml [9/18/09]
9 bls.gov/news.release/history/cpi_10191999.txt [10/19/99]

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.