Weekly Market News for the Week of November 2, 2009

Presented by Mark Lund, The Investor Coach

Quote of the week. “We do not quit playing because we grow old, we grow old because we quit playing.”– Oliver Wendell Holmes

3Q GDP: +3.5%. The longest economic contraction in America since 1947 ended in the third quarter as federal credits and stimuli encouraged robust growth. (Automobile output represented 1.6% of that growth, according to the Commerce Department.) This was the best quarterly GDP since 3Q 2007.¹

Consumer spending dips 0.6%. September’s slip appears partly a result of the end of the C.A.R.S. program. “Real” disposable income (after-tax income) fell 0.1% in September. However, durable goods orders rose 1.0% in that month.^2,3

Slight rise in consumer sentiment. Last week, the Reuters/University of Michigan index improved from 69.4 to 70.6 for October. Yet that still meant a drop from the 73.5 reading for September.⁴

New home sales down 3.6%. Why the drop? Here’s a hint: most sales contracts signed in September will likely close after the end of November (and the expiration of the federal $8,000 first-time buyer credit). A Congressional vote to extend that credit could occur early this week.^5,6

Strong month for some hard assets. Despite losses last week, gold prices rose 3.14% in October – an ounce went for $1,039.70 at Friday’s NYMEX close. Copper gained 4.93% last month (it hasn’t had a down month in 2009). Oil prices ended October at precisely $77.00 a barrel – up 9.05% for the month.⁷

Week ends with profit-taking. Concerns over personal spending, commercial real estate and a spike in the dollar index weighed heavily on stocks at October’s end. While the S&P 500 and NASDAQ had their toughest months since February, the DJIA managed a flat month (+0.005%, to be precise).⁸

(Source: CNNMoney.com, ustreas.gov, bls.gov, 10/30/09)^9,10,11

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. What is the only planet within our solar system that rotates clockwise?

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

Last week’s riddle: The names of two U.S. state capital cities rhyme but share no vowels. Name the two cities.

Last week’s riddle answer: Austin and Boston.

Citations.

1 thestreet.com/story/10618752/1/gdp-stunner-35-growth-in-third-quarter.html?cm_ven=GOOGLEN [10/29/09]
2 marketwatch.com/story/consumer-spending-retreats-after-clunkers-ends-2009-10-30 [11/2/09]
3 latimes.com/business/la-fi-briefs29-2009oct29,0,456350.story [10/29/09]
4 marketwatch.com/story/consumer-sentiment-improves-in-late-oct-umich-2009-10-30 [10/30/09]
5 bloomberg.com/apps/news?pid=20601068&sid=aPXIvh4rYY60 [10/28/09]
6 bloomberg.com/apps/news?pid=20601103&sid=aPL7V1Mv60mU [10/30/09]
7 blogs.wsj.com/marketbeat/2009/10/30/data-points-energy-metals-155/ [10/30/09]
8 blogs.wsj.com/marketbeat/2009/10/30/data-points-us-markets-138/tab/print/ [10/30/09]
9 money.cnn.com/data/markets/dow/ [10/30/09]
9 money.cnn.com/data/markets/nasdaq/ [10/30/09]
9 money.cnn.com/data/markets/sandp/? [10/30/09]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=10%2F30%2F08&mode=add&symb=DJIA [10/30/09]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=10%2F29%2F04&mode=add&symb=DJIA [10/30/09]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=10%2F29%2F99&mode=add&symb=DJIA [10/30/09]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=10%2F30%2F08&mode=add&symb=COMP [10/30/09]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=10%2F29%2F04&mode=add&symb=COMP [10/30/09]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=10%2F29%2F99&mode=add&symb=COMP [10/30/09]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=10%2F30%2F08&mode=add&symb=SPX [10/30/09]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=10%2F29%2F04&mode=add&symb=SPX [10/30/09]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=10%2F29%2F99&mode=add&symb=SPX [10/30/09]
10 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [10/30/09]
10 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [10/30/09]
11 treasurydirect.gov/instit/annceresult/press/preanre/1999/ofn100699.pdf [10/6/99]

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.