Presented by Mark Lund, The Investor Coach.
Quote of the week. “Friendship marks a life even more deeply than love.”– Elie Wiesel
Interesting inflation figures. November data shows a 1.8% year-over-year gain in the Consumer Price Index. That’s the first positive 12-month change since February 2009. Core CPI was flat last month; it had risen for 10 straight months. The overall CPI rose 0.4% in November. Wholesale inflation (PPI) jumped by 1.8% last month, with core PPI rising 0.5%.1
Housing starts rebound. They hit a 6-month low in October, so November’s 8.9% increase was especially welcome. Building permits also increased by 6.0% from October levels.2
Fed sees no reason to raise rates. Last week, TIME’s Person of the Year and his colleagues voted 10-0 to leave the benchmark interest rate alone at between 0% and 0.25%. The Federal Open Market Committee said that the key rate would remain at record lows for “an extended period” as “economic activity is likely to remain weak for a time.”3
Citi, Wells Fargo will pay back Uncle Sam. The two banks will respectively repay $20 million and $25 million to the Treasury. With the Wells Fargo notice, America’s largest banks have all now pledged to exit TARP. The Obama administration claims the final TARP price tag will be under $140 billion.4
Leading indicators up 0.9%. For the eighth month in a row, the Conference Board’s index of leading indicators chalked up an advance. Economists polled by Bloomberg News had predicted a 0.7% rise.5
Tech stocks do well in mixed week. The NASDAQ rose 0.98% last week, pushing its YTD gain over 40%. The S&P 500 slipped 0.35% last week, while the DJIA fell 1.33%.6
% Change |
Y-T-D |
1-Yr Chg |
5-Yr Avg |
10-Yr Avg |
DJIA |
+17.69 |
+20.03 |
-0.60 |
-0.82 |
NASDAQ |
+40.24 |
+42.47 |
+0.72 |
-4.11 |
S&P 500 |
+22.06 |
+24.53 |
-1.54 |
-2.24 |
Real Yield |
12/18 |
1 Yr Ago |
5 Yrs Ago |
10 Yrs Ago |
10YrTIPS |
1.31% |
1.85% |
1.64% |
4.14% |
(Source: CNNMoney.com, ustreas.gov, bls.gov, 12/18/09)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. Nancy was born in summer, yet she was born in January. How is this possible?
Contact my office or see next week’s Update for the answer.
Last week’s riddle: You spend 20% of the money in your wallet. Then you spend 20% of what remains in your wallet after that. You spend $72.00 total. How much money did you originally have in your wallet?
Last week’s riddle answer: $200. $200 – $40 = $160, then $160 – $32 = $128.
Citations.
1 marketwatch.com/story/us-consumer-prices-rise-04-in-november-2009-12-16-83900 [12/16/09]
2 money.cnn.com/2009/12/16/real_estate/housing_starts_November/ [12/16/09]
3 chicagotribune.com/business/chi-tc-biz-fed-1216-1217-dec17,0,3451436.story [12/17/09]
4 bloomberg.com/apps/news?pid=20601103&sid=aPQBGLJzpoMw [12/15/09]
5 bloomberg.com/apps/news?pid=20601087&sid=akvvvBaeSYYs&pos=1 [12/17/09]
6 cnbc.com/id/34382988 [12/18/09]
7 money.cnn.com/data/markets/dow/ [12/18/09]
7 money.cnn.com/data/markets/nasdaq/ [12/18/09]
7 money.cnn.com/data/markets/sandp/? [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F18%2F08&mode=add&symb=DJIA [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F04&mode=add&symb=DJIA [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F99&mode=add&symb=DJIA [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F18%2F08&mode=add&symb=COMP [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F04&mode=add&symb=COMP [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F99&mode=add&symb=COMP [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F18%2F08&mode=add&symb=SPX [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F04&mode=add&symb=SPX [12/18/09]
7 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F17%2F99&mode=add&symb=SPX [12/18/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [12/18/09]
8 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [12/18/09]
9 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.