Weekly Market News for the Week of December 28, 2009

Presented by Mark Lund, The Investor Coach.

Quote of the week. “Wise men make more opportunities than they find.”– Sir Francis Bacon

Another strong consumer spending gain. The Commerce Department announced consumer spending rose 0.5% in November, following a 0.6% increase in October. Personal incomes rose in November by the most in six months.1

Hashing out the home sales data. New home sales fell 11.3% last month, undoubtedly affected by the perception that the first-time buyer credit would expire. Existing home sales soared by 7.4% as buyers scrambled to meet the possible deadline. The median price for an existing home was $172,600 last month compared to $217,400 for a new one – that certainly also helped residential resales.2,3

Health care reform clears Senate. On Christmas Eve, Senate Democrats got the 60 votes needed to pass that chamber’s version of a historic health care reform bill. The House and Senate will work to reconcile their respective bills next month.4

Mortgage rates edge above 5%. Freddie Mac has average rates on 30-year FRMs at 5.05% in its latest survey. Over the weekend, its deputy chief economist Amy Crews Cutts told the Washington Post that “anything we get at or below 5% is a gift at this point.” She thinks rates will hit 6% by the end of 2010.5

Catching up with gold & oil. Last Thursday, gold posted a gain of $10.80 to reach $1,104.80 per ounce. With the dollar strengthening, gold prices fell about $123 during December 3-24. Oil prices ended the week at $78.05, rising about 5% in 3.5 market days.6

Lower volumes, higher stocks. Santa Claus dropped by Wall Street – the Dow ascended almost 2% to end a relatively quiet week at 10,520.10. The NASDAQ closed at 2,285.69 Thursday; the S&P 500 closed at 1,126.48.7

% Change

Y-T-D

1-Yr Chg

5-Yr Avg

10-Yr Avg

DJIA

+19.87

+24.23

-0.57

-0.78

NASDAQ

+44.94

+49.89

+1.16

-4.24

S&P 500

+24.71

+29.76

-1.38

-2.28

Real Yield

12/24

1 Yr Ago

5 Yrs Ago

10 Yrs Ago

10YrTIPS

1.50%

2.07%

1.62%

4.14%


(Source: CNNMoney.com, ustreas.gov, bls.gov, 12/24/09)8,9,10
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 number should be next in this series: 9, 16, 25, 36?

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

Last week’s riddle: Nancy was born in summer, yet she was born in January. How is this possible?

Last week’s riddle answer: She was born in the southern hemisphere, which experiences summer during our winter.

Citations.
1 abcnews.go.com/Business/wireStory?id=9408799 [12/23/09]
2 marketwatch.com/story/new-home-sales-crater-as-subsidy-ends-2009-12-23 [12/23/09]
3 blogs.wsj.com/developments/2009/12/23/why-us-home-sales-are-both-up-and-down/ [12/23/09]
4 cbsnews.com/stories/2009/12/24/politics/main6017779.shtml [12/24/09]
5 washingtonpost.com/wp-dyn/content/article/2009/12/26/AR2009122600031.html [12/26/09]
6 abcnews.go.com/Business/wireStory?id=9419535 [12/24/09]
7 cnbc.com/id/34584961 [12/24/09]
8 money.cnn.com/data/markets/dow/ [12/24/09]
8 money.cnn.com/data/markets/nasdaq/ [12/24/09]
8 money.cnn.com/data/markets/sandp/? [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F08&mode=add&symb=DJIA [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F04&mode=add&symb=DJIA [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F99&mode=add&symb=DJIA [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F18%2F08&mode=add&symb=COMP [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F04&mode=add&symb=COMP [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F99&mode=add&symb=COMP [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F08&mode=add&symb=SPX [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F04&mode=add&symb=SPX [12/24/09]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=12%2F24%2F99&mode=add&symb=SPX [12/24/09]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [12/24/09]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [12/24/09]
10 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.

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