Free Market News for the Week of March 22, 2010

Quote of the week. “No day in which you learn something is a complete loss.”– David Eddings

Inflation? What inflation? Inflationary pressures remain weak in this subdued recovery. The Consumer Price Index was flat in February; core CPI rose 0.1%. CPI only advanced 2.1% over the last 12 months of data. Core CPI rose 1.3% in that period, the smallest year-over-year gain in six years. The Federal Reserve forecasts core CPI advancing 1.2% for all of 2010.^1,2

PPI drops in February. Producer prices decreased by 0.6% last month after a 1.4% rise in January; core PPI advanced 0.1%. Industrial production managed to rise 0.1% even with February’s rough weather.^2,3

Tiny LEI gain. Another 0.1% advance here: the Conference Board’s Leading Economic Index was positive for the eleventh straight month in February.⁴

Snow stalls housing starts. They fell 5.9% last month, according to the Commerce Department. Yet February housing starts and building permits were respectively 0.2% and 11.3% above year-ago levels.⁵

Oil drops, gold gains. Oil futures fell 0.69% across last week to close at $80.68 a barrel on the NYMEX Friday. Gold, however, gained $5.90 last week; even with a $20.00 drop Friday, it ended the five-day stretch at $1,107.40.⁶

Eight-day win streak for the Dow. That streak – the longest since August – helped the index rise 1.10% across last week to 10,741.98. Looking at the other two marquee indices, the S&P 500 gained 0.86% last week while the NASDAQ rose 0.29%.⁷

(Source: CNBC.com, CNNMoney.com, ustreas.gov, bls.gov, 3/19/10)^7,8,9,10
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. Is there a number made of eleven tens of thousands, eleven thousands, eleven hundreds and eleven units? If so, what is it?

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

Last week’s riddle: Three light switches are in the “off” position. Each connects to a light bulb in an adjoining room that you cannot see into. You can freely switch the light bulbs on and off, but you can only go into the adjoining room once to check on the state of the bulbs. Is it possible to tell which switch controls which bulb?

Last week’s riddle answer: Yes. Leave switch A on for several minutes, then switch it off and turn on switch B before entering the next room. The lit bulb correlates with switch B, the dark cool bulb with switch C, and the dark but still-warm bulb with switch A.

Citations.
1 marketwatch.com/story/story/print?guid=A37FB003-34F9-41A5-83B4-823778033C51 [3/18/10]
2 businessweek.com/news/2010-03-17/producer-prices-in-u-s-dropped-more-than-forecast-update1-.html [3/17/10]
3 marketwatch.com/story/us-feb-industrial-output-up-01-despite-snow-2010-03-15?reflink=MW_news_stmp [3/15/10]
4 dailyfinance.com/story/leading-economic-indicators-rose-again-in-february/19404951/ [3/18/10]
5 latimesblogs.latimes.com/money_co/2010/03/housing-starts-fell-5-point-9-percent-in-february.html [3/19/10]
6 blogs.wsj.com/marketbeat/2010/03/19/data-points-energy-metals-244/ [3/19/10]
7 cnbc.com/id/35952832 [3/19/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=3%2F19%2F09&mode=add&symb=DJIA [3/19/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=3%2F18%2F05&mode=add&symb=DJIA [3/19/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=3%2F20%2F00&mode=add&symb=DJIA [3/19/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=3%2F19%2F09&mode=add&symb=COMP [3/19/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=3%2F18%2F05&mode=add&symb=COMP [3/19/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=3%2F20%2F00&mode=add&symb=COMP [3/19/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=3%2F19%2F09&mode=add&symb=SPX [3/19/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=3%2F18%2F05&mode=add&symb=SPX [3/19/10]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=3%2F20%2F00&mode=add&symb=SPX [3/19/10]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [3/19/10]
9 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [3/19/10]
10 treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]

These views are those of Peter Montoya Inc., and not the presenting 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.