Economic Update for February 27, 2012

Presented by Mark Lund, Investor Coach.

“Love is the master key that opens the gates of happiness.”
– Oliver Wendell Holmes

OIL APProaches $110 PER BARREL
As NYMEX crude futures settled at $109.77 Friday, economists wondered how the U.S. consumer might cope if $5 gas became a reality. Spurred by supply concerns and heightened tensions over Iran’s nuclear program, crude had its best week in three months: futures gained $6.17 (5.96%) across five trading days. Retail gas prices finished last week at $3.65 per gallon, a high unseen since last June.1,2

Existing home sales were up again in January – the National Association of Realtors reported a 4.3% monthly increase. Seasonally adjusted, sales have risen 8% since August. New home sales (a smaller portion of the residential real estate market) declined 0.9% in January, but largely as an effect of the Commerce Department revising December sales figures upward. Without those revisions, the indicator would have been strongly in the plus column. Last month, the new home inventory decreased to the lowest level since January 2006.3

The final Thomson Reuters/University of Michigan consumer sentiment survey for February came in at 75.3 last week – a 12-month peak, and just a bit north of the 75.0 reading at the end of January. Economists polled by had projected a final February mark of 73.0.3,4

THIS WEEK: A new NAR pending home sales index comes out Monday, along with earnings from Lowe’s, HSBC and Priceline. Tuesday, we have the February Conference Board consumer confidence poll, the December S&P/Case-Shiller home price index and data on January durable goods orders plus earnings reports from Office Depot and DreamWorks. Wednesday offers the second estimate of Q4 GDP, a new Federal Reserve Beige Book and quarterly results from Staples and Costco. Thursday is just as big as Tuesday, with the January consumer spending figures coming out along with ISM’s newest manufacturing index, the latest initial claims report, Commerce Department data on February auto sales and earnings from Wendy’s, Kroger and Big Lots. Friday, nothing major is scheduled.

DJIA +6.26 +7.58 +0.53 +2.84
NASDAQ +13.77 +8.25 +3.58 +6.77
S&P 500 +8.60 +4.57 -1.18 +2.31
10 YR TIPS -0.29% 1.05% 2.30% 3.48%

Sources:,,, – 2/24/122,6,7,8 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

If you want to improve your credit score, an inactive credit card will not help (and it may even hurt). The key factors in credit score determination are recent activity and recent payment history.

Name the three English-language three-letter words that begin and end with the letter E.

Last week’s riddle:
What item binds two people yet touches only one?

Last week’s answer:
A wedding ring.

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