WALL STREET FINDS THE POSITIVE IN THE NEGATIVE
Moody’s Investors Service downgraded 15 major banks late last week, yet financial stocks rallied Friday – Wall Street was bracing for deeper cuts. Investors also liked a new accord in Europe – Germany joined France, Italy and Spain in support of a €130 billion stimulus plan to help EU economies in the face of coming austerity cuts. It could be approved at this week’s EU summit. Even with last Thursday’s Dow dive of more than 250 points, the DJIA is up about 2% for June.1
EXISTING HOME SALES FALL 1.5% in MAY
In the view of the National Association of Realtors, a lack of cheap inventory was behind the downturn. The sales pace in May was still 9.6% better than a year ago with the median price up 7.9% year-over-year to $182,600, a 2-year high. May housing starts fell to 708,000, down from April’s 744,000; building permits rose to 780,000 in May compared to April’s 723,000.2,3
LEADING INDICATORS BOUNCE BACK
The Conference Board’s June index of leading economic indicators rose 0.3% to 95.8, inching closer to the initial “normal” score of 100.0 that it was established with in 2004. The LEI was up 0.2% in March and down 0.1% in April.4
A VOLATILE WEEK TAKES DOW DOWN 1%
The DJIA lost 0.99%, to be precise; Friday, it settled at 12,640.78. The S&P 500 lost 0.58% for the week, closing Friday at 1,335.02. The NASDAQ pulled off a 0.68% weekly gain to get to 2,892.42. Oil dove 5.08% last week on the NYMEX to $79.76 a barrel; gold retreated 3.76% on the COMEX to $1,566.90 an ounce. Gas prices also fell slightly: AAA’s survey fell to $3.45 a gallon last week.1,5
THIS WEEK: A Supreme Court ruling on the Obama administration’s health care reforms could come as early as today … or later this week. Monday will bring the May new home sales report. Tuesday, the April Case-Shiller Home Price Index and the Conference Board’s June consumer confidence survey appear plus earnings from H&R Block and CKE Restaurants. Earnings from Monsanto, Lennar and General Mills complement Wednesday’s releases on May durable goods orders and May pending home sales. Thursday, EU leaders meet for another summit on the debt crisis; also, the final read on Q1 GDP comes out along with new weekly jobless claims figures and earnings from Accenture, RiM, Family Dollar and Nike. Friday, May consumer spending data and June’s final University of Michigan consumer sentiment survey arrive plus earnings from KB Home and Constellation Brands.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +3.46 +4.39 -1.08 +3.66
NASDAQ +11.03 +8.36 +2.34 +10.07
S&P 500 +6.16 +3.72 -2.23 +3.50
REAL YIELD 6/22 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.42% 0.82% 2.70% 3.48%
Sources: money.msn.com, bigcharts.com, treasury.gov, treasurydirect.gov – 6/22/121,6,7,8 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
“If you spend too much time thinking about a thing, you’ll never get it done.”
– Bruce Lee
While scholarships are offered to students, no one offers a scholarship for retirement. Put your own retirement planning before any college planning (or risk moving in with your kids someday).
It can be told and made, and cracked and played – and yet, it is only spoken. What is it?
Last week’s riddle:
I can’t walk, but at times I run and I am very difficult to hide. I am always with you. What am I?
Last week’s answer:
1 – money.msn.com/market-news/post.aspx?post=95f998bd-6fbe-4de1-9b51-8cb1f437973a [6/22/12]
2 – articles.marketwatch.com/2012-06-21/economy/32343033_1_median-prices-prices-surge-home-sales [6/21/12]
3 – briefing.com/investor/calendars/economic/2012/06/18-22 [6/22/12]
4 – www.conference-board.org/data/bcicountry.cfm?cid=1 [6/21/12]
5 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [6/22/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F22%2F11&x=0&y=0 [6/22/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F22%2F11&x=0&y=0 [6/22/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F22%2F11&x=0&y=0 [6/22/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F22%2F07&x=0&y=0 [6/22/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F22%2F07&x=0&y=0 [6/22/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F22%2F07&x=0&y=0 [6/22/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F21%2F02&x=0&y=0 [6/22/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F21%2F02&x=0&y=0 [6/22/12]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F21%2F02&x=0&y=0 [6/22/12]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/22/12]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/22/12]
8 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]
This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. 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. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. 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. 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 assistance is needed, the reader is advised to engage the services of a competent professional. This material was prepared by MarketingLibrary.Net Inc., for Stonecreek Wealth Advisors, Inc. an independent fee only registered investment advisor firm. Salt Lake City, Provo, Utah. Mark Lund is the author of The Effective Investor.