HOW OPTIMISTIC ARE CONSUMERS?
No firm conclusion can be drawn from May’s major consumer economic polls. The Conference Board’s consumer confidence index rose 1.3 points to 83.0. That was its second-best reading in the past six years. The University of Michigan’s final May consumer sentiment index dipped to 81.9 from April’s reading of 84.1. Fresh Commerce Department data also sent mixed signals. Consumer spending contracted 0.1% in April even as consumer incomes rose 0.3%.1,2
PENDING HOME SALES IMPROVE AGAIN
They rose 0.4% for April, the National Association of Realtors said; this follows a 3.4% March increase. March’s S&P/Case-Shiller home price index showed an overall 12.4% annualized gain in house prices – quite good, but down appreciably from the 12.9% yearly advance recorded in the February edition.2
Q1 GDP REVISED DOWN; BETTER NEWS FOR DURABLES
Reviewing declines in exports, business investment and business stockpiles, the Commerce Department said Thursday that the economy actually shrank 1.0% in the first quarter even with a 3.1% advance in personal spending. April’s durable goods orders surprised to the upside, however – they were up 0.8%. Economists polled by MarketWatch had forecast they would retreat 0.8%.2,3
WHO SOLD IN MAY?
There was no exodus from stocks last month. May saw a 2.10% gain for the S&P 500. In an abbreviated trading week, the S&P rose 1.20% to settle at 1,923.57 Friday; the Dow (+0.67% to 16,717.17) and the Nasdaq (+1.36% to 4,242.62) also advanced.4,5,6
THIS WEEK: On Monday, ISM’s May manufacturing PMI arrives plus earnings announcements from Quiksilver and Krispy Kreme. Tuesday brings the Commerce Department’s report on May auto sales and the Census Bureau’s report on April factory orders. Wall Street interprets the May ISM service sector index and the May ADP job change report Wednesday, plus a new Federal Reserve Beige Book and Q2 results from Hovnanian. May’s Challenger job cuts report appears Thursday along with earnings from J.M. Smucker and VeriFone and the latest initial claims numbers. The first Friday of June brings the Labor Department’s May employment report.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +0.85 +9.09 +19.33 +6.39
NASDAQ +1.58 +21.52 +27.82 +11.31
S&P 500 +4.07 +16.27 +21.86 +7.16
REAL YIELD 5/30 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.26% -0.05% 1.67% 1.97%
Sources: USATODAY.com, bigcharts.com, treasury.gov – 5/30/146,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
WEEKLY QUOTE
“You’ve got to take the bitter with the sour.”
– Samuel Goldwyn
WEEKLY TIP
Before you go shopping, draw the line at how much you will spend and resolve not to cross it.
WEEKLY RIDDLE
What can go down a chimney when it is down, but can’t go up through a chimney when it is up?
Last week’s riddle:
What always shows up in the middle of March and the middle of April?
Last week’s answer:
The letter R.
Citations.
1 – stltoday.com/business/local/consumer-sentiment-falls-more-than-forecast-in-may/article_63c11168-f904-5c91-872f-fafeebd1dc79.html [5/30/14]
2 – marketwatch.com/economy-politics/calendars/economic [5/30/14]
3 – finance.fortune.cnn.com/2014/05/29/gdp-drop-revision/ [5/29/14]
4 – google.com/finance?q=INDEXSP%3A.INX&ei=NvCIU7CEI_DLiQLzvID4Dw [5/30/14]
5 – google.com/finance?q=INDEXSP%3A.INX&ei=_PmIU9GyHuO8iwKloYF4 [5/30/14]
6 – usatoday.com/money/markets/overview/ [5/30/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F30%2F13&x=0&y=0 [5/30/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F30%2F13&x=0&y=0 [5/30/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F30%2F13&x=0&y=0 [5/30/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F29%2F09&x=0&y=0 [5/30/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F29%2F09&x=0&y=0 [5/30/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F29%2F09&x=0&y=0 [5/30/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F1%2F04&x=0&y=0 [5/30/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F1%2F04&x=0&y=0 [5/30/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F1%2F04&x=0&y=0 [5/30/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/30/14]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/30/14]
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 Mark Lund, The 401k Advisor, Investor Coach and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. an independent, fee-only, Registered Investment Advisor firm providing 401k consulting for small businesses and private investment management services for professional athletes and select individuals. Stonecreek is located in Salt Lake City, Murray, West Jordan, Sandy, Draper, South Jordan, Provo, Orem, Lehi, Highland, Alpine, American Fork all in Utah.
