CONSUMERS UPBEAT IN MAY, SPEND LESS IN APRIL
Consumer spending slipped 0.2% in April, with a 4.4% drop in purchases of gas, electricity and other energy goods and services being a major influence. In better news, the Commerce Department noted a 3.4% rise in personal spending in Q1, and the two most-watched consumer confidence gauges beat consensus forecasts last week. The Conference Board’s May survey came in at 76.2, topping the 72.5 projected by analysts polled by Briefing.com. The final May consumer sentiment survey from the University of Michigan rose to 84.5; the same group of forecasters had projected it at 82.5.1,2
HOME PRICES GAIN NEARLY 11% IN A YEAR
To be precise, 10.9%: that was the 12-month improvement across 20 cities noted in the March edition of the S&P/Case-Shiller Home Price Index. In other housing news, the National Association of Realtors announced a 1.5% rise in pending home sales for April, bringing the annualized gain to 7.0%.3
AN UPDATE ON MEDICARE’S LONG-TERM HEALTH
Last week saw the release of the 2013 Medicare and Social Security trustee reports. While Social Security is still projected for a shortfall in 2033, Medicare’s board now forecasts that the program can run until 2026 without depleting its trust fund, citing projected savings from the Affordable Care Act. That is two years longer than previously projected. Friday, Health & Human Services secretary Kathleen Sebelius said she did not foresee an increase in Medicare Part B premiums in 2014.4
S&P 500 NOTCHES 7-MONTH WINNING STREAK
Even though it sank 1.14% for the week, the broad U.S. benchmark gained 2.08% for May, ending the month at 1,630.74. While the Dow (-1.23% to 15,115.57) and NASDAQ (-0.09% to 3,455.91) didn’t advance last week either, they respectively gained 1.86% and 3.82% last month.5
THIS WEEK: ISM’s May manufacturing PMI arrives Monday, plus Commerce Department figures on May auto sales. Tuesday, Dollar General announces Q1 earnings. Wednesday, ISM’s May service sector index comes out along with the May ADP employment report, a new Federal Reserve Beige Book and data on April factory orders; Q1 results arrive from Hovnanian and VeriFone. On Thursday, the Bank of England and European Central Bank wrap up policy meetings, and the May Challenger job cuts report comes out along with initial unemployment claims data and earnings from Ann and JM Smucker. Friday, the Labor Department releases the May employment report.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +15.35 +21.96 +3.92 +7.08
NASDAQ +14.45 +22.23 +7.40 +11.65
S&P 500 +14.34 +24.45 +3.29 +6.92
REAL YIELD 5/31 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.05% -0.50% 1.58% 1.77%
Sources: cnbc.com, bigcharts.com, treasury.gov – 5/31/135,6,7,8 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
WEEKLY QUOTE
“It is not fair to ask of others what you are unwilling to do yourself.”
– Eleanor Roosevelt
WEEKLY TIP
Remember that a major life event may mean a change in your retirement, tax or estate planning approach.
WEEKLY RIDDLE
There is a word that starts and ends with T, and contains “tea” as well. What word is this?
Last week’s riddle:
Rigid is my spine, my innards are mostly pale, yet I am always ready to tell a tale. What am I?
Last week’s answer:
A book.
Citations.
1 – latimes.com/business/money/la-fi-mo-personal-income-consumer-spending-economy-20130531,0,3433990.story [5/31/13]
2 – briefing.com/investor/calendars/economic/2013/05/27-31 [5/31/13]
3 – foxbusiness.com/news/2013/05/28/case-shiller-us-home-prices-rise-again-in-march/ [5/28/13]
4 – money.usnews.com/money/blogs/the-best-life/2013/05/31/social-security-deficit-outlook-remains-unchanged [5/31/13]
5 – cnbc.com/id/100779852 [5/31/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F31%2F12&x=0&y=0 [5/31/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F31%2F12&x=0&y=0 [5/31/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F31%2F12&x=0&y=0 [5/31/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F30%2F08&x=0&y=0 [5/31/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F30%2F08&x=0&y=0 [5/31/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F30%2F08&x=0&y=0 [5/31/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F30%2F03&x=0&y=0 [5/31/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F30%2F03&x=0&y=0 [5/31/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F30%2F03&x=0&y=0 [5/31/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/31/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/31/13]
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. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 an independent investment advisor, investor coach and author of The Effective Investor. Located in Salt Lake City and Provo Utah.
