SUBDUED INFLATION IN APRIL
Consumer and producer prices retreated last month. The federal government’s Consumer Price Index fell 0.4%, a monthly descent unseen since December 2008; the Producer Price Index declined 0.7%, its biggest monthly drop in three years. Consumer prices also fell for a second straight month; the last time that happened was in late 2008. The core CPI did rise 0.1% in April; the yearly gain in the overall CPI was just 1.1%.1
THREE MORE POSITIVE SIGNS FOR THE ECONOMY
The University of Michigan’s initial May consumer sentiment survey came in at 83.7 – its highest level since July 2007, 7.3 points above the final April mark. After falling 0.2% for March, the Conference Board’s index of U.S. leading indicators rose 0.6% for April. Census Bureau data showed retail sales ticking up 0.1% in April and 3.7% in the past year.2,3
HOUSING STARTS PLUNGE, BUILDING PERMITS SOAR
While the year-over-year increase was 13.1%, housing starts plummeted 16.5% in April, largely due to a 37.8% drop in apartment starts. On the other hand, last month brought a 14.3% rise in building permits … marked by a 40.6% jump in permits for apartment construction.4
BULLS KEEP RUNNING
The S&P 500 is now on a 4-week winning streak. It rose another 1.98% last week to settle at 1,666.12 Friday. Complementing that 5-day gain, the NASDAQ went +1.82% last week while the DJIA went +1.56%; at Friday’s closing bell, the NASDAQ settled at 3,498.97 and the Dow at 15,354.40. A truly impressive factoid: the NASDAQ and S&P have gained 1% or more in each of the past four weeks.5
THIS WEEK: Monday brings earnings from Campbell Soup, TiVo and Urban Outfitters. On Tuesday, Best Buy, Home Depot, Medtronic, Vodafone, Saks, TJX and NetApp announce quarterly results. Wednesday, NAR releases its report on April existing home sales, the Federal Reserve releases the May 1 FOMC minutes, and Fed chairman Ben Bernanke testifies before Congress; Staples, L Brands, PetSmart, Toll Brothers, Target, Lowe’s and Hewlett-Packard post earnings. The Census Bureau report on April new home sales appears Thursday, along with the March FHFA housing price index and earnings from Dollar Tree, Gamestop, Ralph Lauren, Sears Holdings, Gap, Ross Stores, Aeropostale and Pandora. Friday offers the April durable goods orders report and Q1 results from Abercrombie & Fitch.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +17.17 +23.40 +3.65 +7.69
NASDAQ +15.88 +24.36 +7.67 +12.74
S&P 500 +16.82 +27.69 +3.38 +7.64
REAL YIELD 5/17 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.31% -0.35% 1.41% 1.84%
Sources: cnbc.com, bigcharts.com, treasury.gov – 5/17/135,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
WEEKLY QUOTE
“How wonderful it is that nobody need wait a single moment before starting to improve the world.”
– Anne Frank
WEEKLY TIP
Set aside a half-hour to organize your financial documents. It makes sense for tax season, and it makes sense all year.
WEEKLY RIDDLE
What should the next number be in this series: 103, 107, 109, 113, 127 …
Last week’s riddle:
I can’t be captured or held, and I certainly am not seen … yet I can occasionally be heard, and I am often all around you. What am I?
Last week’s answer:
The wind.
Citations.
1 – businessweek.com/news/2013-05-16/consumer-prices-in-u-dot-s-dot-dropped-more-than-forecast-in-april [5/16/13]
2 – bloomberg.com/news/2013-05-17/u-s-stock-futures-rise-before-leading-indicators-data.html [5/17/13]
3 – census.gov/retail/marts/www/marts_current.pdf [5/13/13]
4 – latimes.com/business/money/la-fi-mo-housing-starts-construction-building-permits-economy-20130516,0,7678305.story [5/16/13]
5 – cnbc.com/id/100746158 [5/17/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F17%2F12&x=0&y=0 [5/17/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F17%2F12&x=0&y=0 [5/17/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F17%2F12&x=0&y=0 [5/17/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F16%2F08&x=0&y=0 [5/17/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F16%2F08&x=0&y=0 [5/17/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F16%2F08&x=0&y=0 [5/17/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F16%2F03&x=0&y=0 [5/17/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F16%2F03&x=0&y=0 [5/17/13]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F16%2F03&x=0&y=0 [5/17/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/17/13]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/17/13]
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.
