Presented by Mark Lund, Investor Coach.
WEEKLY QUOTE
“The trust of the innocent is the liar’s most useful tool.”
– Stephen King
ACTIONS in GREECE & ITALY CALM MARKETS
Global investors seemed reassured at the end of last week by developments in the European Union. By Friday, Greek prime minister George Papandreou had stepped down; Italian prime minister Silvio Berlusconi’s resignation was at hand. Greek prime minister designate Lucas Papademos and a new coalition government will now be charged with implementing austerity cuts as Greece accepts the EU’s latest €130 billion aid package. Italy’s senate passed new economic reforms at the end of the week aimed at reducing its sovereign debt. Italy’s treasury was also able to sell €5 billion of one-year notes , albeit at 6.09% interest.1,2
A BIG REBOUND IN CONSUMER CONFIDENCE
The preliminary November consumer sentiment index from the University of Michigan was a nice surprise. It came in at 64.2; far better than the final mark of 60.9 for October and the 61.3 consensus forecast of economists polled by Briefing.com. The reading hasn’t been this high since June. The future expectations sub-index improved to 56.2 from the previous 51.8.3
OIL PUSHES TOWARD $100 AGAIN
On Veterans Day, oil futures settled at $98.99 on the NYMEX after a +5.02% week that saw prices rise $3.25 across Thursday and Friday. Gold prices posted a weekly gain as well: the precious metal gained 1.83% on the COMEX for the week, and that brought its 3-week advance to 9.32%.4
STRONG FRIDAY PUTS DOW BACK IN THE BLACK
The DJIA climbed 260 points on Friday after rising 113 points on Thursday, almost offsetting Wednesday’s 389-point descent. That left it at +4.98% YTD. Last week’s performances: DJIA, +1.42% to 12,153.68; S&P 500, +0.85% to 1,263.85; NASDAQ, -0.28% to 2,678.75.5,6,7
THIS WEEK: Key economic releases will be complemented by earnings from the big boxes. Monday, Lowe’s, Urban Outfitters and JCPenney issue 3Q results. On Tuesday, Wal-Mart, Home Depot, Staples, Dell and Beazer Homes come out with earnings, and the October PPI arrives along with October’s retail sales report from the Census Bureau. Wednesday, the October CPI appears along with data on October industrial output; 3Q results roll in from Target and Abercrombie & Fitch. Thursday brings earnings from Ross Stores, Sears, Dollar Tree, GameStop and GAP, the latest initial claims figures and October’s housing starts report. Friday, Heinz announces 3Q results, EU finance ministers meet and the Conference Board offers its October leading indicator index.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +4.98 +7.72 +0.00075 +2.72
NASDAQ +0.98 +4.82 +2.42 +4.56
S&P 500 +0.49 +4.15 -1.70 +1.30
REAL YIELD 11/11 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.04% 0.71% 2.25% 3.50%
Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 11/11/117,8,9,10 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
WEEKLY TIP
Income from stock options and bonuses could put you into a higher tax bracket for 2011. If that is a problem, consider deferring that income until 2012.
WEEKLY RIDDLE
A sudden noise startles a gopher, an owl and a skunk at the edge of a forest. The owl flies off and the gopher retreats into his burrow, but the skunk runs for the trees. How far can that skunk run into the forest?
Last week’s riddle:
What can run but never walks, has a mouth but never eats, has a head but never thinks, and has a bed but never sleeps?
Last week’s answer:
A river.
Citations.
1 – www.cnbc.com/id/45252039/ [11/11/11]
2 – www.cnbc.com/id/45251641/ [11/11/11]
3 – briefing.com/Investor/Calendars/Economic/Releases/mich.htm [11/11/11]
4 – blogs.wsj.com/marketbeat/2011/11/11/data-points-energy-metals-530/ [11/11/11]
5 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [11/11/11]
6 – money.cnn.com/data/markets/dow/ [11/11/11]
7 – www.cnbc.com/id/45255063 [11/11/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F11%2F10&x=0&y=0 [11/11/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F11F2%2F10&x=10&y=18 [11/11/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F11%2F10&x=0&y=0 [11/11/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F10%2F06&x=0&y=0 [11/11/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F10%2F06&x=0&y=0 [11/11/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F10%2F06&x=0&y=0 [11/11/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F12%2F01&x=0&y=0 [11/11/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F12%2F01&x=0&y=0 [11/11/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F12%2F01&x=0&y=0 [11/11/11]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/11/11]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/11/11]
10 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]
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., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. Stonecreek Wealth Advisors, Inc. a fee only registered investment advisor firm in Salt Lake City, Utah, providing wealth management services. Mark Lund is the author of The Effective Investor.
