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WEEKLY QUOTE “Life is the art of drawing without an eraser.” – John Gardner WEEKLY TIP Try setting a specific dollar amount as a goal for your emergency savings, rather than just contributing to it here and there as it's convenient. A solid goal may help you stick with steady, ongoing contributions. WEEKLY RIDDLE Before Last week’s riddle: What is placed on a table and cut, but never eaten? Last week’s answer: A deck of cards. | October 25, 2010 FED & CONFERENCE BOARD SEE MODEST GROWTHThe Federal Reserve’s latest Beige Book came out last week, and 8 of the 12 regional Fed banks reported economic expansion in the anecdotal survey covering September and early October. The survey found that while hiring demand “remained limited”, gains in manufacturing and retail spending were occurring in most regions. The Conference Board’s September Leading Indicators Index offered a slightly less encouraging picture – the gauge advanced for a third consecutive month, rising 0.3%, but just 5 of the 10 components of the index posted gains.1,2 HOUSING STARTS RISE SLIGHTLYA nice surprise: Commerce Department data showed a 0.3% advance in housing starts for September. Analysts were not expecting a third straight monthly increase. Is it a sign of stability in the real estate market? Economists hope so, though the pace of housing starts is still very weak in historical terms.3 INDUSTRIAL OUTPUT DISAPPOINTS It had been a year since the Federal Reserve announced a monthly decline in industrial production. There was an unanticipated 0.2% drop in the category for September. Utilities production rose by 1.9%.4 GOLD PULLS BACK, OIL HOLDS STEADYOctober 18-22 was the worst week in three months for the precious metal, which had been heading north toward the $1,400 mark at mid-month. Gold futures fell 3.41% last week, resulting in a $1,324.40 close Friday on the COMEX. Crude oil futures dipped 0.29% last week to settle at $81.69 per barrel on the NYMEX Friday.5 GAINS COMING NEXT WEEK: September existing home sales (Monday), the August Case-Shiller Home Price Index and the Conference Board’s October poll of consumer confidence (Tuesday), September new home sales and durable goods orders (Wednesday), the latest initial and continuing claims (Thursday), and the final October reading on consumer sentiment from the University of Michigan and the first estimate of 3Q GDP (Friday). Plus of course, 3Q earnings reports all week.
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 10/22/106,7,8,9 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. | ||||||||||||||||||||||||||||||
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list. | |||||||||||||||||||||||||||||||
This material was prepared by Citations. 1 – dailyfinance.com/story/the-fed-economy-grew-at-a-modest-pace-in-september/19681630/ [10/20/10] 2 – msnbc.msn.com/id/39777205/ns/business-eye_on_the_economy/ [10/21/10] 3 – marketwatch.com/story/housing-starts-rise-03-to-610000-in-september-2010-10-19 [10/19/10] 4 - thestreet.com/story/10891354/1/industrial-production-drops-in-september.html [10/18/10] 5 - blogs.wsj.com/marketbeat/2010/10/22/data-points-energy-metals-386/ [10/22/10] 6 – cnbc.com/id/39801554 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F22%2F09&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F22%2F09&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F22%2F09&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F21%2F05&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F21%2F05&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F21%2F05&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F23%2F00&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F23%2F00&x=0&y=0 [10/22/10] 7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F23%2F00&x=0&y=0 [10/22/10] 8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [10/22/10] 8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [10/22/10] 9 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00] | |||||||||||||||||||||||||||||||
Tuesday, October 26, 2010
October 25, 2010: FED & CONFERENCE BOARD SEE MODEST GROWTH
Tuesday, October 19, 2010
October 18, 2010: CPI Up Just 0.1%, PPI Advances 0.4%
Chad J. Karl Presents: WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE: “The hardest tumble a man can make is to fall over his own bluff.” – Ambrose Bierce
WEEKLY TIP: Ward off impulse buying with a 30-day list. If you feel like you have to have something, put it on your 30-day list. See if you still have the urge to buy it after 30 days; chances are, you won’t.
WEEKLY RIDDLE: What is placed on a table and cut, but never eaten?
Last week’s riddle: I am a word that signifies a wide natural area – but remove my first letter, and you are left with a word signifying a narrow urban corridor. What word am I?
Last week’s answer: Valley – remove the V and you get “alley”.
October 18, 2010
CPI UP JUST 0.1%, PPI ADVANCES 0.4%: In September, consumer prices barely increased – in fact, the core Consumer Price Index was flat for the second month in a row. According to the Labor Department, core CPI has risen only 0.8% in the last 12 months - core inflation hasn’t been so tame since 1961. With the economy so sluggish, retailers clearly need to keep their prices low to see if they can promote any demand. Producer prices increased for the third straight month, with the core PPI rising 0.1% for September. The core PPI is up 1.6% over the past 12 months, and the overall PPI has advanced 4.0% in that period.1,2
CONSUMER SENTIMENT SLIPS A BIT: October’s preliminary University of Michigan/Reuters consumer sentiment index is in, and it shows a mild decline. Analysts weren’t expecting the index to move south, but it went to 67.9 from the final 68.2 September reading.3
RETAIL SALES UP BY 0.6% FOR SEPTEMBER: On Friday, the Commerce Department reported the second straight monthly advance in the category, after a revised 0.7% gain for August. Sales improved across almost all retail categories – they only weakened at clothing stores.3
BUSINESS INVENTORIES GROW IN AUGUST: Business stockpiles increased by 0.6% in that month, according to the Commerce Department. This follows a 1.1% increase for July. Both of those gains will likely constitute major contributions to 3Q GDP. On the downside, business sales only improved by 0.1%, leaving the inventory-to-sales ratio at 1.27 months.4
WALL STREET RIDES A 2-WEEK WIN STREAK: The Dow, S&P 500 and NASDAQ all advanced last week. The DJIA gained 0.51% for the week to close at 11,062.78 on Friday. The NASDAQ ended last week at 2,468.77 after a 2.78% weekly gain; the S&P 500 wound up at 1,176.19 after a 0.95% weekly advance.5
COMING NEXT WEEK: On Monday, we have a report on September industrial output; on Tuesday, we get data on September housing starts and building permits; on Wednesday, the Federal Reserve’s newest Beige Book comes out; and on Thursday, we receive fresh initial claims numbers and the Conference Board’s leading indicators index for September.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+6.09
+9.94
+1.51
+0.80
NASDAQ
+8.80
+13.60
+3.91
-2.50
S&P 500
+5.48
+7.26
-0.17
-1.44
REAL YIELD
10/15 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.50%
1.50%
1.98%
4.03%
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 10/15/105,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address.We will contact them first and request their permission to add them to our list.
Chad J. Karl is a Registered Representative and Investment Advisor Representative of and offers securities and advisory services through WRP INVESTMENTS, Inc. Member FINRA/SIPC AND REGISTERED INVESTMENT ADVISOR. Securities and advisory activities are supervised from 4407 Belmont Ave., Youngstown, OH 44505 (330)759-2023 Not FDIC insured · May involve loss of principal · No bank guarantee Notice: Any securities services will be provided solely by WRP Investments, Inc. and not by Mid America Bank. Mid America is not a licensed broker-dealer. You will be dealing solely with WRP with respect to any securities services. WRP is not affiliated with Mid America. Any securities offered by WRP are not insured by agency of the U.S. government.
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www.montoyaregistry.com www.petermontoya.com
Citations.
1 – bloomberg.com/news/print/2010-10-15/consumer-prices-in-u-s-rise-0-1-in-september-core-unchanged.html [10/15/10]
2 – foxbusiness.com/markets/2010/10/14/september-producer-prices-rise/ [10/14/10]
3 – bloomberg.com/news/2010-10-15/u-s-consumer-confidence-unexpectedly-decreases-to-67-9-in-michigan-index.html [10/15/10]
4 - reuters.com/article/idUSTRE69E2RQ20101015 [10/15/10]
5 - cnbc.com/id/39690885 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F15%2F09&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F15%2F09&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F15%2F09&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F14%2F05&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F14%2F05&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F14%2F05&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F16%2F00&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F16%2F00&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F16%2F00&x=0&y=0 [10/15/10]
7 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [10/15/10]
7 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [10/15/10]
8 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
WEEKLY QUOTE: “The hardest tumble a man can make is to fall over his own bluff.” – Ambrose Bierce
WEEKLY TIP: Ward off impulse buying with a 30-day list. If you feel like you have to have something, put it on your 30-day list. See if you still have the urge to buy it after 30 days; chances are, you won’t.
WEEKLY RIDDLE: What is placed on a table and cut, but never eaten?
Last week’s riddle: I am a word that signifies a wide natural area – but remove my first letter, and you are left with a word signifying a narrow urban corridor. What word am I?
Last week’s answer: Valley – remove the V and you get “alley”.
October 18, 2010
CPI UP JUST 0.1%, PPI ADVANCES 0.4%: In September, consumer prices barely increased – in fact, the core Consumer Price Index was flat for the second month in a row. According to the Labor Department, core CPI has risen only 0.8% in the last 12 months - core inflation hasn’t been so tame since 1961. With the economy so sluggish, retailers clearly need to keep their prices low to see if they can promote any demand. Producer prices increased for the third straight month, with the core PPI rising 0.1% for September. The core PPI is up 1.6% over the past 12 months, and the overall PPI has advanced 4.0% in that period.1,2
CONSUMER SENTIMENT SLIPS A BIT: October’s preliminary University of Michigan/Reuters consumer sentiment index is in, and it shows a mild decline. Analysts weren’t expecting the index to move south, but it went to 67.9 from the final 68.2 September reading.3
RETAIL SALES UP BY 0.6% FOR SEPTEMBER: On Friday, the Commerce Department reported the second straight monthly advance in the category, after a revised 0.7% gain for August. Sales improved across almost all retail categories – they only weakened at clothing stores.3
BUSINESS INVENTORIES GROW IN AUGUST: Business stockpiles increased by 0.6% in that month, according to the Commerce Department. This follows a 1.1% increase for July. Both of those gains will likely constitute major contributions to 3Q GDP. On the downside, business sales only improved by 0.1%, leaving the inventory-to-sales ratio at 1.27 months.4
WALL STREET RIDES A 2-WEEK WIN STREAK: The Dow, S&P 500 and NASDAQ all advanced last week. The DJIA gained 0.51% for the week to close at 11,062.78 on Friday. The NASDAQ ended last week at 2,468.77 after a 2.78% weekly gain; the S&P 500 wound up at 1,176.19 after a 0.95% weekly advance.5
COMING NEXT WEEK: On Monday, we have a report on September industrial output; on Tuesday, we get data on September housing starts and building permits; on Wednesday, the Federal Reserve’s newest Beige Book comes out; and on Thursday, we receive fresh initial claims numbers and the Conference Board’s leading indicators index for September.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+6.09
+9.94
+1.51
+0.80
NASDAQ
+8.80
+13.60
+3.91
-2.50
S&P 500
+5.48
+7.26
-0.17
-1.44
REAL YIELD
10/15 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.50%
1.50%
1.98%
4.03%
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 10/15/105,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address.We will contact them first and request their permission to add them to our list.
Chad J. Karl is a Registered Representative and Investment Advisor Representative of and offers securities and advisory services through WRP INVESTMENTS, Inc. Member FINRA/SIPC AND REGISTERED INVESTMENT ADVISOR. Securities and advisory activities are supervised from 4407 Belmont Ave., Youngstown, OH 44505 (330)759-2023 Not FDIC insured · May involve loss of principal · No bank guarantee Notice: Any securities services will be provided solely by WRP Investments, Inc. and not by Mid America Bank. Mid America is not a licensed broker-dealer. You will be dealing solely with WRP with respect to any securities services. WRP is not affiliated with Mid America. Any securities offered by WRP are not insured by agency of the U.S. government.
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www.montoyaregistry.com www.petermontoya.com
Citations.
1 – bloomberg.com/news/print/2010-10-15/consumer-prices-in-u-s-rise-0-1-in-september-core-unchanged.html [10/15/10]
2 – foxbusiness.com/markets/2010/10/14/september-producer-prices-rise/ [10/14/10]
3 – bloomberg.com/news/2010-10-15/u-s-consumer-confidence-unexpectedly-decreases-to-67-9-in-michigan-index.html [10/15/10]
4 - reuters.com/article/idUSTRE69E2RQ20101015 [10/15/10]
5 - cnbc.com/id/39690885 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F15%2F09&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F15%2F09&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F15%2F09&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F14%2F05&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F14%2F05&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F14%2F05&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F16%2F00&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F16%2F00&x=0&y=0 [10/15/10]
6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F16%2F00&x=0&y=0 [10/15/10]
7 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [10/15/10]
7 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [10/15/10]
8 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
Friday, October 15, 2010
October 11, 2010: JOBS REPORT COULD PROMPT FED RESPONSE
Chad J. Karl Presents: WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE: “The digital revolution is far more significant than the invention of writing or even of printing.” – Douglas Engelbart
WEEKLY TIP: Update your will. It is just as important as having one. If you drafted a will years ago, the information is likely in need of some adjustments. Be sure to revisit your will often and keep it up to date.
WEEKLY RIDDLE: I am a word that signifies a wide natural area – but remove my first letter, and you are left with a word signifying a narrow urban corridor. What word am I?
Last week’s riddle: Ian bought a bag of apples on Friday and ate a third of them. On Saturday he ate half of the remaining apples. On Sunday he looked in the bag and found that just two were left. How many apples were originally in the bag?
Last week’s answer: Six. He had six apples to start with, and ate two the first day and two the second day.
October 11, 2010
JOBS REPORT COULD PROMPT FED RESPONSE: The U.S. economy shed 95,000 non-farming jobs in September - mostly government jobs, according to the Labor Department. Economists surveyed by MarketWatch thought payrolls would shrink by only 8,000 last month. The unemployment rate held steady at 9.6% as the private sector added 64,000 positions. On Friday, stocks posted gains after the news – economists and investors alike felt the report would spur the Federal Reserve toward further quantitative easing.1
PENDING HOME SALES UP 4.3% FOR AUGUST: The National Association of Realtors reported the second straight monthly advance in this indicator. August pending home sales were still 20.1% below year-ago levels.2
SERVICE SECTOR GROWTH RATE INCREASES: The Institute for Supply Management’s service sector index rose for a ninth straight month, going from 51.8 in August to 53.2 in September. The employment sub-index moved north 2.0 points to 50.2, indicating hiring had increased.3
TWO BIG BANKS HALT FORECLOSURES: Responding to allegations that it may have seized homes using shortcuts and defective documents, Bank of America decided last week to extend its freeze on foreclosures to all 50 states. PNC Financial Services Group also announced last week that it was halting foreclosure sales for one month.4
FACTORY ORDERS HINT AT COMPANIES UPGRADING: In August, orders for non-military capital goods excluding aircraft rose 5.1%. This marks the best month for such orders since March 2010, according to Commerce Department data. Overall capital goods orders declined by 0.5%.5
DOW CLOSES NORTH OF 11,000: The index gained 1.63% last week to settle Friday at 11,006.48 – the first close over 11,000 since May 3. The NASDAQ advanced 1.31% on the week to settle Friday at 2,401.91. The S&P 500 closed at 1,165.13 Friday after a 1.65% weekly gain.6
COMING NEXT WEEK: minutes from the 9/21 FOMC meeting (Tuesday), new jobless claims figures and September PPI (Thursday), and then a plethora of reports to digest on Friday - September CPI, the preliminary October University of Michigan consumer sentiment survey, and new data on retail sales and business inventories.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+5.55
+12.46
+1.39
+0.41
NASDAQ
+5.85
+13.09
+2.98
-2.84
S&P 500
+4.49
+9.35
-0.51
-1.69
REAL YIELD
10/8 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.45%
1.49%
1.90%
4.03%
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 10/8/106,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address.We will contact them first and request their permission to add them to our list.
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www.montoyaregistry.com www.petermontoya.com
Citations.
1 – marketwatch.com/story/us-economy-sheds-95000-jobs-in-sept-2010-10-08?dist=beforebell [10/8/10]
2 – realtor.org/press_room/news_releases/2010/10/pending_show [10/4/10]
3 –ism.ws/ISMReport/nonmfgROB.cfm [10/5/10]
4 - bloomberg.com/news/2010-10-08/bank-of-america-extends-freeze-on-foreclosures-to-all-50-states.html [10/8/10]
5 - bloomberg.com/news/2010-10-04/u-s-capital-goods-orders-climb-more-than-estimated-as-equipment-replaced.html [10/4/10]
6 - cnbc.com/id/39580603 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F8%2F09&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F8%2F09&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F8%2F09&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F7%2F05&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F7%2F05&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F7%2F05&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F9%2F00&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F9%2F00&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F9%2F00&x=0&y=0 [10/8/10]
8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [10/8/10]
8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [10/8/10]
9 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
WEEKLY QUOTE: “The digital revolution is far more significant than the invention of writing or even of printing.” – Douglas Engelbart
WEEKLY TIP: Update your will. It is just as important as having one. If you drafted a will years ago, the information is likely in need of some adjustments. Be sure to revisit your will often and keep it up to date.
WEEKLY RIDDLE: I am a word that signifies a wide natural area – but remove my first letter, and you are left with a word signifying a narrow urban corridor. What word am I?
Last week’s riddle: Ian bought a bag of apples on Friday and ate a third of them. On Saturday he ate half of the remaining apples. On Sunday he looked in the bag and found that just two were left. How many apples were originally in the bag?
Last week’s answer: Six. He had six apples to start with, and ate two the first day and two the second day.
October 11, 2010
JOBS REPORT COULD PROMPT FED RESPONSE: The U.S. economy shed 95,000 non-farming jobs in September - mostly government jobs, according to the Labor Department. Economists surveyed by MarketWatch thought payrolls would shrink by only 8,000 last month. The unemployment rate held steady at 9.6% as the private sector added 64,000 positions. On Friday, stocks posted gains after the news – economists and investors alike felt the report would spur the Federal Reserve toward further quantitative easing.1
PENDING HOME SALES UP 4.3% FOR AUGUST: The National Association of Realtors reported the second straight monthly advance in this indicator. August pending home sales were still 20.1% below year-ago levels.2
SERVICE SECTOR GROWTH RATE INCREASES: The Institute for Supply Management’s service sector index rose for a ninth straight month, going from 51.8 in August to 53.2 in September. The employment sub-index moved north 2.0 points to 50.2, indicating hiring had increased.3
TWO BIG BANKS HALT FORECLOSURES: Responding to allegations that it may have seized homes using shortcuts and defective documents, Bank of America decided last week to extend its freeze on foreclosures to all 50 states. PNC Financial Services Group also announced last week that it was halting foreclosure sales for one month.4
FACTORY ORDERS HINT AT COMPANIES UPGRADING: In August, orders for non-military capital goods excluding aircraft rose 5.1%. This marks the best month for such orders since March 2010, according to Commerce Department data. Overall capital goods orders declined by 0.5%.5
DOW CLOSES NORTH OF 11,000: The index gained 1.63% last week to settle Friday at 11,006.48 – the first close over 11,000 since May 3. The NASDAQ advanced 1.31% on the week to settle Friday at 2,401.91. The S&P 500 closed at 1,165.13 Friday after a 1.65% weekly gain.6
COMING NEXT WEEK: minutes from the 9/21 FOMC meeting (Tuesday), new jobless claims figures and September PPI (Thursday), and then a plethora of reports to digest on Friday - September CPI, the preliminary October University of Michigan consumer sentiment survey, and new data on retail sales and business inventories.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+5.55
+12.46
+1.39
+0.41
NASDAQ
+5.85
+13.09
+2.98
-2.84
S&P 500
+4.49
+9.35
-0.51
-1.69
REAL YIELD
10/8 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.45%
1.49%
1.90%
4.03%
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 10/8/106,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address.We will contact them first and request their permission to add them to our list.
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www.montoyaregistry.com www.petermontoya.com
Citations.
1 – marketwatch.com/story/us-economy-sheds-95000-jobs-in-sept-2010-10-08?dist=beforebell [10/8/10]
2 – realtor.org/press_room/news_releases/2010/10/pending_show [10/4/10]
3 –ism.ws/ISMReport/nonmfgROB.cfm [10/5/10]
4 - bloomberg.com/news/2010-10-08/bank-of-america-extends-freeze-on-foreclosures-to-all-50-states.html [10/8/10]
5 - bloomberg.com/news/2010-10-04/u-s-capital-goods-orders-climb-more-than-estimated-as-equipment-replaced.html [10/4/10]
6 - cnbc.com/id/39580603 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F8%2F09&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F8%2F09&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F8%2F09&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F7%2F05&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F7%2F05&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F7%2F05&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F9%2F00&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F9%2F00&x=0&y=0 [10/8/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F9%2F00&x=0&y=0 [10/8/10]
8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [10/8/10]
8 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [10/8/10]
9 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
Wednesday, October 13, 2010
The Big Rollover: What should you do with that old 401(k)?
THE BIG ROLLOVER: What should you do with that old 401(k)?
by Chad J. Karl
Options, options, options … There are many misconceptions about what must be done with a 401(k) when someone leaves a company. Some people think they have to cash out their 401(k) upon leaving a job. Others think they must “roll it over” into a new 401(k). Still others believe that they must leave the 401(k) where it is. None of these are true … and none are false. These aren’t “musts”, they are options. The big question is, which option is the right option for YOU?
Leaving it where it is … If you have enough money in your current 401(k) to meet the minimum requirement, you could leave your money where it is. Should you? Well, it depends. If you feel the plan has good investment choices and the annual fees are reasonable, leaving your money there to mature could be a good option for you.
Direct rollover into a new 401(k) … If your new employer offers a 401(k), you could choose to “roll” your money into that plan, but then you will be limited to the new plan’s investment options. So should you? Once again, it depends. You’ll want to look into the structure of the new plan, the fees and the investment options.
Moving the money into an IRA rollover account… If managing where your account is held and how it is invested is important to you, this option gives you a great deal of flexibility. It also offers you more distribution options, once you are eligible. Additionally, you could open a brokerage account or purchase a CD, provided the account is titled as your IRA Rollover Account.
Cashing out your 401(k) … The temptation to get a lump sum of money can be too great for some, especially if they have just lost their job or feel that they are in some sort of financial bind. They may choose to cash out their 401(k) upon leaving a job. But what are they giving up? Well, 10% for starters. If they are younger than 59 ½ years old and cash out their 401(k), most of them will incur a 10% penalty. Additionally, they will owe taxes on the amount they cash out. But here’s what really hurts: they are giving up part of their retirement fund or (in many cases) starting over from zero.
Fighting temptation now could lead to big rewards later … For example, let’s say a 35-year-old leaves a job and rolls over $15,000 from a 401(k) into an IRA earning an average of 7% annually, letting the money mature over 30 years … by the time of retirement, that money could potentially grow to over $100,000.
Making a decision … If you’re unsure which choice is best for you, or if you’d like to learn more about your options, I would recommend speaking with a qualified financial advisor. Additionally, you may want to consider working with a tax professional if you own company stock in your previous 401(k). You’re likely to want some assistance in sorting through the IRS rules that may apply.
Chad J. Karl is a Registered Representative and Investment Advisor Representative of and offers securities and advisory services through WRP INVESTMENTS, Inc. Member FINRA/SIPC AND REGISTERED INVESTMENT ADVISOR. Securities and advisory activities are supervised from 4407 Belmont Ave., Youngstown, OH 44505 (330)759-2023 Not FDIC insured · May involve loss of principal · No bank guarantee Notice: Any securities services will be provided solely by WRP Investments, Inc. and not by Mid America Bank. Mid America is not a licensed broker-dealer. You will be dealing solely with WRP with respect to any securities services. WRP is not affiliated with Mid America. Any securities offered by WRP are not insured by agency of the U.S. government.
These views are those of the author and should not be construed as investment advice. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.
by Chad J. Karl
Options, options, options … There are many misconceptions about what must be done with a 401(k) when someone leaves a company. Some people think they have to cash out their 401(k) upon leaving a job. Others think they must “roll it over” into a new 401(k). Still others believe that they must leave the 401(k) where it is. None of these are true … and none are false. These aren’t “musts”, they are options. The big question is, which option is the right option for YOU?
Leaving it where it is … If you have enough money in your current 401(k) to meet the minimum requirement, you could leave your money where it is. Should you? Well, it depends. If you feel the plan has good investment choices and the annual fees are reasonable, leaving your money there to mature could be a good option for you.
Direct rollover into a new 401(k) … If your new employer offers a 401(k), you could choose to “roll” your money into that plan, but then you will be limited to the new plan’s investment options. So should you? Once again, it depends. You’ll want to look into the structure of the new plan, the fees and the investment options.
Moving the money into an IRA rollover account… If managing where your account is held and how it is invested is important to you, this option gives you a great deal of flexibility. It also offers you more distribution options, once you are eligible. Additionally, you could open a brokerage account or purchase a CD, provided the account is titled as your IRA Rollover Account.
Cashing out your 401(k) … The temptation to get a lump sum of money can be too great for some, especially if they have just lost their job or feel that they are in some sort of financial bind. They may choose to cash out their 401(k) upon leaving a job. But what are they giving up? Well, 10% for starters. If they are younger than 59 ½ years old and cash out their 401(k), most of them will incur a 10% penalty. Additionally, they will owe taxes on the amount they cash out. But here’s what really hurts: they are giving up part of their retirement fund or (in many cases) starting over from zero.
Fighting temptation now could lead to big rewards later … For example, let’s say a 35-year-old leaves a job and rolls over $15,000 from a 401(k) into an IRA earning an average of 7% annually, letting the money mature over 30 years … by the time of retirement, that money could potentially grow to over $100,000.
Making a decision … If you’re unsure which choice is best for you, or if you’d like to learn more about your options, I would recommend speaking with a qualified financial advisor. Additionally, you may want to consider working with a tax professional if you own company stock in your previous 401(k). You’re likely to want some assistance in sorting through the IRS rules that may apply.
Chad J. Karl is a Registered Representative and Investment Advisor Representative of and offers securities and advisory services through WRP INVESTMENTS, Inc. Member FINRA/SIPC AND REGISTERED INVESTMENT ADVISOR. Securities and advisory activities are supervised from 4407 Belmont Ave., Youngstown, OH 44505 (330)759-2023 Not FDIC insured · May involve loss of principal · No bank guarantee Notice: Any securities services will be provided solely by WRP Investments, Inc. and not by Mid America Bank. Mid America is not a licensed broker-dealer. You will be dealing solely with WRP with respect to any securities services. WRP is not affiliated with Mid America. Any securities offered by WRP are not insured by agency of the U.S. government.
These views are those of the author and should not be construed as investment advice. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please consult your Financial Advisor for further information.
Wednesday, October 6, 2010
Inflation Matters
Do you remember inflation? Do you remember when inflation was at 5%? Remember when it was in double digits? We’ve had exceptionally low inflation recently, but interest rates can’t stay at rock-bottom lows forever.
At some point, inflation will make a comeback.
As an investor, what do you do when inflation increases?
Are equities the best investment choice during inflationary periods of the market? Quite often, the answer is “no.”
How about bonds? Again – the answer is often “no.”
When inflation rears its head, alternative investments such as private equity funds, real estate investment trusts and commodities may help you diversify your portfolio and manage the effect of inflation on your invested assets.
Interest rates will rise someday, and inflation will return. As you invest, you’ve got to recognize its impact – and you should plan accordingly. Call me at 608-758-2222, or e-mail me at ckarl@chadkarl.com . Let’s talk about some ideas that may help you as inflation returns.
At some point, inflation will make a comeback.
As an investor, what do you do when inflation increases?
Are equities the best investment choice during inflationary periods of the market? Quite often, the answer is “no.”
How about bonds? Again – the answer is often “no.”
When inflation rears its head, alternative investments such as private equity funds, real estate investment trusts and commodities may help you diversify your portfolio and manage the effect of inflation on your invested assets.
Interest rates will rise someday, and inflation will return. As you invest, you’ve got to recognize its impact – and you should plan accordingly. Call me at 608-758-2222, or e-mail me at ckarl@chadkarl.com . Let’s talk about some ideas that may help you as inflation returns.
Let's Talk About Capital Gains
LET’s TALK ABOUT CAPITAL GAINS
In a down market, things are a little different –
and some investors might qualify for a tax break.
provided by Chad J. Karl, Certified Financial PlannerTM Professional
For seasoned investors, the end of the year equals loss-harvesting time. The classic tactic works like this:
You sell some losers to offset some winners, i.e., you sell some securities that are worth less than what you originally paid to counterbalance capital gains you accumulated earlier in the year.
With your net gains at $0, you can then harvest up to another $3,000 of capital losses to offset up to $3,000 worth of ordinary taxable income.
Beyond that, you can carry over additional capital losses to the following tax year.1
Well in 2009, we have a different situation on our hands. You might have little or no capital gains this year. Should you sell your losers even when you don’t have many winners?
Why you might think about selling while the market is down. By taking a bunch of losses this year and carrying over excess losses into 2010, you can potentially shelter some (or maybe even all) of your long-term and short-term gains next year. This means you have the capability to shelter winners you’ve held in your portfolio (even for less than a year) from being taxed at up to 35%.1
Capital gains taxes could soon increase for some investors. As you may have heard, President-elect Barack Obama has stated his desire to increase the long-term capital gains tax rate from 15% to 20%.2 Should you fall into that demographic, you might think of triggering excess capital losses in 2009 and using the losses to shelter future long-term capital gains that could be taxed at a higher rate during the next administration. (But this is still just talk, not a certainty.)
What if your fund actually had capital gains this year? Believe it or not, some funds are producing them. How could that be?
When a big market downturn prompts shareholders to flee a mutual fund, you have a wave of redemptions. How does a fund manager handle that? There are two choices: raise cash or sell assets. This year, the mass of shareholders leaving mutual funds was so large that some fund managers actually had to sell securities in the red on the funds’ books, with capital gains potentially resulting for remaining shareholders.3
If a fund’s net asset value (NAV) has fallen in 2009, it is still possible that securities sold by the fund this year can trigger capital gains, even if your account balance has decreased in value. For example, the fund could have purchased a security three years ago at $8 per share and sold it this year at $13 per share for a $5 capital gain. A fund’s NAV differs from a fund’s cost basis - and your cost basis is not the fund’s cost basis, because you don’t own the actual securities, just shares in the fund.
So it is possible that you could see capital gains in your mutual funds this year. (Talk about adding insult to injury.) Of course, you have the option of liquidating your mutual fund shares before the capital gains distributions occur in December.
With an exchange-traded fund, things are different: when shares are sold, that usually just means a taxable event for the selling investor, not other shareholders. Also, many ETFs perform in-kind redemptions to circumvent year-end capital gains distributions.4
Watch out for the wash sale rule. You can’t sell a security and immediately purchase the position back at a lower price just to realize a capital loss and tax deduction. IRS rules prohibit this – it’s called a “wash sale”. You violate the wash sale rule if you buy a “substantially identical stock” within 30 days of the sale of the original security (that’s before or after such a sale).
But wait, there’s a new wrinkle to the “wash sale” rule this year: Revenue Ruling 2008-5 says you can no longer use an IRA to acquire “substantially identical” securities within the 61-day wash sale window – and you can’t boost your tax basis in said IRA by the amount of the disallowed loss.5
0% capital gains tax for lower-income investors. If you’re in the 10% or 15% federal income tax bracket for 2009, you won’t have to pay capital gains at all. Are you a single filer whose 2009 taxable income will total $32,550 or less? Are you a married couple whose 2009 taxable income will total $65,100 or less? Then you can sell assets that you’ve owned for more than one year during 2009 without paying capital gains taxes on the sale. You get that tax break in 2009 and 2010. Previously, you faced a 5% capital gains tax.6,7
If you sell, just be sure you don’t generate so much additional income that you end up in a higher tax bracket. Taxpayers in the 25-35% tax brackets will pay a 15% capital gains tax rate in 2009 and 2010.7
As you think about short-term moves, keep long-term goals in mind. If history is any guide, this recession will end in the near future, and the market should recover nicely, perhaps even spectacularly. So as you ponder any short-term moves keep an eye on your long-range financial plan and contact me, Chad Karl, at 608-758-2222 to find out how this may fit in with your long term strategies.
In a down market, things are a little different –
and some investors might qualify for a tax break.
provided by Chad J. Karl, Certified Financial PlannerTM Professional
For seasoned investors, the end of the year equals loss-harvesting time. The classic tactic works like this:
You sell some losers to offset some winners, i.e., you sell some securities that are worth less than what you originally paid to counterbalance capital gains you accumulated earlier in the year.
With your net gains at $0, you can then harvest up to another $3,000 of capital losses to offset up to $3,000 worth of ordinary taxable income.
Beyond that, you can carry over additional capital losses to the following tax year.1
Well in 2009, we have a different situation on our hands. You might have little or no capital gains this year. Should you sell your losers even when you don’t have many winners?
Why you might think about selling while the market is down. By taking a bunch of losses this year and carrying over excess losses into 2010, you can potentially shelter some (or maybe even all) of your long-term and short-term gains next year. This means you have the capability to shelter winners you’ve held in your portfolio (even for less than a year) from being taxed at up to 35%.1
Capital gains taxes could soon increase for some investors. As you may have heard, President-elect Barack Obama has stated his desire to increase the long-term capital gains tax rate from 15% to 20%.2 Should you fall into that demographic, you might think of triggering excess capital losses in 2009 and using the losses to shelter future long-term capital gains that could be taxed at a higher rate during the next administration. (But this is still just talk, not a certainty.)
What if your fund actually had capital gains this year? Believe it or not, some funds are producing them. How could that be?
When a big market downturn prompts shareholders to flee a mutual fund, you have a wave of redemptions. How does a fund manager handle that? There are two choices: raise cash or sell assets. This year, the mass of shareholders leaving mutual funds was so large that some fund managers actually had to sell securities in the red on the funds’ books, with capital gains potentially resulting for remaining shareholders.3
If a fund’s net asset value (NAV) has fallen in 2009, it is still possible that securities sold by the fund this year can trigger capital gains, even if your account balance has decreased in value. For example, the fund could have purchased a security three years ago at $8 per share and sold it this year at $13 per share for a $5 capital gain. A fund’s NAV differs from a fund’s cost basis - and your cost basis is not the fund’s cost basis, because you don’t own the actual securities, just shares in the fund.
So it is possible that you could see capital gains in your mutual funds this year. (Talk about adding insult to injury.) Of course, you have the option of liquidating your mutual fund shares before the capital gains distributions occur in December.
With an exchange-traded fund, things are different: when shares are sold, that usually just means a taxable event for the selling investor, not other shareholders. Also, many ETFs perform in-kind redemptions to circumvent year-end capital gains distributions.4
Watch out for the wash sale rule. You can’t sell a security and immediately purchase the position back at a lower price just to realize a capital loss and tax deduction. IRS rules prohibit this – it’s called a “wash sale”. You violate the wash sale rule if you buy a “substantially identical stock” within 30 days of the sale of the original security (that’s before or after such a sale).
But wait, there’s a new wrinkle to the “wash sale” rule this year: Revenue Ruling 2008-5 says you can no longer use an IRA to acquire “substantially identical” securities within the 61-day wash sale window – and you can’t boost your tax basis in said IRA by the amount of the disallowed loss.5
0% capital gains tax for lower-income investors. If you’re in the 10% or 15% federal income tax bracket for 2009, you won’t have to pay capital gains at all. Are you a single filer whose 2009 taxable income will total $32,550 or less? Are you a married couple whose 2009 taxable income will total $65,100 or less? Then you can sell assets that you’ve owned for more than one year during 2009 without paying capital gains taxes on the sale. You get that tax break in 2009 and 2010. Previously, you faced a 5% capital gains tax.6,7
If you sell, just be sure you don’t generate so much additional income that you end up in a higher tax bracket. Taxpayers in the 25-35% tax brackets will pay a 15% capital gains tax rate in 2009 and 2010.7
As you think about short-term moves, keep long-term goals in mind. If history is any guide, this recession will end in the near future, and the market should recover nicely, perhaps even spectacularly. So as you ponder any short-term moves keep an eye on your long-range financial plan and contact me, Chad Karl, at 608-758-2222 to find out how this may fit in with your long term strategies.
Chad J. Karl is a Registered Representative and Investment Advisor Representative of and offers securities and advisory services through WRP INVESTMENTS, Inc. Member FINRA/SIPC AND REGISTERED INVESTMENT ADVISOR. Securities and advisory activities are supervised from 4407 Belmont Ave., Youngstown, OH 44505. (330)759-2023
Not FDIC insured • May involve loss of principal • No bank guarantee
Notice: Any securities services will be provided solely by WRP Investments, Inc. and not by Mid America Bank. Mid America is not a licensed broker-dealer. You will be dealing solely with WRP with respect to any securities services. WRP is not affiliated with Mid America. Any securities offered by WRP are not insured by agency of the U.S. government.
These are the views of Peter Montoya Inc., not the named Representative nor Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.
Citations:
1 smartmoney.com/personal-finance/taxes/a-down-stock-market-offers-tasty-tax-breaks/ [10/29/08]
2 blogs.abcnews.com/politicalradar/2008/08/obama-clarifies.html [8/14/08]
3 smartmoney.com/investing/mutual-funds/some-funds-may-pay-capital-gains-in-2008/ [11/5/08]
4 investors.com/etf/etfEArt02.asp [4/8/08]
5 smartmoney.com/personal-finance/taxes/A-Sneaky-New-Twist-on-the-Wash-Sale-Rules-23611/?page=all [8/6/08]
6 bankrate.com/brm/itax/news/taxguide/review-rates2.asp?caret=7a [1/2/08]
7 usatoday.com/money/perfi/taxes/2007-06-15-mym-capital-gains_N.htm [6/15/07]
Dollar Cost Averaging in a Down Market
DOLLAR COST AVERAGING IN A DOWN MARKET
This investment technique may help you take advantage of the downturn.
Provided by Chad J. Karl, Certified Financial PlannerTM Professional
This investment technique may help you take advantage of the downturn.
Provided by Chad J. Karl, Certified Financial PlannerTM Professional
The central idea: buy low, and sell high. It’s the oldest stock market adage, and in the wake of the recent selloff, dollar cost averaging may give you a method to capture lower prices today and come out ahead tomorrow.
How it works. Dollar cost averaging is a long-term investment strategy. It means investing in small increments. Through scheduled investments of as little as $50 or $100 per month, you buy investment shares over time, as opposed to pouring a big lump sum into the market. The method is often recommended to younger investors with longer time horizons, and investors who don’t yet have great wealth.
Why it is worthwhile in a bear market. First of all, when the market drops, the investor practicing dollar cost averaging isn’t hurt as much as the lump sum investor – as the lump sum investor holds many more shares of the declining fund or stock.
Second, a stock market downturn produces a kind of “clearance sale” environment. Picture Wall Street as a department store, with signs everywhere announcing 20% or 30% off. You have a chance to buy into some top-quality companies “on sale”. As a consequence of dollar cost averaging, you can now buy in at a lower price – and buy more shares for your money.
So what happens when the market recovers? As the market rebounds, you can pat yourself on the back. You were able to buy big at the bottom of the market, and as the market rises, you will have a lower cost basis and you can enjoy the associated gains. All the while, you continue contributing to a winning fund or stock. (Of course, the fact is that a lump sum investor may profit even more from a market rebound, as he or she may hold comparatively more shares than you.)
Perhaps most importantly, you stay invested. Dollar cost averaging gives you a regular, passive investment strategy as opposed to market timing. In a volatile market, the active investor can quickly become a frustrated casualty of his or her impulses – and foolishly “abandon ship”.
You might call this a tortoise-and-the-hare analogy. The active investor sprinting all over the place for spectacular gains is the hare; you, through dollar cost averaging, emulate the tortoise. It may not be the “sexiest” way to invest, but in a down market, it is a long-term approach well worth considering.
Learn more. We have witnessed a huge downturn in stocks. The question is … how are you positioning yourself to take advantage of the markets when things rebound? This is a good time to meet with a financial advisor – to review or rebalance your portfolio, to look past the headlines of the moment and toward your long-term objectives. If you’re not currently practicing dollar cost averaging, you may want to talk about the concept with your advisor.
Chad J. Karl is a Registered Representative and Investment Advisor Representative of and offers securities and advisory services through WRP INVESTMENTS, Inc. Member FINRA/SIPC AND REGISTERED INVESTMENT ADVISOR. Securities and advisory activities are supervised from 4407 Belmont Ave., Youngstown, OH 44505. (330)759-2023 Not FDIC insured • May involve loss of principal • No bank guarantee Notice: Any securities services will be provided solely by WRP Investments, Inc. and not by Mid America Bank. Mid America is not a licensed broker-dealer. You will be dealing solely with WRP with respect to any securities services. WRP is not affiliated with Mid America. Any securities offered by WRP are not insured by agency of the U.S. government. These are the views of Peter Montoya Inc., not the named Representative nor Broker/Dealer, and should not be construed as investment advice. Neither the named Representative nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information.
Why Choose a Financial Planner?
Did you know that today anyone can claim to be a “financial planner”? It’s true. But not just anyone can call himself or herself a CERTIFIED FINANCIAL PLANNERTM professional. As a consumer, it’s important to understand the difference. Allow me to take this opportunity to explain why. I have earned the right to call myself a CFP(R) professional because I have voluntarily agreed to meet rigorous education, examination and experience standards. I participate in ongoing professional education. And, I follow a strict code of professional ethics and standards of practice.
The standards I adhere to are promulgated and enforced by Certified Financial Planner Board of Standards Inc. CFP Board refers to these standards as “the 4Es” :
>> Education. I completed an education requirement to demonstrate to CFP Board that I have the theoretical and practical financial planning knowledge to practice personal financial planning. In addition, every two years, I complete a minimum of 30 hours of continuing education to stay current with developments in the field.
>> Examination. I passed an exam administered by CFP Board to test my understanding of the financial planning process, tax planning, employee benefits, retirement planning, estate planning, investment management and insurance.
>> Experience. Before earning the CFP(R) certification, I fulfilled a minimum of three years’ experience in the financial planning process.
>> Ethics. I agree to abide by CFP Board’s “Code of Ethics and Professional Responsibility.” The “Code of Ethics” requires CFP(R) certificants to act fairly and diligently, with integrity and objectivity, when providing financial planning services to clients. I also have agreed to submit to background checks by CFP Board and have promised to disclose any investigation or legal proceedings related to my professional or business conduct.
In addition, I follow a six-step financial planning process when working with clients. This means that I explain to clients the scope of work that will be provided and disclose my compensation. I work with clients to determine their personal and financial goals, their tolerance for financial risk, and their timeframe for achieving results. I gather necessary financial information about clients so that I can develop financial planning recommendations that are in their best interests. And I implement and monitor the financial planning recommendations if that is what my clients and I agree to do.
If you are looking for a measure of a financial planner’s commitment to ethical behavior and adherence to high professional standards … if you are looking for a financial planner who will put you and your needs at the center of every financial planning engagement … I suggest that you look for a CFP(R) professional. But don’t just take my word for it. Interview several financial planners to choose the one with whom you feel most comfortable and who best meets your needs.
It’s never too early and never too late to take charge of your financial future. To learn more, I encourage you to visit CFP Board’s Web site at www.CFP.net/learn or contact me at ckarl@chadkarl.com. I would be pleased to meet with you to answer your questions.
The standards I adhere to are promulgated and enforced by Certified Financial Planner Board of Standards Inc. CFP Board refers to these standards as “the 4Es” :
>> Education. I completed an education requirement to demonstrate to CFP Board that I have the theoretical and practical financial planning knowledge to practice personal financial planning. In addition, every two years, I complete a minimum of 30 hours of continuing education to stay current with developments in the field.
>> Examination. I passed an exam administered by CFP Board to test my understanding of the financial planning process, tax planning, employee benefits, retirement planning, estate planning, investment management and insurance.
>> Experience. Before earning the CFP(R) certification, I fulfilled a minimum of three years’ experience in the financial planning process.
>> Ethics. I agree to abide by CFP Board’s “Code of Ethics and Professional Responsibility.” The “Code of Ethics” requires CFP(R) certificants to act fairly and diligently, with integrity and objectivity, when providing financial planning services to clients. I also have agreed to submit to background checks by CFP Board and have promised to disclose any investigation or legal proceedings related to my professional or business conduct.
In addition, I follow a six-step financial planning process when working with clients. This means that I explain to clients the scope of work that will be provided and disclose my compensation. I work with clients to determine their personal and financial goals, their tolerance for financial risk, and their timeframe for achieving results. I gather necessary financial information about clients so that I can develop financial planning recommendations that are in their best interests. And I implement and monitor the financial planning recommendations if that is what my clients and I agree to do.
If you are looking for a measure of a financial planner’s commitment to ethical behavior and adherence to high professional standards … if you are looking for a financial planner who will put you and your needs at the center of every financial planning engagement … I suggest that you look for a CFP(R) professional. But don’t just take my word for it. Interview several financial planners to choose the one with whom you feel most comfortable and who best meets your needs.
It’s never too early and never too late to take charge of your financial future. To learn more, I encourage you to visit CFP Board’s Web site at www.CFP.net/learn or contact me at ckarl@chadkarl.com. I would be pleased to meet with you to answer your questions.
October 4th, 2010: Consumer Spending Up 0.4%
Chad J. Karl Presents: WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE: “There is only one happiness in life - to love and to be loved.” – George Sand
WEEKLY TIP: If your company offers a 401(k) with dollar-for-dollar matching, consider maximizing your contribution in order to get the maximum match benefit. That match money is there for you; the more you give, the more you get.
WEEKLY RIDDLE: Ian bought a bag of apples on Friday and ate a third of them. On Saturday he ate half of the remaining apples. On Sunday he looked in the bag and found that just two apples were left. How many apples were originally in the bag?
Last week’s riddle: I have no heart or mind, but I do have two legs. Yet they only touch the ground when I am not carrying things around. What am I?
Last week’s answer: A wheelbarrow.
October 4, 2010
CONSUMER SPENDING UP 0.4%: August personal spending beat the 0.3% gain forecast by economists polled by Bloomberg News. Personal income was up 0.5% for August, the biggest monthly gain of 2010. The “core” PCE price index (minus food and energy prices) rose just 0.1% in August, a signal of tame inflation. The personal savings rate ticked up to 5.8% from 5.7%. 1,2
MIXED RESULTS FROM CONSUMER POLLS: Early last week, the Conference Board’s consumer confidence index slumped to 48.2 for September, more than five points below forecasts. Yet a fresh Reuters/University of Michigan consumer sentiment survey surprised analysts Friday – that barometer came in at 68.2, above the consensus of 67.0 forecast by Bloomberg and improved from the previous 66.6 reading.3,4
ISM: MANUFACTURING GROWS MODESTLY: The Institute for Supply Management released its September manufacturing index on Friday. The September reading - 54.4 – indicated further growth, but also the slowest pace of expansion in 10 months.1
SURPRISE INCREASE IN CONSTRUCTION SPENDING: Analysts surveyed by Reuters felt we would see a 0.4% drop in this indicator for August. Instead, construction spending rose by 0.4% in that month (a month in which housing starts also surged). The downside: investment in private sector projects hit its lowest level since January 1998.5
FRIDAY GAINS WRAP UP A DOWN WEEK: The DJIA’s four-week winning streak ended Friday, even as the index gained 41.63 on the first day of October. For the week, the DJIA went -0.28% to 10,829.68, the S&P 500 went -0.44% to 1,146.24 and the NASDAQ went -0.21% to 2,370.75. The final September numbers were pretty spectacular: DJIA, +7.72%; S&P 500, +8.76%; NASDAQ, +12.04%. Statistically, September 2010 was the best September for the Dow and S&P in 71 years. All ten industry groups in the S&P 500 advanced last month.6,7
COMING NEXT WEEK: On Monday, we get news on August pending home sales & factory orders. Tuesday, ISM releases its September service sector index. Thursday, we have the latest initial claims numbers & August consumer credit. On Friday, we will get the September unemployment rate from the Labor Department; August wholesale inventories data will also be released.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+3.85
+13.89
+0.49
+0.12
NASDAQ
+4.48
+15.23
+2.04
-3.36
S&P 500
+2.79
+11.30
-1.34
-2.02
REAL YIELD
10/1 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.75%
1.50%
1.78%
4.03%
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 10/1/106,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address.We will contact them first and request their permission to add them to our list.
«RepresentativeDisclosure»
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www.montoyaregistry.com www.petermontoya.com
Citations.
1 - businessweek.com/news/2010-10-01/u-s-stocks-rise-as-consumer-spending-confidence-boost-outlook.html [10/1/10]
2 - marketwatch.com/story/aug-personal-income-up-05-spending-up-02-2010-10-01 [10/1/10]
3 - news.blogs.cnn.com/2010/09/28/consumer-confidence-drops-but-stocks-rise/ [9/28/10]
4 - bloomberg.com/news/2010-10-01/u-s-consumer-confidence-declines-less-than-forecast-michigan-index-shows.html [10/1/10]
5 - foxbusiness.com/markets/2010/10/01/construction-spending-rises-unexpectedly-august/ [10/1/10]
6 - cnbc.com/id/39463494 [10/1/10]
7 - cnbc.com/id/39444625/ [9/30/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F1%2F09&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F1%2F09&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F1%2F09&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F30%2F05&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F30%2F05&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F30%2F05&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F2%2F00&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F2%2F00&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F2%2F00&x=0&y=0 [10/1/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [10/1/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [10/1/10]
10 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
WEEKLY QUOTE: “There is only one happiness in life - to love and to be loved.” – George Sand
WEEKLY TIP: If your company offers a 401(k) with dollar-for-dollar matching, consider maximizing your contribution in order to get the maximum match benefit. That match money is there for you; the more you give, the more you get.
WEEKLY RIDDLE: Ian bought a bag of apples on Friday and ate a third of them. On Saturday he ate half of the remaining apples. On Sunday he looked in the bag and found that just two apples were left. How many apples were originally in the bag?
Last week’s riddle: I have no heart or mind, but I do have two legs. Yet they only touch the ground when I am not carrying things around. What am I?
Last week’s answer: A wheelbarrow.
October 4, 2010
CONSUMER SPENDING UP 0.4%: August personal spending beat the 0.3% gain forecast by economists polled by Bloomberg News. Personal income was up 0.5% for August, the biggest monthly gain of 2010. The “core” PCE price index (minus food and energy prices) rose just 0.1% in August, a signal of tame inflation. The personal savings rate ticked up to 5.8% from 5.7%. 1,2
MIXED RESULTS FROM CONSUMER POLLS: Early last week, the Conference Board’s consumer confidence index slumped to 48.2 for September, more than five points below forecasts. Yet a fresh Reuters/University of Michigan consumer sentiment survey surprised analysts Friday – that barometer came in at 68.2, above the consensus of 67.0 forecast by Bloomberg and improved from the previous 66.6 reading.3,4
ISM: MANUFACTURING GROWS MODESTLY: The Institute for Supply Management released its September manufacturing index on Friday. The September reading - 54.4 – indicated further growth, but also the slowest pace of expansion in 10 months.1
SURPRISE INCREASE IN CONSTRUCTION SPENDING: Analysts surveyed by Reuters felt we would see a 0.4% drop in this indicator for August. Instead, construction spending rose by 0.4% in that month (a month in which housing starts also surged). The downside: investment in private sector projects hit its lowest level since January 1998.5
FRIDAY GAINS WRAP UP A DOWN WEEK: The DJIA’s four-week winning streak ended Friday, even as the index gained 41.63 on the first day of October. For the week, the DJIA went -0.28% to 10,829.68, the S&P 500 went -0.44% to 1,146.24 and the NASDAQ went -0.21% to 2,370.75. The final September numbers were pretty spectacular: DJIA, +7.72%; S&P 500, +8.76%; NASDAQ, +12.04%. Statistically, September 2010 was the best September for the Dow and S&P in 71 years. All ten industry groups in the S&P 500 advanced last month.6,7
COMING NEXT WEEK: On Monday, we get news on August pending home sales & factory orders. Tuesday, ISM releases its September service sector index. Thursday, we have the latest initial claims numbers & August consumer credit. On Friday, we will get the September unemployment rate from the Labor Department; August wholesale inventories data will also be released.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+3.85
+13.89
+0.49
+0.12
NASDAQ
+4.48
+15.23
+2.04
-3.36
S&P 500
+2.79
+11.30
-1.34
-2.02
REAL YIELD
10/1 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.75%
1.50%
1.78%
4.03%
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 10/1/106,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address.We will contact them first and request their permission to add them to our list.
«RepresentativeDisclosure»
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www.montoyaregistry.com www.petermontoya.com
Citations.
1 - businessweek.com/news/2010-10-01/u-s-stocks-rise-as-consumer-spending-confidence-boost-outlook.html [10/1/10]
2 - marketwatch.com/story/aug-personal-income-up-05-spending-up-02-2010-10-01 [10/1/10]
3 - news.blogs.cnn.com/2010/09/28/consumer-confidence-drops-but-stocks-rise/ [9/28/10]
4 - bloomberg.com/news/2010-10-01/u-s-consumer-confidence-declines-less-than-forecast-michigan-index-shows.html [10/1/10]
5 - foxbusiness.com/markets/2010/10/01/construction-spending-rises-unexpectedly-august/ [10/1/10]
6 - cnbc.com/id/39463494 [10/1/10]
7 - cnbc.com/id/39444625/ [9/30/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F1%2F09&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F1%2F09&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F1%2F09&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F30%2F05&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F30%2F05&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F30%2F05&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=10%2F2%2F00&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=10%2F2%2F00&x=0&y=0 [10/1/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=10%2F2%2F00&x=0&y=0 [10/1/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [10/1/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [10/1/10]
10 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
September 27th, 2010: Existing Home Sales Improve
Chad J. Karl Presents: WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE: “Successful people ask better questions, and as a result, they get better answers.” – Anthony Robbins
WEEKLY TIP: If you’re trying to save money or track your spending, consider using cash. Cash is real. You can see it, and you know when you’re out of it. Money becomes more abstract when you use a credit or debit card, leaving you more open to financial choices you may later regret.
WEEKLY RIDDLE: I have no heart or mind, but I do have two legs. Yet they only touch the ground when I am not carrying things around. What am I?
Last week’s riddle: It is passed from hand to hand and pocket to pocket, yet whoever takes it doesn’t know it. Whoever knows it doesn’t want it. And whoever makes it makes sure never to mention it. What is it?
Last week’s answer: Counterfeit money.
September 27, 2010
EXISTING HOME SALES IMPROVE: The National Association of Realtors reported that existing home sales rose 7.6% in August, a rebound from July’s record low. Separately, the Commerce Department said new home sales were flat in August (and 28.9% below year-ago levels). The inventory of unsold new homes decreased 1.4% last month to 206,000 – the smallest number since August 1968.1
MARKET SEES UPSIDE IN DURABLE GOODS DATA: Overall durable goods orders declined 1.3% in August, but that was better than the 1.4% drop forecast by economists polled by Briefing.com. Minus transportation orders, durable goods orders were up 2.0% last month, far better than the 0.5% rise analysts expected. That news helped fuel a 198-point DJIA rally on Friday.2
ECONOMISTS SAY RECESSION DONE; BUFFETT SAYS NO: The National Bureau of Economic Research now says the “Great Recession” ended in June 2009. But Warren Buffett disagrees. Last week, the “oracle of Omaha” told CNBC: “I think we’re in a recession until real per capita GDP gets back up to where it was before … we’re not gonna be out of it for a while, but we will get out of it.”3,4
LEADING INDICATORS ADVANCE 0.3% IN AUGUST: Last month, the Conference Board’s Leading Economic Indicators Index had its best increase since May. This is the second monthly advance in a row for the LEI.5
GOLD TOPS $1,300 FRIDAY: The Federal Reserve hinted at more quantitative easing last week, which helped gold futures. Gold rose above $1,300 in intraday trading Friday on the COMEX and settled at $1,298.10 per ounce. Silver ended the week at another 30-year peak: $21.40 per ounce after a 2.8% weekly advance.6
DOW PUSHES TOWARD: 11,000 The DJIA advanced for a fourth straight week, closing Friday at 10,860.26. On the week, it advanced a healthy 2.38%. The S&P 500? Up +2.05% last week to 1,148.64 at Friday’s close. The NASDAQ? Up +2.83% last week to finish at 2,381.22 Friday.7
COMING NEXT WEEK: Tuesday, a new Case-Shiller home prices report & the Conference Board's Consumer Confidence Index; Thursday, the third 2Q GDP estimate & initial claims; Friday, August consumer spending, the University of Michigan’s final September consumer sentiment survey, the September ISM manufacturing index & new auto sales and construction spending figures.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+4.14
+11.88
+0.85
+0.05
NASDAQ
+4.94
+12.98
+2.50
-3.64
S&P 500
+3.01
+9.31
-1.10
-2.02
REAL YIELD
9/24 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.81%
1.64%
1.74%
4.03%
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 9/24/107,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address.We will contact them first and request their permission to add them to our list.
«RepresentativeDisclosure»
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www.montoyaregistry.com www.petermontoya.com
Citations.
1 - marketwatch.com/story/new-home-sales-flat-in-august-2010-09-24 [9/24/10]
2 - thestreet.com/story/10870879/1/stock-market-story-sept-24.html [9/24/10]
3 - fool.com/investing/general/2010/09/20/so-long-recession.aspx [9/20/10]
4 - fool.com/investing/general/2010/09/24/warren-buffett-this-recession-aint-over.aspx [9/24/10]
5 - theatlantic.com/business/archive/2010/09/leading-indicators-improve-in-august/63452/ [9/23/10]
6 - bloomberg.com/news/2010-09-24/silver-climbs-to-30-year-high-beating-gold-with-its-26-advance-this-year.html [9/24/10]
7 - cnbc.com/id/39348037 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F24%2F09&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F24%2F09&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F24%2F09&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F23%2F05&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F23%2F05&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F23%2F05&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F25%2F00&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F25%2F00&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F25%2F00&x=0&y=0 [9/24/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [9/24/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [9/24/10]
10 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
WEEKLY QUOTE: “Successful people ask better questions, and as a result, they get better answers.” – Anthony Robbins
WEEKLY TIP: If you’re trying to save money or track your spending, consider using cash. Cash is real. You can see it, and you know when you’re out of it. Money becomes more abstract when you use a credit or debit card, leaving you more open to financial choices you may later regret.
WEEKLY RIDDLE: I have no heart or mind, but I do have two legs. Yet they only touch the ground when I am not carrying things around. What am I?
Last week’s riddle: It is passed from hand to hand and pocket to pocket, yet whoever takes it doesn’t know it. Whoever knows it doesn’t want it. And whoever makes it makes sure never to mention it. What is it?
Last week’s answer: Counterfeit money.
September 27, 2010
EXISTING HOME SALES IMPROVE: The National Association of Realtors reported that existing home sales rose 7.6% in August, a rebound from July’s record low. Separately, the Commerce Department said new home sales were flat in August (and 28.9% below year-ago levels). The inventory of unsold new homes decreased 1.4% last month to 206,000 – the smallest number since August 1968.1
MARKET SEES UPSIDE IN DURABLE GOODS DATA: Overall durable goods orders declined 1.3% in August, but that was better than the 1.4% drop forecast by economists polled by Briefing.com. Minus transportation orders, durable goods orders were up 2.0% last month, far better than the 0.5% rise analysts expected. That news helped fuel a 198-point DJIA rally on Friday.2
ECONOMISTS SAY RECESSION DONE; BUFFETT SAYS NO: The National Bureau of Economic Research now says the “Great Recession” ended in June 2009. But Warren Buffett disagrees. Last week, the “oracle of Omaha” told CNBC: “I think we’re in a recession until real per capita GDP gets back up to where it was before … we’re not gonna be out of it for a while, but we will get out of it.”3,4
LEADING INDICATORS ADVANCE 0.3% IN AUGUST: Last month, the Conference Board’s Leading Economic Indicators Index had its best increase since May. This is the second monthly advance in a row for the LEI.5
GOLD TOPS $1,300 FRIDAY: The Federal Reserve hinted at more quantitative easing last week, which helped gold futures. Gold rose above $1,300 in intraday trading Friday on the COMEX and settled at $1,298.10 per ounce. Silver ended the week at another 30-year peak: $21.40 per ounce after a 2.8% weekly advance.6
DOW PUSHES TOWARD: 11,000 The DJIA advanced for a fourth straight week, closing Friday at 10,860.26. On the week, it advanced a healthy 2.38%. The S&P 500? Up +2.05% last week to 1,148.64 at Friday’s close. The NASDAQ? Up +2.83% last week to finish at 2,381.22 Friday.7
COMING NEXT WEEK: Tuesday, a new Case-Shiller home prices report & the Conference Board's Consumer Confidence Index; Thursday, the third 2Q GDP estimate & initial claims; Friday, August consumer spending, the University of Michigan’s final September consumer sentiment survey, the September ISM manufacturing index & new auto sales and construction spending figures.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+4.14
+11.88
+0.85
+0.05
NASDAQ
+4.94
+12.98
+2.50
-3.64
S&P 500
+3.01
+9.31
-1.10
-2.02
REAL YIELD
9/24 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.81%
1.64%
1.74%
4.03%
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 9/24/107,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address.We will contact them first and request their permission to add them to our list.
«RepresentativeDisclosure»
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www.montoyaregistry.com www.petermontoya.com
Citations.
1 - marketwatch.com/story/new-home-sales-flat-in-august-2010-09-24 [9/24/10]
2 - thestreet.com/story/10870879/1/stock-market-story-sept-24.html [9/24/10]
3 - fool.com/investing/general/2010/09/20/so-long-recession.aspx [9/20/10]
4 - fool.com/investing/general/2010/09/24/warren-buffett-this-recession-aint-over.aspx [9/24/10]
5 - theatlantic.com/business/archive/2010/09/leading-indicators-improve-in-august/63452/ [9/23/10]
6 - bloomberg.com/news/2010-09-24/silver-climbs-to-30-year-high-beating-gold-with-its-26-advance-this-year.html [9/24/10]
7 - cnbc.com/id/39348037 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F24%2F09&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F24%2F09&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F24%2F09&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F23%2F05&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F23%2F05&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F23%2F05&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F25%2F00&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F25%2F00&x=0&y=0 [9/24/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F25%2F00&x=0&y=0 [9/24/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [9/24/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [9/24/10]
10 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
September 20th, 2010: CPI, PPI Rise Modestly
Chad J. Karl Presents: WEEKLY ECONOMIC UPDATE
WEEKLY QUOTE: “It is good to have an end to journey toward; but it is the journey that matters, in the end.” – Ursula Le Guin
WEEKLY TIP: Track your expenses. You may be surprised how much you learn about your financial habits, and you might spot ways to save that you hadn’t thought of.
WEEKLY RIDDLE: It is passed from hand to hand and pocket to pocket, yet whoever takes it doesn’t know it. Whoever knows it doesn’t want it. And whoever makes it makes sure never to mention it. What is it?
Last week’s riddle: Where does today come before yesterday?
Last week’s answer: In the dictionary.
September 20, 2010
CPI, PPI RISE MODESTLY: According to the Labor Department, the Consumer Price Index rose 0.3% in August while the Producer Price Index advanced 0.4%. You can chalk up the increase to energy prices, especially summer gasoline prices: consumer energy costs rose 2.3% last month, and energy costs for producers went up 2.2%. Yet core CPI was flat in August, while core PPI increased just 0.1%. Over the last 12 months of data, core CPI and core PPI have respectively risen 0.9% and 1.3%.1,2
CONSUMER SENTIMENT SINKS TO 13-MONTH LOW: The final Reuters/University of Michigan consumer sentiment survey for September read 66.6, the lowest figure since August 2009 and way below the 70.0 forecast by economists polled by MarketWatch. The drop likely reflects consumer reaction to stock market and unemployment data earlier in the month.3
SMALL BUSINESS JOBS BILL CLEARS SENATE: Last Wednesday, the Senate voted 61-38 in favor of a measure that would create a $30 billion fund to encourage small business loans at community banks. The legislation would also offer business owners an immediate expensing deduction and give the self-employed a chance to deduct health care costs from self-employment tax on their 2010 federal returns. The Small Business Jobs Act is widely expected to pass in the House and become law.4,5
GOLD & SILVER RALLY TO IMPRESSIVE HEIGHTS: Gold settled at an all-time record close of $1,277.50 per ounce on the COMEX Friday. The precious metal gained 2.5% last week. Silver futures settled at a peak unseen since 1980 on Friday - $20.82 per ounce.6
SEPTEMBER DEFIES EXPECTATIONS: Historically, September has been lousy for stocks – but not in the last few years. So keep your fingers crossed: the Dow has advanced 4.5% over the past three weeks. The three major U.S. indices logged nice weekly gains from September 13-17, as follows: DJIA, +1.39% to 10,607.85; S&P 500, +1.45% to 1,125.59; NASDAQ, +3.26% to 2,315.61.7
COMING NEXT WEEK: Tuesday, a Fed rate decision + August housing starts & building permits. Thursday, the latest initial claims numbers + August existing home sales & the Conference Board’s leading indicators index. Friday, August new home sales & durable goods orders.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+1.72
+8.42
-0.0006
-0.19
NASDAQ
+2.05
+8.88
+1.44
-3.79
S&P 500
+0.94
+5.64
-1.81
-2.21
REAL YIELD
9/17 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
1.00%
1.62%
1.73%
4.03%
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 9/17/107,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address.We will contact them first and request their permission to add them to our list.
«RepresentativeDisclosure»
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www.montoyaregistry.com www.petermontoya.com
Citations.
1 - marketwatch.com/story/us-aug-cpi-up-03-core-rate-unchanged-2010-09-17 [9/17/10]
2 - marketwatch.com/story/wholesale-prices-climb-04-in-august-2010-09-16-847400 [9/16/10]
3 - marketwatch.com/story/us-sept-consumer-sentiment-falls-to-666-2010-09-17-1015520 [9/17/10]
4 - washingtonpost.com/wp-dyn/content/article/2010/09/16/AR2010091600568.html [9/16/10]
5 - seattletimes.nwsource.com/html/nationworld/2012920552_smallbiz171.html [9/16/10]
6 - marketwatch.com/story/gold-futures-climb-to-new-heights-2010-09-17 [9/17/10]
7 - cnbc.com/id/39236921 [9/17/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F17%2F09&x=0&y=0 [9/17/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F17%2F09&x=0&y=0 [9/17/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F17%2F09&x=0&y=0 [9/17/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F16%2F05&x=0&y=0 [9/17/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F16%2F05&x=0&y=0 [9/17/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F16%2F05&x=0&y=0 [9/17/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=9%2F18%2F00&x=0&y=0 [9/17/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=9%2F18%2F00&x=0&y=0 [9/17/10]
8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=9%2F18%2F00&x=0&y=0 [9/17/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [9/17/10]
9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [9/17/10]
10 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
WEEKLY QUOTE: “It is good to have an end to journey toward; but it is the journey that matters, in the end.” – Ursula Le Guin
WEEKLY TIP: Track your expenses. You may be surprised how much you learn about your financial habits, and you might spot ways to save that you hadn’t thought of.
WEEKLY RIDDLE: It is passed from hand to hand and pocket to pocket, yet whoever takes it doesn’t know it. Whoever knows it doesn’t want it. And whoever makes it makes sure never to mention it. What is it?
Last week’s riddle: Where does today come before yesterday?
Last week’s answer: In the dictionary.
September 20, 2010
CPI, PPI RISE MODESTLY: According to the Labor Department, the Consumer Price Index rose 0.3% in August while the Producer Price Index advanced 0.4%. You can chalk up the increase to energy prices, especially summer gasoline prices: consumer energy costs rose 2.3% last month, and energy costs for producers went up 2.2%. Yet core CPI was flat in August, while core PPI increased just 0.1%. Over the last 12 months of data, core CPI and core PPI have respectively risen 0.9% and 1.3%.1,2
CONSUMER SENTIMENT SINKS TO 13-MONTH LOW: The final Reuters/University of Michigan consumer sentiment survey for September read 66.6, the lowest figure since August 2009 and way below the 70.0 forecast by economists polled by MarketWatch. The drop likely reflects consumer reaction to stock market and unemployment data earlier in the month.3
SMALL BUSINESS JOBS BILL CLEARS SENATE: Last Wednesday, the Senate voted 61-38 in favor of a measure that would create a $30 billion fund to encourage small business loans at community banks. The legislation would also offer business owners an immediate expensing deduction and give the self-employed a chance to deduct health care costs from self-employment tax on their 2010 federal returns. The Small Business Jobs Act is widely expected to pass in the House and become law.4,5
GOLD & SILVER RALLY TO IMPRESSIVE HEIGHTS: Gold settled at an all-time record close of $1,277.50 per ounce on the COMEX Friday. The precious metal gained 2.5% last week. Silver futures settled at a peak unseen since 1980 on Friday - $20.82 per ounce.6
SEPTEMBER DEFIES EXPECTATIONS: Historically, September has been lousy for stocks – but not in the last few years. So keep your fingers crossed: the Dow has advanced 4.5% over the past three weeks. The three major U.S. indices logged nice weekly gains from September 13-17, as follows: DJIA, +1.39% to 10,607.85; S&P 500, +1.45% to 1,125.59; NASDAQ, +3.26% to 2,315.61.7
COMING NEXT WEEK: Tuesday, a Fed rate decision + August housing starts & building permits. Thursday, the latest initial claims numbers + August existing home sales & the Conference Board’s leading indicators index. Friday, August new home sales & durable goods orders.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+1.72
+8.42
-0.0006
-0.19
NASDAQ
+2.05
+8.88
+1.44
-3.79
S&P 500
+0.94
+5.64
-1.81
-2.21
REAL YIELD
9/17 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
1.00%
1.62%
1.73%
4.03%
Source: cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 9/17/107,8,9,10
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
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«RepresentativeDisclosure»
This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information should not be construed as investment advice. 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. 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www.montoyaregistry.com www.petermontoya.com
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1 - marketwatch.com/story/us-aug-cpi-up-03-core-rate-unchanged-2010-09-17 [9/17/10]
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3 - marketwatch.com/story/us-sept-consumer-sentiment-falls-to-666-2010-09-17-1015520 [9/17/10]
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6 - marketwatch.com/story/gold-futures-climb-to-new-heights-2010-09-17 [9/17/10]
7 - cnbc.com/id/39236921 [9/17/10]
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9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [9/17/10]
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10 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]
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