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.


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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

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]