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Weekly Economic Update August 20, 2013

Weekly Economic Update August 20, 2013

Provided by Kim Gaxiola

CONSUMER PRICES RISE 0.2% IN JULY

That was exactly the increase that analysts surveyed by Briefing.com expected, and it was a relief after the 0.5% rise in the Consumer Price Index for June. As for July’s Producer Price Index, it was flat – a welcome contrast to June’s 0.8% jump.1

WEEKLY QUOTE

“If you are not criticized, you may not be doing much.”

– Donald Rumsfeld

 

 

RETAIL SALES IMPROVE

July didn’t see as much car and truck buying as in spring, so the gain was 0.2% compared to 0.5% in May and 0.6% in June. The impressive news was the 0.5% rise in core retail sales (excluding auto, gas and construction purchases). That particular indicator hadn’t been so positive since December.2

WEEKLY TIP

Sometimes a sector or industry is touted as the “wave of the future” or the next hot trend. Beware of shifting your investment mix in response to hype or headlines – you may end up with a less diversified portfolio and greater exposure to risk.

 

 

HOUSEHOLD SENTIMENT SLIPS

Analysts polled by Briefing.com expected August’s preliminary University of Michigan consumer sentiment index to be unchanged from the final July reading of 85.1. Instead, it dropped to 80.0 – a 4-month low.1,3,4

 

 

RESIDENTIAL CONSTRUCTION INCREASES

Housing starts were up 5.9% in July, according to the Commerce Department; building permits rose 2.7% last month. Both increases were in line with the estimates of analysts surveyed by Reuters.4

 

 

A 2-WEEK LOSING STREAK ON THE STREET

Shares fell during a week in which 10-year Treasury yields hit a 2-year peak of 2.86%. The S&P 500 (-2.10% to 1,655.83), Dow (-2.23% to 15,081.47) and NASDAQ (-1.57% to 3,602.78) all pulled back. The Dow suffered its poorest week of 2013.3

THIS WEEK: Urban Outfitters announces Q2 results on Monday. Tuesday, Dick’s Sporting Goods, Medtronic, BHP Billiton, Home Depot, Best Buy, TJX, Barnes & Noble, JCPenney, Saks, Analog Devices and La-Z- Boy come out with earnings. Wednesday, the July 31 FOMC minutes will be released, and NAR comes out with July existing home sales numbers; earnings arrive from Target, JM Smucker, Lowe’s, Staples, American Eagle, Toll Brothers, Hewlett-Packard and L Brands. Thursday, we get a new FHFA Housing Price Index, the Conference Board’s July index of leading indicators, new initial jobless claims figures, and earnings from Abercrombie & Fitch, Gold Fields, Hormel Foods, Dollar Tree, Gamestop, Sears, Autodesk, Gap, Marvell, Ross Stores, Aeropostale and Pandora. On Friday, quarterly results from Foot Locker and Ann complement July new home sales figures.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+15.09

+13.82

+5.87

+6.18

NASDAQ

+19.32

+17.65

+9.38

+11.17

S&P 500

+16.10

+16.98

+5.51

+6.71

REAL YIELD

8/16 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.68%

-0.42%

1.66%

2.36%

Sources: cnbc.com, bigcharts.com, treasury.gov – 8/16/133,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

WEEKLY RIDDLE – There are three cups of flour on a counter and you take one away. How many cups of flour do you have now?

Last week’s riddle – A cat falls into a hole 14.5′ deep. The cat can jump 3′ high, but she slides back 1′ with each jump. How many jumps does it take her to get out of the hole?

Last week’s answer – Every 3′ jump accompanied by a 1′ slide equals jumps of 2′ high; at that rate, the cat’s seventh jump, starting at 12′, will put her 15′ above the bottom of the hole and offer her an escape.

 

 

Kim Gaxiola may be reached at (800) 584.3652 or kim@gaxiolafinancialgroup.com or www.techgirlfinancial.com.
TechGirl Financial is a part of Gaxiola Financial Group. Registered representative, securities offered through Cambridge Investment Research, Inc., broker-dealer, member FINRA/SIPC. Investment advisor representative, Cambridge Investment Research Advisors, Inc., a registered investment advisor. Cambridge and Gaxiola Financial Group are not affiliated.
Gaxiola Financial Group | 305 Vineyard Town Center #369 | Morgan Hill, CA 95037

 

1 – briefing.com/investor/calendars/economic/2013/08/12-16 [8/16/13]
2 – nytimes.com/2013/08/14/business/economy/july-retail-sales-rose-0-2-despite-a-drop-in-auto-sales.html [8/14/13]
3 – tinyurl.com/l27dgrz [8/16/13]
4 – reuters.com/article/2013/08/16/us-usa-economy-idUSBRE97E0KS20130816 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F16%2F12&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F16%2F12&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F16%2F12&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F15%2F08&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F15%2F08&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F15%2F08&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F15%2F03&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F15%2F03&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F15%2F03&x=0&y=0 [8/16/13]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/16/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/16/13]

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