Market Commentary - Week of 8/19/13
“If you are not criticized, you may not be doing much.”
- Donald Rumsfeld
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.
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.
Week of August 19, 2013
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
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
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.
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.
This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
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]