Floyd E. Miller Presents: Weekly Economic Update: February 28, 2011

Floyd E. Miller Presents: Weekly Economic Update: February 28, 2011

By Floyd Miller

 

 

 

STRIKING IMPROVEMENT IN CONSUMER SENTIMENT Consumer sentiment is really rebounding – at least by the measure of the country’s two most respected polls. The final February Thomson Reuters/University of Michigan consumer sentiment survey came in at 77.5, leaping north from January’s 74.2 mark to the highest reading in 37 months. The Conference Board’s consumer confidence index climbed all the way to 70.4 this month and its gauge of future expectations hit its most optimistic level since December 2006.1,2REAL ESTATE MARKET WEATHERS CHILLY JANUARYAccording to the Census Bureau, new home sales slipped 12.6% last month. Yet the National Association of Realtors reported that residential resales improved by 2.7% in January, the fifth increase in the past six months. Existing homes have apparently become a bit less expensive: the December Case-Shiller home price index came out last week and showed prices slipping 1.0% from November across 20 metro areas.2,3{{more}}DURABLE GOODS ORDERS UP 2.7%Aircraft orders drove the overall increase in the category for January. Economists polled by Dow Jones Newswires had forecast a 2.0% gain. Yet when you factor out transportation orders, durable goods orders actually fell 3.6% in January.4CRUDE SETTLES NEAR $98, GAS PRICES SPIKE NORTH By Friday afternoon, oil prices had retreated from Thursday’s $103 intraday peak. On the NYMEX, crude for April delivery settled at $97.88 a barrel Friday, capping a 9.11% weekly advance. Retail gasoline prices rose 5.9 cents overnight; the average price for a gallon of regular unleaded was $3.29 on Friday.5,6UNREST HAMPERS STOCKS February 21-25 amounted to the worst trading week for the S&P 500 and Dow since November. Statistically, this is what happened last week: DJIA, -2.10% to 12,130.45; NASDAQ, -1.87% to 2,781.05; S&P 500, -1.72% to 1,319.88.7 THIS WEEK: Reports on January consumer spending and December pending home sales arrive Monday. Tuesday, we get the latest ISM manufacturing index and Federal Reserve chairman Ben Bernanke speaks to Congress on monetary policy. Wednesday, we have a new Beige Book from the Fed and 4Q results from Staples and Costco. Thursday, we have the February ISM service-sector index, new initial and continuing claims figures and 4Q earnings from Kroger and Heinz. Friday, we get the February unemployment figures and the January report on factory orders.% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVGDJIA +4.78 +17.53 +1.93 +1.40NASDAQ +4.83 +24.48 +4.32 +2.05S&P 500 +4.95 +19.67 +0.39 +0.41REAL YIELD 2/25 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO10 YR TIPS 1.02% 1.51% 2.03% 3.52%Source: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 2/25/117,8,9,10Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.These returns do not include dividends.«RepresentativeDisclosure»This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information should not be construed as investment, tax or legal 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 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. operates two securities exchanges: the New York Stock Exchange and NYSE Arca . NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.Citations.1 – marketwatch.com/story/consumer-sentiment-rises-in-february-2011-02-25 [2/25/11]2 – blogs.barrons.com/stockstowatchtoday/2011/02/22/consumer-confidence-up-home-prices-down/ [2/22/11]3 – marketwatch.com/story/new-home-sales-fall-126-in-january-2011-02-24 [2/24/11]4 – blogs.barrons.com/stockstowatchtoday/2011/02/24/jobless-claims-fall-durable-goods-orders-gain/ [2/24/11]5 – blogs.wsj.com/marketbeat/2011/02/25/data-points-energy-metals-464/ [2/25/11]6 – money.cnn.com/2011/02/25/news/economy/gasoline_prices/index.htm [2/25/11]7 – cnbc.com/id/41785394 [2/25/11]8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=2%2F25%2F10&x=0&y=0 [2/25/11]8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=2%2F25%2F10&x=0&y=0 [2/25/11]8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=2%2F25%2F10&x=0&y=0 [2/25/11]8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=2%2F24%2F06&x=0&y=0 [2/25/11]8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=2%2F24%2F06&x=0&y=0 [2/25/11]8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=2%2F24%2F06&x=0&y=0 [2/25/11]8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=2%2F26%2F01&x=0&y=0 [2/25/11]8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=2%2F26%2F01&x=0&y=0 [2/25/11]8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=2%2F26%2F01&x=0&y=0 [2/25/11]9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/25/11]9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/25/11]10 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]11 -montoyaregistry.com/Financial-Market.aspx?financial-market=why-choose-an-independent-financial-advisor&category=5 [2/27/11]