Floyd E. Miller Presents: Weekly Economic Update for August 1, 2011

Floyd E. Miller Presents: Weekly Economic Update for August 1, 2011

By Floyd Miller

 

 

 

August 1, 2011A HINT OF COMPROMISE, A SIGN OF WEAKNESSThe weekend arrived with the House narrowly passing a Republican debt-reduction bill – the “two-step” bill linked to a balanced budget amendment, proposing a $917 billion cut in federal spending. Though doomed in the Senate, the vote on the bill opened a door to negotiation that may lead to passage of a compromise measure by the August 2 deadline. Meanwhile, the Commerce Department announced that the economy grew just 1.3% in the second quarter; economists polled by Reuters had forecast GDP of +1.8%.1,2,3,4{{more}}MIXED CONSUMER CONFIDENCE READINGSThe final July Reuters/University of Michigan consumer sentiment survey came in at 63.7, the lowest reading since March 2009. However, the Conference Board’s July survey came in 1.9 points higher than June at 59.5.5,6GOLD & OIL GO IN DIFFERENT DIRECTIONSThe price of gold went up $126.00 in July. Futures ended the month at $1,628.30 on the COMEX. Oil prices slipped 4.18% last week, settling at $95.70 a barrel.7REAL ESTATE INDICATORS LOOK MIXED The May S&P/Case-Shiller Home Price Index showed a 1.0% gain in prices across 20 metro markets; the spring homebuying bump may have contributed to its second straight monthly advance. Year-over-year, prices were down 4.5%. The National Association of Realtors said pending home sales rose 2.4% in June; the Census Bureau said new home sales decreased 1.0% in that month.8,9DEBT IMPASSE TAKES TOLL ON STOCKSJuly 25-29 was a trying market week. The numbers: S&P 500, -3.92% to 1,292.28; DJIA, -4.24% to 12,143.24; NASDAQ, -3.58% to 2,756.38.10THIS WEEK: Monday offers the July ISM manufacturing index and earnings from Honda, Allstate and Humana. Tuesday, the consumer spending numbers for June are available along with 2Q results out of Pfizer, CBS, Barclays, Molson Coors and Toyota. Wednesday we have ISM’s July service sector index, news about June factory orders and earnings from MasterCard, Comcast and Time Warner. Thursday brings weekly jobless claims plus results from General Motors, Adidas, Unilever, CIGNA, CVS, Kraft, DirecTV and Southwest Airlines. The July unemployment figures are issued Friday, and Berkshire Hathaway, Viacom, Allianz and Procter & Gamble all come out with 2Q results.% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVGDJIA +4.89 +16.01 +1.65 +1.67NASDAQ +3.90 +22.41 +6.32 +3.66S&P 500 +2.75 +17.32 +0.21 +0.73REAL YIELD 7/29 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO10 YR TIPS 0.38% 1.21% 2.41% 3.50%Sources: usatoday.com, online.wsj.com, bigcharts.com, treasury.gov – 7/29/1110,11,12,13,14Indices 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 MarketingLibrary.Net 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 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 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/house-passes-bill-to-raise-debt-ceiling-2011-07-29-1827320 [7/29/11] 2 – cnbc.com/id/43946958 3 – huffingtonpost.com/2011/07/29/democrats-narrow-targets-_n_913725.html [7/29/11]4 – cnbc.com/id/43941459/ [7/29/11]5 – bloomberg.com/news/2011-07-29/michigan-consumer-sentiment-index-fell-to-63-7-in-july-from-71-5-in-june.html [7/29/11]6 – conference-board.org/data/consumerconfidence.cfm [7/26/11]7 – blogs.wsj.com/marketbeat/2011/07/29/data-points-energy-metals-503/ [7/29/11]8 – seattletimes.nwsource.com/html/businesstechnology/2015732200_homeprices27.html [7/26/11]9 – blogs.wsj.com/developments/2011/07/28/behind-the-numbers-pending-home-sales-rise/ [7/28/11]10 – blogs.wsj.com/marketbeat/2011/07/29/data-points-u-s-markets-34/ [7/29/11]11 – usatoday.com/money/index [7/29/11]12 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F29%2F10&x=0&y=0 [7/29/11]12 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F29%2F10&x=10&y=18 [7/29/11]12 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F29%2F10&x=0&y=0 [7/29/11]12 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F28%2F06&x=0&y=0 [7/29/11]12 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F28%2F06&x=0&y=0 [7/29/11]12 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F28%2F06&x=0&y=0 [7/29/11]12 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F30%2F01&x=0&y=0 [7/29/11]12 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F30%2F01&x=0&y=0 [7/29/11]12 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F2%30F01&x=0&y=0 [7/29/11]13 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/29/11]13 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/29/11]14 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]15 -montoyaregistry.com/Financial-Market.aspx?financial-market=inheriting-an-ira&category=22 [7/31/11]Contact Floyd E. Miller at FSC Securities Corporation, 3300 South 14th St. Suite 100Abilene, TX 79605 or call 676-0138. Securities and investment advisory service offered through FSC Securities Corporation, member of FINRA/SiPC, a SEC registered investment advisor.