Floyd E. Miller Presents: Weekly Economic Update for August 29, 2011

Floyd E. Miller Presents: Weekly Economic Update for August 29, 2011

COULD SEPTEMBER BRING ANOTHER STIMULUS? Could we see a QE3? Maybe. While Federal Reserve Chairman Ben Bernanke made no mention of a plan to aid the economy at last week’s Fed symposium in Wyoming, he did refer to “a range of tools that could be used to provide additional monetary stimulus” and noted that the Fed “will continue to consider those and other pertinent issues… at our meeting in September.” September’s FOMC meeting has now been lengthened to 2 days; make of that what you will. Bernanke said he expects improved GDP in the second half of 2011 and core inflation under 2%.1{{more}}NEW HOME SALES DECLINE, BUT HOME PRICES GO UPThe Census Bureau announced a 0.7% drop in new home sales in July; sales were up 6.8% from a year ago. The average sale price was $272,300, with 6.6 months of inventory on the market. Overall U.S. home prices rose 0.9% in June, said the Federal Housing Finance Agency .2,3SURPRISE! DURABLE GOODS ORDERS RISE 4.0%July figures from the Commerce Department far outpaced forecasts. Economists surveyed by Bloomberg News had expected a 2.0% increase. July saw an 11.5% gain orders for autos and auto parts – the biggest 1-month jump in demand since January 2003 – and a 43.4% leap in orders for commercial aircraft. Even with transportation orders factored out, orders for hard goods rose 0.7% last month.3CONSUMERS PERCEIVE TOUGH TIMESThe final August Thomson Reuters/University of Michigan consumer sentiment survey came in at 55.7 – a bit of a rebound from the initial, abysmal 54.9 mark for the month. It is a long way from the high 80s .4BEST WEEK FOR STOCKS SINCE JUNEGold retreated, 2Q GDP was revised down to 1.0%, and stocks rallied. The 3 major Wall Street indices snapped 4-week losing streaks as follows: DJIA, +4.32% to 11,284.54; S&P 500, +4.74% to 1,176.80; NASDAQ, +5.89% to 2,479.85.4,5THIS WEEK: Monday, the numbers come out on July consumer spending, and we also get a report on June pending home sales. Tuesday offers June’s Case-Shiller home price index and the Conference Board’s August snapshot of consumer confidence. July factory orders data comes out on Wednesday. In addition to weekly jobless claims figures, Thursday brings ISM’s August manufacturing index. On Friday morning, the July unemployment report is released.% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVGDJIA -2.53 +13.01 +0.000009 +0.87NASDAQ -6.52 +17.05 +3.17 +2.97S&P 500 -6.43 +12.37 -1.83 -0.0002REAL YIELD 8/26 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO10 YR TIPS 0.12% 0.95% 2.24% 3.50%Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 8/26/115,6,7,8Indices 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 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. 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If assistance is needed, the reader is advised to engage the services of a competent professional.Citations.1 – cnbc.com/id/44286314 [8/26/11] 2 – census.gov/const/newressales.pdf [8/23/11] 3 – bloomberg.com/news/2011-08-24/orders-for-durable-goods-in-u-s-increase-4-twice-as-much-as-estimated.html [8/24/11]4 – businessweek.com/news/2011-08-26/u-s-michigan-consumer-sentiment-index-slumped-in-august.html [8/25/11]5 – cnbc.com/id/44285944 [8/26/11]6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F26%2F10&x=0&y=0 [8/26/11]6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F26%2F10&x=10&y=18 [8/26/11]6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F26%2F10&x=0&y=0 [8/26/11]6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F25%2F06&x=0&y=0 [8/26/11]6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F25%2F06&x=0&y=0 [8/26/11]6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F25%2F06&x=0&y=0 [8/26/11]6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F27%2F01&x=0&y=0 [8/26/11]6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F127%2F01&x=0&y=0 [8/26/11]6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F27%2F01&x=0&y=0 [8/26/11]7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/26/11]7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/26/11]8 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]9 – montoyaregistry.com/Financial-Market.aspx?financial-market=wealth-planning-using-the-stretch-ira-strategy&category=4 [8/28/11]Floyd E. MillerFSC Securities Corporation3300 South 14th St. Suite 100Abilene, TX 79605 676-0138