Floyd E. Miller Presents: Weekly Economic Update for June 27, 2011

Floyd E. Miller Presents: Weekly Economic Update for June 27, 2011

By Floyd Miller

 

 

 

PEAK HOMEBUYING SEASON, BUT FEWER HOME SALES The National Association of Realtors reported a 3.8% dip in existing home sales in May, and the Census Bureau noted a 2.1% reduction in new home purchases last month. The good news? New home sales were up 13.5% from last May, with the average price of a new home up $1,400 to $266,400. However, existing home sales were down 15.3% from a year before while the median existing home price was down 4.6% across the past 12 months.1,2IEA RELEASE SHIFTS SENTIMENT IN OIL MARKETThursday, the International Energy Agency decided that major oil-producing countries should release oil from their reserves to address a global shortfall. The U.S. will supply half of the 60 million barrels from its Strategic Petroleum Reserve, with the balance coming from nations in Europe and Asia. On Friday, oil in Europe slipped about 8% and settled at a four-month low; in the U.S. oil lost only 2.4% on the week and settled at $91.16 a barrel on the NYMEX.3{{more}}POSITIVE SIGNALS FOR BUSINESS INVESTMENTThe Commerce Department reported a 1.9% increase in durable goods orders for May. That’s a nice news item in itself, but consider the last few quarters and you notice that business investment is really ramping up: data from the Census Bureau has orders for new capital equipment rising at a 28% annualized pace during the last three months, and shipments of new capital equipment are up 15% in that span.4,5NASDAQ GLIDES THROUGH VOLATILE WEEK The tech-heavy index pulled out a 1.39% advance across June 20-24 to settle at 2,652.89 Friday, having a very different week from the Dow and the S&P 500 .6THIS WEEK: Monday, we get the Commerce Department’s report on consumer spending for May, plus earnings from Nike. Tuesday offers the April edition of the S&P Case-Shiller home price index and the Conference Board’s June look at consumer confidence. Wednesday, we have 2Q results from General Mills, Family Dollar, KB Home and Monsanto plus the NAR’s report on May pending home sales. June ends on Thursday, and QE2 ends with it; of course, the latest initial and continuing claims figures will be released. Friday, July begins with the University of Michigan’s final June consumer sentiment survey, the June ISM manufacturing index, and data on May construction spending.% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVGDJIA +3.08 +17.55 +1.72 +1.36NASDAQ +.000008 +19.64 +5.00 +2.94S&P 500 +0.86 +18.14 +0.38 +0.41REAL YIELD 6/24 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO10 YR TIPS 0.64% 1.23% 2.64% 3.52%Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 6/24/116,7,8,9Indices 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. 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 – money.cnn.com/2011/06/23/real_estate/new_home_sales/?section=money_latest [6/23/11] 2 – nytimes.com/2011/06/22/business/economy/22econ.html [6/22/11]3 – bloomberg.com/news/2011-06-24/oil-fluctuates-in-n-y-on-u-s-durable-goods-orders-iea-reserve-release.html [6/24/11]4 – marketwatch.com/story/us-durable-goods-orders-rise-19-for-may-2011-06-24 [6/24/11]5 – marketwatch.com/story/business-investment-is-strengthening-2011-06-24 [6/24/11]6 – cnbc.com/id/43528501 [6/24/11]7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F24%2F10&x=0&y=0 [6/24/11]7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F24%2F10&x=10&y=18 [6/24/11]7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F24%2F10&x=0&y=0 [6/24/11]7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F23%2F06&x=0&y=0 [6/24/11]7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F23%2F06&x=0&y=0 [6/24/11]7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F23%2F06&x=0&y=0 [6/24/11]7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F25%2F01&x=0&y=0 [6/24/11]7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F25%2F01&x=0&y=0 [6/24/11]7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F25%2F01&x=0&y=0 [6/24/11]8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/24/11]8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/24/11]9 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]10 -montoyaregistry.com/Financial-Market.aspx?financial-market=tax-loss-harvesting&category=31 [6/26/11]Floyd E. MillerFSC Securities Corporation3300 South 14th St. Suite 100Abilene, TX 79605 676-0138