Floyd E. Miller Presents: Weekly Economic Update for October 31, 2011

Floyd E. Miller Presents: Weekly Economic Update for October 31, 2011

October 31, 2011HOUSEHOLDS EARN & SAVE LESS, YET SPEND MORE On Friday, Commerce Department data showed that personal incomes have declined in each of the past three months when adjusted for inflation. However, personal spending has increased in each of those months; it improved by 0.6% in September. The personal savings rate fell by 0.5% last month to 3.6%, a low unseen since December 2007.1,2 CONTRASTING CONSUMER SENTIMENT FINDINGSOctober’s final University of Michigan consumer sentiment survey improved from its September predecessor, moving to 60.9 from 59.4.Yet the Conference Board’s monthly consumer confidence index slipped from 46.4 last month to 39.8 this month, a reading more like the ones from the Great Recession.1,3NEW HOME SALES UP 5.7%September’s increase was the first in four months, aided by a 3.1% monthly dip in prices and ultra-low mortgage rates. The Census Bureau said that new home sales were down 0.9% from a year before. Turning to residential resales, the National Association of Realtors pending home sales index unexpectedly fell 4.6% for September. On the bright side, the August Case-Shiller Home Price Index was up 0.2% for August, a fifth straight monthly advance; there were price gains for 10 of 20 metro areas surveyed.4,5,6 A TERRIFIC WEEK FOR STOCKSLast week, Eurozone leaders struck a deal in which the region’s banks would accept a 50% writedown on Greek bonds. They also agreed to boost the euro area bailout fund fivefold and announced a bank recapitalization plan. Pair that with U.S. 3Q GDP coming in at an initial estimate of +2.5%, and you have two of the factors that brought about these big weekly gains : DJIA, +3.58% to 12,231.11; S&P 500, +3.78% to 1,285.08; NASDAQ, +3.78% to 2,737.15.7,8,9THIS WEEK: On Monday, Allstate and Humana issue earnings reports. Tuesday, the ISM October manufacturing index is released and 3Q results come in from Pfizer, Valero, MetroPCS and Archer Daniels Midland. Wednesday, Ben Bernanke speaks as the Federal Reserve wraps up a two-day policy meeting; earnings are released by Molson Coors, Tesoro, Qualcomm, Kraft Foods, Comcast and MasterCard. Thursday we get earnings from CVS, Starbucks, CBS, Genworth, AIG, Fluor, Sunoco, Kellogg, PG&E and Public Storage; there will also be an ECB rate decision, and the ISM service sector index for October comes out. On Friday, October’s unemployment report will be released.% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVGDJIA +5.65 +10.05 +0.23 +3.20NASDAQ +3.18 +9.16 +3.29 +6.11S&P 500 +2.18 +8.56 -1.34 +1.92REAL YIELD 10/28 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO10 YR TIPS 0.19% 0.57% 2.37% 3.50%Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 10/28/119,10,11,12Indices 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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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 – foxbusiness.com/markets/2011/10/28/consumer-spending-rises-weak-incomes-worry/ [10/28/11]2 – montoyaregistry.com/Financial-Market.aspx?financial-market=5-savings-secrets&category=29 [10/28/11] 3 – npr.org/blogs/thetwo-way/2011/10/25/141683694/consumer-confidence-back-down-to-recession-level [10/25/11] 4 – marketwatch.com/story/new-us-home-sales-rise-as-prices-tumble-2011-10-26 [10/26/11]5 – bloomberg.com/news/2011-10-27/pending-sales-of-u-s-existing-homes-unexpectedly-falls-4-6-on-demand-ebb.html [10/27/11]6 – articles.latimes.com/2011/oct/25/business/la-fi-home-prices-20111026 [10/25/11]7 – marketwatch.com/story/greek-bondholders-to-take-50-haircut-2011-10-26 [10/27/11] 8 – abcnews.go.com/Business/gdp-grew-25-percent-boosted-consumer-spending-double/story?id=14821833 [10/27/11]9 – money.msn.com/market-news/post.aspx?post=9a8a85b3-fec9-44a1-992f-8ad9c15a1c30 [10/28/11]10 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F28%2F10&x=0&y=0 [10/28/11]10 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F28F2%2F10&x=10&y=18 [10/28/11]10 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F28%2F10&x=0&y=0 [10/28/11]10 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F27%2F06&x=0&y=0 [10/28/11]10 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F27%2F06&x=0&y=0 [10/28/11]10 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F27%2F06&x=0&y=0 [10/28/11]10 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F29%2F01&x=0&y=0 [10/28/11]10 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F29%2F01&x=0&y=0 [10/28/11]10 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F29%2F01&x=0&y=0 [10/28/11]11 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/28/11]11 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/28/11]12 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm71101.pdf [7/11/01]Floyd E. MillerFSC Securities Corporation3300 South 14th St. Suite 100Abilene, TX 79605 676-0138