Bill Losey’s Weekly Economic Update For September 27, 2010

EXISTING HOME SALES IMPROVE
The National Association of Realtors reported that existing home sales rose 7.6% in August, a rebound from July’s record low. Separately, the Commerce Department said new home sales were flat in August (and 28.9% below year-ago levels). The inventory of unsold new homes decreased 1.4% last month to 206,000 – the smallest number since August 1968.

MARKET SEES UPSIDE IN DURABLE GOODS DATA
Overall durable goods orders declined 1.3% in August, but that was better than the 1.4% drop forecast by economists polled by Briefing.com. Minus transportation orders, durable goods orders were up 2.0% last month, far better than the 0.5% rise analysts expected. That news helped fuel a 198-point DJIA rally on Friday.

ECONOMISTS SAY RECESSION DONE; BUFFETT SAYS NO
The National Bureau of Economic Research now says the “Great Recession” ended in June 2009. But Warren Buffett disagrees. Last week, the “oracle of Omaha” told CNBC: “I think we’re in a recession until real per capita GDP gets back up to where it was before … we’re not gonna be out of it for a while, but we will get out of it.”

LEADING INDICATORS ADVANCE 0.3% IN AUGUST
Last month, the Conference Board’s Leading Economic Indicators Index had its best increase since May. This is the second monthly advance in a row for the LEI.

GOLD TOPS $1,300 FRIDAY
The Federal Reserve hinted at more quantitative easing last week, which helped gold futures. Gold rose above $1,300 in intraday trading Friday on the COMEX and settled at $1,298.10 per ounce. Silver ended the week at another 30-year peak: $21.40 per ounce after a 2.8% weekly advance.

DOW PUSHES TOWARD 11,000
The DJIA advanced for a fourth straight week, closing Friday at 10,860.26. On the week, it advanced a healthy 2.38%. The S&P 500? Up +2.05% last week to 1,148.64 at Friday’s close. The NASDAQ? Up +2.83% last week to finish at 2,381.22 Friday.