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Bill Losey’s Weekly Economic Update for February 20, 2012

admin — Mon, 20 Feb 2012 23:21:05 +0000

CONSUMER PRICES UP 0.2% for January
Major factors in this increase in the Consumer Price Index include a 0.9% rise in the price of clothing as well as rising rents and healthcare costs. Core CPI also rose 0.2% in January. The annualized inflation rate hit 2.3% last month, yet the Federal Reserve expects but a 1.6% gain in the CPI across 2012. Wholesale inflation ticked up 0.1% for January, with the core Producer Price Index up 0.4%.

RETAIL SALES FALL SHORT OF (HIGH) EXPECTATIONS
The Census Bureau reported a healthy 0.4% rise in U.S. retail purchases for January. However, economists polled by Dow Jones Newswires thought they would rise 0.9% for the month. Subtract a 1.1% decline in auto sales from the data, and retail sales were up 0.7% for January.

LEADING INDICATORS Hit 3½-YEAR PEAK
The Conference Board’s Leading Indicator Index rose 0.4% in January, with seven of ten indicators improving. (The most notable positive detected: a widening in the spread between short-term and long-term interest rates.) The index advanced for a fourth consecutive month.

NASDAQ 3,000? DOW 13,000?
Both indices approached those psychological landmarks on Friday. The Dow went +1.16% for the week, the NASDAQ +1.65% and the S&P 500 +1.38%. At week’s end, the Dow was at 12,949.87, the NASDAQ at 2,951.78 and the S&P at 1,361.23. Oil futures soared 4.63% last week on the NYMEX to settle at $103.24 a barrel Friday. Gold had a flat week, settling at $1,724.50 Friday on the COMEX following a 0.07% five-day advance.

Bill Losey’s Weekly Economic Update for February 13, 2012

admin — Mon, 13 Feb 2012 18:13:19 +0000

WILL THE MORTGAGE ACCORD BRING MUCH RELIEF?

While the $25+ billion settlement reached last week between five large mortgage servicers and 49 states was momentous, it may not help many borrowers in trouble. Only about 1 million of the estimated 11 million underwater homeowners will see relief as loans sold to Fannie Mae and Freddie Mac aren’t included in the deal. Much of the settlement money will go toward mortgage modification. Roughly 750,000 homeowners are slated to receive financial compensation from the accord (an average of about $2,000 per household). The lenders involved are JPMorgan Chase, Bank of America, Ally Financial, Citigroup and Wells Fargo; other banks could join them. (The state of Oklahoma forged its own agreement with the five lenders.)

CONSUMER CONFIDENCE TAKES A DIP
The University of Michigan’s initial February consumer sentiment survey fell to 72.5 from its one-year peak of 75.0 at the end of January. Economists polled by Bloomberg News had expected a 74.8 reading. However, the percentage of consumers who felt the jobless rate would fall in future months was at the highest level the survey had seen in 28 years.

GOLD SLIPS, OIL GAINS
Gold futures pulled back $14.60 last week, settling at $1,723.30 on the COMEX Friday; that left gold up 10.06% YTD. Oil is still hovering around $100: NYMEX crude finished Friday at $98.67, advancing 0.85% for the week.

STOCKS RETREAT FOR THE WEEK ON FRIDAY LOSSES

When the Dow’s worst day of 2012 brings only an 89-point loss, it seems the year is off to a good start. That loss occurred Friday after another stall in the Greek debt negotiations. On the week, the major U.S. indices pulled back a bit: DJIA, -0.47% to 12,801.23; S&P 500, -0.17% to 1,342.64; NASDAQ, -0.06% to 2,903.88.

Bill Losey’s Weekly Economic Update for February 6, 2012

admin — Mon, 06 Feb 2012 18:31:25 +0000

JOBLESS RATE DOWN TO 8.3%
Are we seeing a trend here? The unemployment rate has now fallen 0.8% in the last six months. We haven’t seen a descent this sharp and swift since 1984. January hiring blew away forecasts: the Labor Department said the economy added 243,000 jobs last month, while economists polled by Briefing.com expected non-farm payrolls to grow by 155,000 positions. The labor force hasn’t grown so much in a month since last April, and the numbers are making analysts wonder if the Federal Reserve will tinker with interest rates months ahead of expectations.

HOUSEHOLDS SAVE FIRST, SPEND SECOND
Consumer spending was flat in December after gains of just 0.1% in November and October. More significantly, consumer incomes rose 0.5% for December and so did the personal savings rate. People essentially put the extra money in the bank. In related news, the federal government estimated 2011 GDP at 1.7%, about half of the economic growth seen in 2010.

BOTH ISM INDEXES RISE
The Institute for Supply Management’s closely watched purchasing manager indexes signaled expanding service and manufacturing sectors in January. ISM’s service sector PMI improved 3.8% to 56.8. Its manufacturing PMI advanced 1.0% to 54.1.

CASE-SHILLER INDEX DECLINES AGAIN
This was the third straight monthly dip for the 20-city roundup of residential home prices. The latest available edition (November) showed a 1.3% monthly retreat in prices with a 3.7% year-over-year drop.

NASDAQ TOPS 2,900
The tech-heavy index closed at an 11-year high Friday: 2,905.66. The Dow settled at 12, 862.23 at week’s end, its best close since May 2008. The S&P 500 finished Friday at 1,344.90. The weekly gains: DJIA, 1.59%; S&P, 2.17%; NASDAQ, 3.16%.

Bill Losey’s Weekly Economic Update for January 30, 2012

admin — Mon, 30 Jan 2012 18:20:59 +0000

ECONOMY GROWS 2.8% in Q4
While this is the best GDP reading since Q2 2010, the initial estimate from the Bureau of Economic Analysis still disappointed the markets. Many economists and investors were looking for growth of 3.0% or better. The majority of the growth actually came from increased inventories. Consumer spending rose 2.0% last quarter, with auto sales being the biggest factor. Durable goods orders did see 3.0% growth in December, putting them 45% above the recession low hit in April 2009.

DIPS IN New & PENDING HOME SALES
The number of signed home sale contracts fell 3.5% in December, according to the National Association of Realtors. Separately, a Census Bureau report showed that new home sales declined 2.2% in December.

MARQUEE sentiment INDEX at 11-MONTH PEAK
The Thomson Reuters/University of Michigan consumer sentiment index ended January at 75.0. This was way up from Decembers 69.9 mark, and it beat the 74.1 reading forecast by economists surveyed by Reuters.

PRECIOUS METALS GAIN ALLURE
At Fridays COMEX close, gold was +10.56% YTD, copper +13.18% YTD and silver +21.05% YTD. Crude futures finished last week at $99.56 per barrel on the NYMEX, putting oil merely at +0.74% YTD. (Retail gas prices were +3.67% for the month as of Friday.)

A STRONG MONTH COMES TO A CLOSE
With just a couple of trading days left, January is shaping up to be the best month for U.S. equities since October (see the YTD numbers below). Across last week, the S&P 500 rose 0.07% to 1,316.33 and the NASDAQ gained 1.07% to 2,816.55; the Dow slipped 0.47% to fall to 12,660.46.

Bill Losey’s Weekly Economic Update for January 23, 2012

admin — Mon, 23 Jan 2012 19:47:29 +0000

NO CONSUMER INFLATION INCREASE IN DECEMBER.
For the second month in a row, the Labor Department reported no advance in its Consumer Price Index. Core CPI did rise 0.1% last month. Across 2011, consumer prices rose 3.0%; last year was the most inflationary year since 2007. As for wholesale inflation, the Producer Price Index declined 0.1% in December.

MORE HOMES MOVING ON THE MARKET
The National Association of Realtors announced a 5.0% increase in existing home sales for December, with a 4.6% gain in sales of single-family houses. For all of 2011, existing home sales improved by 1.7% as the median sale price declined 3.9%. One negative real estate signal last week: in December, housing starts fell by 4.1%.

FEWEST INITIAL JOBLESS CLAIMS IN FOUR YEARS
The Labor Department said initial applications for jobless benefits dropped by 50,000 to 352,000 in the week ending January 14. That is the lowest number of initial claims taken in any week since April 2008.

GOLD GAINS 2% IN Five DAYS
Its 2.04% weekly advance on the COMEX led to a closing price of $1,664.00 Friday. Golds rise was not matched by oil (-0.37%) or the U.S. Dollar Index (-1.69%) last week. Oil ended the week at $98.33 a barrel on the NYMEX.

DOW RISES FOR A FOURTH STRAIGHT WEEK
Stocks have surprised many analysts this month, as Wall Street has paid more attention to earnings than to news from Europe. The weekly numbers: S&P 500, +2.04% to 1,315.38; NASDAQ, +2.80% to 2,786.70; DJIA, +2.40% to 12,720.48.

Bill Losey’s Weekly Economic Update for January 16, 2012

admin — Mon, 16 Jan 2012 21:27:02 +0000

AN UNDERWHELMING RETAIL SALES REPORT
Holiday shopping was strong or was it? The Census Bureaus newest monthly retail sales data indicated only a 0.1% gain for December. Yet in the big picture, 2011 was the best year for retail sales since 1999. Total retail sales rose 7.7% last year, online and catalog sales were up 10.6% and overall sales have now improved about 20% from the depths hit during the Great Recession.

CONSUMER SENTIMENT INDEX INCREASES
The University of Michigan’s preliminary January consumer sentiment survey showed further improvement, with a gain from 69.9 to 74.0; the best reading since last May and better than the 71.5 economists polled by Reuters anticipated.

NEW BEIGE BOOK NOTES IMPROVING ECONOMY
The Federal Reserves new economic snapshot of its 12 banking districts showed 11 noting economic growth. The anecdotal survey noted improvement in auto and retail sales, manufacturing and consumer spending in the last six weeks of 2011.

S&P CUTS CREDIT RATINGS OF 9 EU NATIONS
After U.S. markets closed Friday, Standard & Poors downgraded a third of the European Union: it took France from AAA to AA+, cut ratings for Austria, Slovakia, Slovenia and Malta by a notch and booted the ratings of Italy, Portugal, Spain and Cyprus down two notches. S&P said the EUs debt reduction plan lacks sufficient size or scope. Additionally, EU talks on restructuring Greek debt fell apart Friday.

STOCKS ON A WINNING STREAK
The S&P 500 posted its second straight weekly gain across January 9-13, rising 0.88% to 1,289.09. The DJIA rose 1.67% to 12,422.06 and the NASDAQ gained 1.36% to 2,710.67. Last week also saw gains for the U.S. Dollar Index (0.24%) and COMEX gold (0.87%).

Bill Losey’s Weekly Economic Update for January 9, 2012

admin — Mon, 09 Jan 2012 20:10:36 +0000

UNEMPLOYMENT DOWN TO 8.5%
In December, the jobless rate declined for the fourth straight month to its lowest level since February 2009. The Labor Department announced that the economy added 200,000 net new jobs last month, topping the consensus forecast of analysts polled by Reuters who expected a gain of 155,000. Separately, payroll processing firm ADP reported private sector firms hiring 325,000 workers in December. Whether Decembers boost reflects a seasonal hiring boom or not, Labor Department data indicates that private sector payrolls expanded by an average of 132,000 jobs per month during the second half of 2011.

MANUFACTURING, SERVICE SECTOR GAUGES RISE
According to the twin barometers of the Institute for Supply Management, the U.S. manufacturing and non-manufacturing sectors continued to expand last month. ISMs service sector PMI came in at 52.6, up 0.6% from the November reading; its manufacturing PMI rose to 53.9 from Novembers 52.7 mark.

BIG GAINS OUT OF THE GATE FOR GOLD & CRUDE
The first trading week of 2012 saw crude oil futures rise 2.73% to top $100 a barrel again; futures settled at $101.56 Friday on the NYMEX. Gold went back above the $1,600 level with a $50.30 weekly advance. Gold futures were up 3.21% for the week; Fridays closing price on the COMEX was $1,616.10.

STOCKS START 2012 WITH GAINS
Across January 3-6, the Dow rose 1.17% to 12,359.92, the NASDAQ climbed 2.65% to 2,674.22 and the S&P 500 advanced 1.61% to 1,277.81. Optimism prevailed despite more woes from the Eurozone: Fitch Ratings lowered Hungarys credit rating to junk status on Friday and the euro fell to a 16-month low versus the dollar.

Bill Losey’s Weekly Economic Update for January 2, 2012

admin — Mon, 02 Jan 2012 21:56:34 +0000

STOCKS IN 2011: DJIA +5.5%, S&P 500 ENDS FLAT

The Dow Jones Industrial Average bucked a global trend and advanced in 2011. The index rose 11.95% in the fourth quarter, a move that separated it from a pack of overseas benchmarks that finished the year with double-digit percentage losses. In terms of price return, the S&P 500 recorded its smallest annual change since 1947 (see below). The S&Ps total return for 2011 was +2.11%. With all the fears about Europe and the Federal Reserve keeping interest rates incredibly low, long-term Treasuries had their best year since 2008 with a total return of 33%.

CONSUMER CONFIDENCE BAROMETER RISES

The Conference Board’s index of consumer confidence saw a big jump north in December, soaring 9.3 points to 64.5. Economists surveyed by Reuters had expected it to come in at 58.3.

HOME SALE PRICES DOWN, HOME SALE CONTRACTS UP

The good news? The National Association of Realtors said its pending home sales index reached a 19-month peak in November, moving to 100.1 for a 5.9% annual gain. The bad news? The October edition of the S&P/Case-Shiller Home Price Index slipped 1.2% from its September level.

HIGHS & LOWS IN KEY COMMODITIES FOR 2011

Gold lost 10.48% for the month but went +10.23% for the year, in contrast to copper (-22.73%) and silver (-9.77%). Crude oil advanced 8.15% in 2011, while retail gas prices rose 6.41%. Notable yearly dives were made by natural gas (-32.15%) and cotton (-36.69%). The U.S. Dollar Index gained 1.56% on the year.

A MINOR RETREAT TO END THE YEAR

All three major U.S. stock indices lost ground in the last trading week of 2011. The four-day performances across December 27-30: DJIA, -0.62% to 12,217.56; NASDAQ, -0.52% to 2,605.15; S&P 500, -0.61% to 1,257.60.

Bill Losey’s Weekly Economic Update for December 26, 2011

admin — Mon, 26 Dec 2011 19:53:02 +0000

PAYROLL TAX HOLIDAY EXTENDED FOR 2 MONTHS
Friday, President Obama signed an extension of the payroll tax cut lasting through February 29. The stopgap legislation also extends long-term unemployment benefits through that date and postpones a 27% reduction in Medicare payments to doctors. The federal government will pay for the extenders by having Fannie Mae and Freddie Mac hike guarantee fees on new mortgages, a cost that will be passed on to those buying or refinancing a home in 2012.

GAINS IN HARD GOODS ORDERS, CONSUMER SPENDING
Novembers consumer spending increase was tiny: 0.1%. Wages advanced just 0.1% as well. However, last month also saw a 3.8% rise in durable goods orders (the best month for that indicator since July).

IMPROVED HOME SALES, HOUSING STARTS
The Census Bureau reported a 1.6% increase in new home purchases in November, with the new home inventory at its smallest since March 2006. Housing starts hit a 19-month peak in November, soaring 9.3% on the month. Existing home sales also improved notably in November, rising 4.0%; according to the National Association of Realtors, that was the best month since January.

CONSUMERS FEELING MERRIER
Decembers final Thomson Reuters/University of Michigan consumer sentiment survey came in at 69.9 compared with Novembers final 64.1 mark. That also beat the 68.0 estimate forecast by economists Reuters had surveyed.

A YEAR-END RALLY GETS ROLLING
Stocks showed definite momentum last week. The 5-day performances: DJIA, +3.60% to 12,294.00: NASDAQ, +2.48% to 2,618.64; S&P 500, +3.74% to 1,265.33. At the close on Friday, oil settled at $99.68 on the NYMEX, gold closed at $1,606.00 on the COMEX, retail gasoline prices had fallen 2.15% in the past 30 days and natural gas futures were at lows unseen in four years.

Bill Losey’s Weekly Economic Update December 19, 2011

admin — Mon, 19 Dec 2011 05:02:50 +0000

JOBLESS CLAIMS FALL TO 3-YEAR LOW
Last Thursday, the Labor Department announced that 366,000 Americans filed initial jobless claims in the week ending December 10, the lowest weekly figure since March 2008. This was a drop of 19,000 from the preceding week and refuted the expectations of some economists. This may be a sign that the jobless rate, currently at 8.6%, could be poised to fall further.

HAS INFLATION PEAKED?
The federal governments Consumer Price Index was flat in November after a 0.1% retreat in October. While core inflation rose 0.2% last month, the Federal Reserve now expects 1.7% inflation across 2012 compared to a projected 2.8% for 2011. Producer prices were up 0.3% in November; core PPI advanced 0.1%. The year-over-year rise in wholesale prices was 5.7%, the smallest 12-month gain since March.

RETAIL SALES RISE 0.2% in NOVEMBER
While many economists hoped for a bigger advance, the November increase marked the sixth straight monthly gain for the indicator. Lower gas prices may have left consumers with greater discretionary funds: on Friday, AAA said a gallon of regular unleaded averaged $3.25 nationally, 18.4% below a peak hit in early May.

GOLD & OIL TAKE A HIT
Gold lost a whopping 6.93% last week; oil fell 5.49%. Gold settled at $1,597.90 on the COMEX and oil closed Fridays NYMEX trading day at $93.87.

STOCKS PULL BACK
Citing the absence of a credible financial backstop in the EU debt crisis, Fitch Ratings downgraded France Friday and placed the credit ratings of Spain and Italy on review. It was a wan note to end a rough week, as these numbers point out: DJIA, -2.61% to 11,866.39; S&P 500, -2.83% t0 1,219.66; NASDAQ, -3.46% to 2,555.33.

Bill Losey’s Weekly Economic Update for December 12, 2011

admin — Mon, 12 Dec 2011 21:46:23 +0000

CONSUMERS FEEL BETTER IN EARLY DECEMBER Decembers initial University of Michigan consumer sentiment index is in, and the reading of 67.7 represents a six-month high. This is a 3.6% increase from the final November survey. The sub-index of consumer expectations (which some regard as an indicator of future consumer spending) improved from 55.4 to 61.1. In other positive news for households, retail gas prices hit a low unseen since February on December 5, according to the American Automobile Association, $3.27 was the national average for a gallon of regular unleaded.

SERVICE SECTOR GROWTH MODERATES
The 52.0 reading on the Institute for Supply Managements November service sector index was the lowest since January 2010. Anything above 50 still denotes expansion, but the reading disappointed investors; economists polled by Reuters had forecast a 0.6% gain to 53.5.

MORTGAGE APPS RISE ALMOST 13%
The Mortgage Bankers Association reports that home loan demand hit a four-month peak in the week of November 28-December 2. According to Freddie Macs latest figures, the average rate on the 15-year FRM was 3.27% last week; interest rates on 30-year FRMs averaged 3.99%.

GOLD & OIL RETREAT FOR THE WEEK
espite strong Friday gains, oil and gold both had down weeks. Oil futures slipped 1.54% across five days to $99.41 while gold futures lost $34.20 across the same time frame to settle at $1,712.80 per ounce on the COMEX December 9.

RALLY REACHES TWO WEEKS
A new EU fiscal treaty helped stocks push north Friday, (even with the UK opting out of the deal). Across December 5-9, the DJIA gained 1.37%, the S&P 500 0.88% and the NASDAQ 0.76%. At the close on Friday, the Dow was at 12,184.26, the S&P at 1,255.19, and the NASDAQ at 2,646.85.

Bill Losey’s Weekly Economic Update for December 5, 2011

admin — Mon, 05 Dec 2011 20:57:23 +0000

JOBLESS RATE FALLS TO 8.6%
In November, U.S. unemployment hit its lowest level since March 2009. Novembers net job gain was 120,000. While the Bureau of Labor Statistics report showed that the majority of the new hires were made by retailers and temp agencies, this is still a sign of recovery. The underemployment rate fell to 15.6% from the prior 16.2%.

SOME (MOSTLY) POSITIVE HOUSING NEWS
Pending home sales soared 10.4% in October, the National Association of Realtors reported. New home sales also were up 1.3% in that month according to the Census Bureau. The September edition of the S&P/Case-Shiller Home Price Index showed price gains in 14 of 20 metro markets; the index gained 0.1% in the third quarter, but was down 3.9% from a year ago.

MANUFACTURING SECTOR EXPANDS
The Institute for Supply Managements manufacturing index showed sector growth in November. It came in at 52.7; economists polled by Briefing.com had forecast it would read 51.0.

OIL TOPS $100 AGAIN, GOLD ADVANCES
Crude prices ended the week at $100.96 on the NYMEX, going up 4.33% in five days. Gold futures had their best week in more than a month (+3.64%) and settled at $1747.00 Friday.

S&P 500 GAINS 7.4% IN 5 DAYS
The index had its best week since March 2009, going +7.39% to settle at 1,244.28 Friday. A coordinated central bank move to make cheaper dollar loans available to EU lenders set off a massive Dow rally Wednesday, a big factor behind great weeks for the DJIA (+7.01 to 12,019.42) and NASDAQ (+7.59% to 2,626.93).

Bill Losey’s Weekly Economic Update for November 28, 2011

admin — Mon, 28 Nov 2011 19:30:09 +0000

A TINY INCREASE IN CONSUMER SPENDING
Personal spending advanced by just 0.1% in October, the smallest gain in four months, as measured by the Commerce Department. Hopefully a strong Black Friday and Cyber Monday will make November a different story. In better news, personal incomes rose 0.4% last month, the best month for that statistic since March. Americas savings rate increased 0.2% to 3.5%.

HOUSEHOLD CONFIDENCE RISES
Americans seems to be feeling less pessimistic about the economy. The final November Thomson Reuters/University of Michigan consumer sentiment survey came in at 64.1, much better than the final October mark of 60.9.

HOME SALES, DURABLE GOODS ORDERS ENCOURAGE
The National Association of Realtors reported a 1.4% increase in existing home sales in October and a 2.2% monthly reduction in the backlog of unsold properties, taking the inventory down to 8.0 months. Overall hard goods orders declined 0.7% in October but were up 0.7% with transportation orders factored out; economists polled by Bloomberg News had expected a 1.2% overall monthly retreat.

GOLD DIPS UNDER $1,700
The precious metal slipped2.27% last week, and it is down 5.71% in the past two weeks; prices settled at 1,685.50 an ounce. Oil lost 0.92% last week on the NYMEX to settle at $96.77 at closing.

BUYERS CROWD THE MALLS, BUT NOT WALL STREET
Stocks were hit hard during a short trading week by two developments: the failure of the super committee on Capitol Hill and a German bond auction at which 35% of the 10-year notes offered went unsold. The numbers for the week: DJIA, -4.78% to 11,231.78; S&P 500, -4.69% to 1,158.67; NASDAQ, -5.09% to 2,441.51.

Bill Losey’s Weekly Economic Update for November 21, 2011

admin — Tue, 22 Nov 2011 00:46:26 +0000

CONSUMER PRICES RETREAT IN OCTOBER
For the first month since June, consumer inflation decreased. The biggest influence on the 0.1% decline in the Consumer Price Index? Falling retail gasoline prices. New car prices also saw their biggest one-month drop in nearly two years. Core CPI rose 0.1% in October; annualized inflation lessened to 3.5% with annualized core CPI at 2.1%. Producer prices declined last month as well, going -0.3% after a +0.8% September showing; core PPI was flat in October.

RETAIL SALES, HOUSING STARTS, LEI ALL ENCOURAGE
The Commerce Department said U.S. retail purchases increased by 0.5% in October – the fifth consecutive monthly gain. While overall housing starts declined 0.3% last month, single-family home construction improved by 5.1%. October housing permits were 17.7% above year-ago levels. The Conference Board’s index of leading economic indicators rose a striking 0.9% in October, with the boost in home construction a key factor.

GOLD & OIL PRICES SLIDE
In fact, gold had its roughest trading week since September, with prices pulling back 3.5% to $1,720.10 at Friday’s COMEX close. Oil prices also descended: crude settled at $97.41 per barrel on the NYMEX at week’s end.

STOCKS LOSE SOME GROUND
Investors weren’t buying much last week, what with one eye on Europe and another on the “super committee” impasse in Congress. The Dow, S&P 500 and NASDAQ all pulled back for the week as follows: DJIA, -2.94% to 11,796.23; S&P 500, -3.81% to 1,215.67; NASDAQ, -3.97% to 2,572.50.

Bill Losey’s Weekly Economic Update for November 14, 2011

admin — Mon, 14 Nov 2011 15:40:55 +0000

ACTIONS IN GREECE & ITALY CALM MARKETS
Global investors seemed reassured at the end of last week by developments in the European Union. By Friday, Greek prime minister George Papandreou had stepped down; Italian prime minister Silvio Berlusconi’s resignation was at hand. Greek prime minister designate Lucas Papademos and a new coalition government will now be charged with implementing austerity cuts as Greece accepts the EU’s latest €130 billion aid package. Italy’s senate passed new economic reforms at the end of the week aimed at reducing its sovereign debt. Italy’s treasury was also able to sell €5 billion of one-year notes , albeit at 6.09% interest.

A BIG REBOUND IN CONSUMER CONFIDENCE
The preliminary November consumer sentiment index from the University of Michigan was a nice surprise. It came in at 64.2; far better than the final mark of 60.9 for October and the 61.3 consensus forecast of economists polled by Briefing.com. The reading hasn’t been this high since June. The future expectations sub-index improved to 56.2 from the previous 51.8.

OIL PUSHES TOWARD $100 AGAIN
On Veterans Day, oil futures settled at $98.99 on the NYMEX after a +5.02% week that saw prices rise $3.25 across Thursday and Friday. Gold prices posted a weekly gain as well: the precious metal gained 1.83% on the COMEX for the week, and that brought its 3-week advance to 9.32%.

STRONG FRIDAY PUTS DOW BACK IN THE BLACK
The DJIA climbed 260 points on Friday after rising 113 points on Thursday, almost offsetting Wednesday’s 389-point descent. That left it at +4.98% YTD. Last week’s performances: DJIA, +1.42% to 12,153.68; S&P 500, +0.85% to 1,263.85; NASDAQ, -0.28% to 2,678.75.

Bill Losey’s Weekly Economic Update for November 7, 2011

admin — Mon, 07 Nov 2011 22:35:48 +0000

JOBLESS RATE DECREASES TO 9.0%
Economists surveyed by Bloomberg News had expected unemployment to stay at 9.1% in October, so this was a nice development. Still, this latest jobs report had something in common with its predecessors: underwhelming job growth. Non-farm payrolls expanded by 80,000 positions last month, but that fell short of the 95,000 new jobs envisioned in the consensus Bloomberg forecast. On the bright side, the percentage of underemployed Americans fell from 16.5% to 16.2% and the long-term unemployed (those out of work for at least 27 weeks) shrank to 42.4% of the jobless population, the lowest percentage since November 2010.

BOTH ISM INDICES MOVE LOWER
The Institute for Supply Management’s purchasing manager indexes were both above 50 in October, but not quite where they were at a month before. The ISM manufacturing index slipped from 51.6 to 50.8; its service sector index ticked down to 52.9 from the preceding 53.0. The service sector employment gauge improved by 4.6% and moved from 48.7 in September (contraction) to 53.3 (expansion).

GOLD & OIL POST WEEKLY GAINS
Oil futures advanced 1.01% last week to settle at $94.26 per barrel on the NYMEX Friday. Prices have jumped 19.02% over the past five weeks of trading. Gold logged a 0.52% gain last week, closing at $1,755.30 an ounce on the COMEX Friday.

GREEK THEATRE PREOCCUPIES WALL STREET
The whims of Greek Prime Minister George Papandreou affected stocks more than anything last week: first he announced a public vote on the latest austerity cuts for the nation, reconsidered it, and then prepared to step down Friday amid concerns that he might change his mind. As these weekly performance numbers show, bears were roaming last week: DJIA, -2.03% to 11,983.24; S&P 500, -2.48% to 1,253.23; NASDAQ, -1.86% to 2,686.15.

Bill Losey’s Economic Update for October 31, 2011

admin — Mon, 31 Oct 2011 16:06:53 +0000

HOUSEHOLDS 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.

CONTRASTING CONSUMER SENTIMENT FINDINGS
October’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.

NEW 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.

A TERRIFIC WEEK FOR STOCKS
Last 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.

Bill Losey’s Weekly Economic Update for October 24, 2011

admin — Mon, 24 Oct 2011 19:27:44 +0000

ANNUALIZED INFLATION HITS 3.9%
So noted the Bureau of Labor Statistics last week. The Consumer Price Index rose 0.3% during the month of September, with core CPI rising 0.1%, the smallest such increase in six months. (Annualized core consumer inflation was at 2.0%.) The Producer Price Index climbed 0.8% for September after a flat August.

HOMEBUYING TAPERS OFF IN SEPTEMBER
Existing home sales decreased by 3.0% last month, according to the National Association of Realtors. At this rate, about 4.91 million previously occupied homes will be sold in 2011, matching the total for 2010. In a normal year, about 6 million residential resales occur in the real estate sector.

HOUSING STARTS UP 15%
Here’s a good sign for residential real estate: a sign of demand. Most of the 15.0% monthly increase in September came from apartment construction; the Commerce Department reported a 53% monthly jump in that category. Single-family construction improved by 1.7%. Overall, there were 658,000 housing starts last month, the best number in any month since April 2010.

DOW EXTENDS WINNING STREAK
Wall Street rallied Friday on the eve of the crucial summit meeting to address the Eurozone debt crisis, helped by news that a new aid package for Greece had been approved by EU finance ministers. The DJIA gained ground for the fourth week in a row; the S&P 500 also advanced. The weekly numbers: S&P 500, +1.12% to 1,238.25; DJIA, +1.41% to 11,808.79; NASDAQ, -1.14% to 2,637.46.

Bill Losey’s Weekly Economic Update for October 17, 2011

admin — Mon, 17 Oct 2011 20:33:48 +0000

RETAIL SALES JUMP MOST IN 7 MONTHS
On Friday, the Commerce Department said overall U.S. retail spending improved 1.1% in September, with auto sales rising 3.6% for the month and department store sales up 1.1%. August retail sales – previously recorded as flat – were revised north to a 0.3% gain.

UMICH SENTIMENT SURVEY SHOWS A DECLINE
The University of Michigan’s initial October consumer sentiment poll came in 57.5, under the final September reading of 59.4. As the Wall Street Journal noted, consensus forecasts expected a reading of around 60.

GOLD & OIL REBOUND IMPRESSIVELY
NYMEX crude futures rose 4.60% last week, settling at $86.80 a barrel on Friday and putting oil up 9.60% so far for October. Gold futures settled at $1,681.80 on the COMEX Friday, capping the best week for the metal since the start of September – a 2.89% five-day advance.

DOW, NASDAQ GET BACK IN THE BLACK FOR 2011
As the European Union seemingly progressed toward a solution to its debt crisis, clouds parted on Wall Street. It was a great week for U.S. equities, as these numbers show: S&P 500, +5.98% to 1,224.58; DJIA, +4.88% to 11,644.49; NASDAQ, +7.60% to 2,667.85. Friday, the CBOE VIX closed below 29 and all three of the major indices closed at 10-week highs.

Bill Losey’s Weekly Economic Update October 10, 2011

admin — Mon, 10 Oct 2011 17:29:12 +0000

HIRING IMPROVES…WITH A FOOTNOTE
Economists polled by MarketWatch had expected non-farm payrolls to increase by 59,000 for September. In a nice surprise, the economy added 103,000 jobs. However, 45,000 of those “hires” were actually striking Verizon employees returning to work. The unemployment rate remained at 9.1% for the third straight month. The Department of Labor revised the July and August jobs reports to include a cumulative 99,000 new hires.

ONE ISM INDEX RISES, ANOTHER RETREATS
The start of the month brings fresh PMIs from the Institute for Supply Management. ISM’s service sector index lost 0.3 points between August and September, but the reading for last month came in at a decent 53.0. Its manufacturing index rose a full percentage point in September to 51.6.

AUTO SALES PICK UP
September’s Commerce Department report showed big demand for domestic car brands: Ford sales rose 9%, GM sales 20% and Chrysler sales 27%. Overall U.S. auto sales were 9.9% improved from September 2010.

RATES ON 30-YEAR FRMS DIP BELOW 4%
Those who can qualify for a refi or want to chance buying will find the lowest home loan rates on record right now. Freddie Mac’s October 6 Primary Mortgage Market Survey reported an average interest rate of 3.94% for conventional 30-year home loans and 3.26% for 15-year fixed-rate mortgages.

OVERSEAS DECISIONS HELP STOCKS REBOUND
Last week, the European Central Bank announced it would address the EU debt crisis with year-long loans and covered bond purchases. That news and some mildly positive stateside indicators sent stocks higher. Last week’s performances: S&P 500, +2.1% to 1,155.46; DJIA, +1.7% to 11,103.12; NASDAQ, +2.7% to 2,479.35.

Bill Losey’s Weekly Economic Update for October 3, 2011

admin — Mon, 03 Oct 2011 16:57:11 +0000

AMERICANS SPEND A BIT MORE, EARN A BIT LESS
In August, personal spending improved by 0.2% while personal incomes retreated by 0.1%. This was the first monthly decline in household incomes since October 2009; July’s household earnings gain was revised down to 0.1%.

AN IMPROVEMENT IN CONSUMER SENTIMENT
September’s final University of Michigan consumer sentiment survey came in at 59.4, much better than the final August mark of 55.7 and topping the consensus forecast of 57.8 from economists surveyed by Bloomberg News. The Conference Board’s consumer confidence index ticked up 0.2% to 45.4 this month.

DURABLE GOODS DEMAND HOLDS UP IN AUGUST
The Commerce Department said overall hard goods orders declined 0.1% in August, but a closer look revealed some positives. Core capital goods orders (excluding the aircraft and transportation sectors) improved by 1.1% and core capital goods shipments were up by 2.8%.

SURVEYING THE REAL ESTATE SECTOR
New home sales slipped 2.3% in August but showed a 6.1% annual gain, according to the Census Bureau. The same trend held true for pending home sales: the National Association of Realtors said they were down 1.2% for August but up 7.7% from a year before. The Standard & Poor’s/Case-Shiller home price index rose 0.9% in July with prices 4.1% underneath July 2010 levels.

MIXED WEEK CLOSES OUT TOUGH MONTH
September saw major losses for the Dow (-6.03%), NASDAQ (-6.36%) and S&P 500 (-7.18%). Last week’s numbers showed the blue chips rising: DJIA, +1.32% for the week to settle Friday at 10,913.38; NASDAQ, -2.73% last week to 2,415.40; S&P 500, -0.44% last week to 1,131.42.

Bill Losey’s Weekly Economic Update for September 26, 2011

admin — Mon, 26 Sep 2011 18:46:05 +0000

INVESTORS SEEK CASH, WATCH POLICY MOVES
Stocks tumbled last week as Wall Street shrugged off news of the Federal Reserve’s move to direct $400 billion into longer-term Treasuries and wondered if Europe’s debt troubles might trigger a recession. At mid-week, the Federal Reserve and International Monetary Fund managing director Christine LaGarde both noted “downside risks” to the U.S. and world economies. Thursday night, finance ministers and central bank governors from the Group of 20 pledged they would make a “strong and coordinated international response to address the renewed challenges facing the global economy” – a welcome declaration, yet the S&P 500 still slipped more than 6% on the week.

EXISTING HOME SALES UP 7.7% IN AUGUST
This was a pleasant surprise. The National Association of Realtors also noted an 18.6% year-over-year improvement in residential resales. Housing starts were also up 3.2% last month, according to a Census Bureau report.

CONFERENCE BOARD LEADING INDICATORS RISE
The global research group said its index rose 0.3% last month. However, a sizable part of that gain was due to a rise in M2 money supply – Americans boosting their bank accounts and cash positions.

BLEAK WEEK FOR GOLD & CRUDE
Commodities took a beating last week as the dollar strengthened. Gold lost 9.64% last week (and $101.70 on Friday) to end the trading week at $1,637.50 an ounce. Oil fell 9.45% last week, with futures settling at $79.85 per barrel Friday.

CONFIDENCE TAKES A HOLIDAY
Buyers were scarce last week on Wall Street, as these weekly performances point out: S&P 500, -6.54% to 1,136.43; NASDAQ, -5.30% to 2,483.23; DJIA, -6.41% to 10,771.4

Bill Losey’s Weekly Economic Update for September 19, 2011

admin — Mon, 19 Sep 2011 14:24:51 +0000

CPI, PPI TELL DIFFERENT STORIES
According to the Bureau of Labor Statistics, the Consumer Price Index rose 0.4% in August – and annualized inflation came in at 3.8%, the highest rate in nearly three years. Annualized core inflation was +2.0% given a 0.2% rise in core CPI last month. On the other hand, producer prices showed the smallest annual gain since March: in August, they were up 6.5% year-over-year, compared to a 7.3% differential in May. The overall Producer Price Index was flat last month; core PPI went +0.1%.

RETAIL SALES UNCHANGED FOR AUGUST
U.S. retail sales were flat last month, and that news from the Commerce Department wasn’t surprising in light of the recent pressures on household spending. This comes after (revised) gains of 0.2% in June and 0.3% in July.

CONSUMERS FEEL A BIT MORE OPTIMISTIC
The University of Michigan’s initial September consumer sentiment survey showed some improvement: it came in at 57.8, up from the troublingly low 55.7 final August reading. Economists polled by Dow Jones Newswires had expected a rise to 57.0.

GOLD DROPS, OIL ADVANCES
Gold futures went -2.39% last week, part of a 3.29% two-week decline. The precious metal settled at $1,812.1o an ounce on the COMEX Friday. NYMEX crude closed at $87.96 a barrel Friday, going +0.83% last week and +6.93% in the last four weeks.

CENTRAL BANK PLEDGE GIVES STOCKS A LIFT
Thursday, the Federal Reserve and four other central banks stated they would offer 3-month dollar loans to European commercial lenders to help them address any 4Q dollar liquidity problems. This aided a rally: U.S. stocks rose each day last week. The S&P 500 had its best week since late June (+5.35%), settling at 1,216.01 Friday. The NASDAQ (+6.25% to 2,622.31) and the Dow (+4.70% to 11,509.09) also climbed.

Bill Losey’s Weekly Economic Update for September 12, 2011

admin — Mon, 12 Sep 2011 15:05:50 +0000

WILL CONGRESS PASS THE $447 BILLION JOBS PLAN?
Thursday, President Obama challenged Congress to swiftly approve the American Jobs Act – a plan that would cut the payroll tax for workers and businesses to 3.1% in 2012 and offer tax credits as large as $4,000 to companies hiring people out of work for more than 6 months. If passed, the AJA would also pour about $80 billion into public works projects and extend long-term jobless benefits. A written response from House Speaker John Boehner (R-OH) and three other key Republican leaders noted that the plan will be quickly considered, but cited a need to “find common ground” and an assumption that the bill was not “an all-or-nothing proposition.”

ISM SERVICES INDEX TOPS FORECASTS
Economists polled by Bloomberg News thought that the Institute for Supply Management’s non-manufacturing index would fall to 51.o in August. Instead, it bettered the 52.7 reading from July. The 53.3 August reading indicates some expansion in the industries that account for roughly 90% of the economy.

BEIGE BOOK REPORTS TEPID OVERALL GROWTH
The latest Federal Reserve review of 12 U.S. economic regions noted expansion “at a modest pace, though some districts noted mixed or weakening activity.” Five regions reported some growth in July and August. Analysts wonder if this latest Beige Book is one more factor that could prompt the Fed to ease monetary policy.

RECORD LOW YIELD FOR THE 10-YEAR NOTE
The benchmark Treasury yield decreased to 1.89% last Thursday, the lowest yield ever recorded by the Federal Reserve. The yield closed at 1.92% Friday.

STOCKS ALTERNATELY SOAR, SWOON
Rumors of an imminent default in Greece thwarted any weekly gain for U.S. stocks. The S&P 500 finished the week at 1,154.23, while the NASDAQ and DJIA respectively ended the week at 2,467.99 and 10,992.13. As of Friday, the Dow had traded in a triple-digit range in 19 of the past 24 market days.

Bill Losey’s Weekly Economic Update for September 5, 2011

admin — Tue, 06 Sep 2011 15:48:46 +0000

NO JOB GAINS IN AUGUST
In August, nonfarm payroll employment totaled 131.1 million – as it did in July. The Labor Department measured no job growth in the economy for the first time since September 2010. Additionally, employers reduced the average work week slightly to 34.2 hours. The unemployment rate remained at 9.1% last month.

CONSUMER SPENDING IMPROVES BY 0.8%
This hugely encouraging July figure from the Commerce Department trounced forecasts and represented the best month for the statistic since February. Personal incomes improved by 0.3% in July; the personal savings rate hit a four-month low.

PENDING HOME SALES DOWN, HOME PRICES UP
The National Association of Realtors announced pending home sales had declined by 1.3% in July following three months of gains. The number of sales contracts was still 14.4% better than a year before. July’s Case-Shiller Home Price Index was notable for indicating a 3.6% 2Q gain in home prices, though the index was still down 5.9% year-over-year.

MANUFACTURERS SIGNAL MINOR EXPANSION
The Institute for Supply Management’s August purchasing manufacturers index ticked down to 50.6 from July’s 50.9 mark. So the sector is growing, but not by much (50 is the line between expansion and contraction). The new orders sub-index improved 0.4% to 49.6.

STOCKS GIVE BACK SOME GAINS
While the NASDAQ managed a 0.02% advance last week to settle at 2,480.33 on Friday, the S&P 500 and Dow had minor weekly losses. The DJIA retreated 0.39% to a Friday close of 11,240.26, and the S&P pulled back 0.24% to settle Friday at 1,173.97. Gold futures gained 4.43% on the week – prices jumped $47.70 on Friday alone.