Centaurus Financial® Presents: WEEKLY ECONOMIC UPDATE – MAY 23, 2011
HOME SALES, HOUSING STARTS SLIP
Existing home sales decreased 0.9% in April, according to the National Association of Realtors. Annually, sales were off 12.9% from the pace of April 2010 (back when the homebuyer tax credit was in effect). The national median existing home price last month was $163,700, 5.0% below where it was a year before. The inventory of unsold residences increased to a 9.2-month supply, up from an 8.3-month supply in March. A new release from the Commerce Department said housing starts declined by 10.6% in April; building permits decreased by 4.0% last month.1,2
CONFERENCE BOARD LEI INDEX DECLINES
The CB’s Leading Economic Index retreated in April for only the second time since March 2009. The 0.3% slip came after the index rose 0.7% in March and 0.9% in February. On the bright side, the CB’s coincident (i.e., current) economic index improved for the third straight month in April.3
GOLD GETS BACK ABOVE $1,500; GAS PRICES FALL
On Friday, gold prices topped the $1,500 level for the first time since May 12 – the settlement price on the COMEX was $1,508.90 an ounce, concluding a 1.0% advance for the week. Silver pulled off a 0.3% gain last week to settle Friday at $35.09 an ounce. Crude oil fell 0.2% on the week; retail gas prices decreased by almost $0.10 last week, according to AAA’s Fuel Gauge Survey. 4,5,6
STOCKS RETREAT ON INDICATORS, DEBT ISSUES
Investors were largely left cold by this week’s economic reports, and anxieties over the debt of Spain and Greece also affected Wall Street. So, all three major U.S. indexes moved south. On the week, they performed like this: DJIA, -0.66% to 12,512.04; S&P 500, -0.77% to 1,333.27; NASDAQ, -0.71% to 2,803.32. In 2011, we are seeing selling in May: the DJIA and S&P 500 are currently on three-week losing streaks.7
THIS WEEK: Monday offers 1Q earnings from Campbell Soup, and Wall Street will also be eyeing the elections in debt-burdened Spain. Tuesday, we have the report on April new home sales. Wednesday brings us news about April durable goods orders, plus 1Q results out of Costco and Polo Ralph Lauren. Thursday provides weekly jobless claims data along with 1Q results from Sony and BigLots. The major economic releases of the week all arrive Friday: reports on April consumer spending and pending home sales, plus the final May consumer sentiment poll out of the University of Michigan.
This information should not be construed as tax, legal, or investment advice. 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 (S&P 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.
Citations.
1 – realtor.org/press_room/news_releases/2011/05/sales_ease [5/19/11]
2 – marketwatch.com/story/us-housing-starts-decline-106-in-april-2011-05-17 [5/17/11]
3 – conference-board.org/data/bcicountry.cfm?cid=1 [5/19/11]
4 – marketwatch.com/story/gold-futures-advance-in-tug-of-war-market-2011-05-20 [5/20/11]
5 – marketwatch.com/story/crude-oil-futures-retake-some-lost-ground-2011-05-20 [5/20/11]
6 – consumeraffairs.com/news04/2011/05/price-of-gasoline-down-a-dime-in-last-week.html [5/20/11]
7 – cnbc.com/id/43113773 [5/20/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F20%2F10&x=0&y=0 [5/20/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F20%2F10&x=10&y=18 [5/20/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F20%2F10&x=0&y=0 [5/20/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F19%2F06&x=0&y=0 [5/20/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F19%2F06&x=0&y=0 [5/20/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F19%2F06&x=0&y=0 [5/20/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F21%2F01&x=0&y=0 [5/20/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F21%2F01&x=0&y=0 [5/20/11]
8 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F21%2F01&x=0&y=0 [5/20/11]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/20/11]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/20/11]
10 – treasurydirect.gov/instit/annceresult/press/preanre/2001/ofm11001.pdf [1/10/01]
11 – montoyaregistry.com/Financial-Market.aspx?financial-market=who-should-inherit-your-ira-andor-401k&category=22 [5/22/11]
