Presented by Mark Lund

Quote of the week. “The softest things in the world overcome the hardest things in the world.” – Lao-Tzu

Is real estate recovering? Existing home sales are up for the third straight month. The National Association of Realtors had residential resales up by 3.6% in June – 0.2% under last year’s pace, but still an encouraging sign. Prices are a motivation – nationally, the median existing home sale price was $181,800 last month.¹

Gas guzzler round-up gets underway. The federal government’s CARS program (informally known as “cash for clunkers”) officially began over the weekend, with $3,500/$4,500 credits available to new car buyers who drive in 1984-or-newer autos that average 18 MPG or less. The program will run until November 1 or until the $1 billion in federal rebates run out. You can visit cars.gov to determine whether you have a qualifying vehicle.²

Oil & gold have a good week. Crude oil futures gained 5.37% last week to finish at $68.05 per barrel on the NYMEX Friday. In the latest AAA gas prices survey, a gallon of regular unleaded averaged $2.470 nationally as opposed to $4.026 a year before. (However, gasoline futures gained 8.25% last week.) Gold settled at $953.10 per ounce Friday, wrapping up a 1.66% weekly gain.³

Indication of hope. Could the recession have ended already? The Conference Board’s index of leading economic indicators increased 0.7% for June (the third consecutive monthly gain, marking the best performance since January 2002, which was two months after the conclusion of the last recession). The coincident-to-lagging indicators in the index also increased for the third month in a row.⁴

9,000 … 2,000? … 1,000? The Dow topped 9,000 last week, and the NASDAQ and S&P 500 may surpass the 2,000 and 1,000 benchmarks if the rally continues. The NASDAQ lost ground Friday to end a 12-session win streak and close the week at 1,965.96. The S&P 500 stood at 979.26 at Friday’s close; the Dow ended Friday’s market day at 9,093.24.⁵

(Source: CNNMoney.com, ustreas.gov, treasurydirect.gov, bls.gov, 7/24/09)^6,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Riddle of the week. What can fill a room, yet takes up no physical space?

Contact my office or see next week’s Update for the answer.

Last week’s riddle answer: 12 times; 12 X $2 = $24. The coin came up tails the remaining 8 times; 8 x $3 = $24. So they were all even after 20 coin flips.

These views are not the views of Sammons Securities Company, LLC, and should not be construed as 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. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx^®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) 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. 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. The 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Citations.
1 news.bostonherald.com/business/real_estate/view/20090723existing-home_sales_show_promise/srvc=home&position=recent                [7/23/09]
2 latimes.com/business/la-fi-clunkers25-2009jul25,0,4520824.story [7/2409]
3 cnbc.com/id/32130526/page/2/       [7/24/09]
4 bloomberg.com/apps/news?pid=20601087&sid=aHisOoFaeD.U               [7/22/09]
5  cnbc.com/id/32129064     [7/24/09]
6  money.cnn.com/data/markets/dow/              [7/24/09]
6  money.cnn.com/data/markets/nasdaq/        [7/24/09]
6 money.cnn.com/data/markets/sandp/?         [7/24/09]
6 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=7%2F24%2F08&mode=add&symb=DJIA                                [7/24/09]
6 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=7%2F23%2F04&mode=add&symb=DJIA [7/24/09]
6 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=7%2F23%2F99&mode=add&symb=DJIA [7/24/09]
6 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=7%2F24%2F08&mode=add&symb=COMP              [7/24/09]
6 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=7%2F23%2F04&mode=add&symb=COMP              [7/24/09]
6 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=7%2F23%2F99&mode=add&symb=COMP               [7/24/09]
6 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=7%2F24%2F08&mode=add&symb=SPX                  [7/24/09]
6 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=7%2F23%2F04&mode=add&symb=SPX                  [7/24/09]
6 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=7%2F23%2F99&mode=add&symb=SPX  [7/24/09]
7 ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [7/24/09]
8 treasurydirect.gov/RI/OFAuctions  [7/24/09]
9 bls.gov/news.release/history/cpi_08171999.txt            [8/17/99]

Presented by Mark Lund

Quote of the week. “Life is like a ten-speed bicycle. Most of us have gears we never use.” – Charles Schulz

Stocks come roaring back. The story of the week was the rally on the Street. The Dow, NASDAQ and S&P 500 regained momentum and performed spectacularly in response to encouraging earnings reports. The S&P 500 gained 6.97% last week, the DJIA 7.33% and the NASDAQ 7.44%. The Russell 2000 topped all three, rising 7.95%. The Information Technology sector of the S&P 500 shot up 9.56% for the week – and as of Friday’s close, that sector was up 31.15% on the year.¹

Housing starts hit 7-month high. They increased by 3.6% in June. Construction on single-family homes rose 14.4% from May levels, to a high unseen since December 2004. The Commerce Department also said applications for building permits jumped 8.7% last month.²

PPI jumps 2x expectations. Producer prices leapt 1.8% in June, the biggest month-to-month jump since November 2007. You can attribute much of that to rising energy prices. Core PPI went north by 0.5%.³

CPI up 0.7% for June. Analysts had forecast a 0.6% rise. Core CPI (minus food and energy prices) went up 0.2%. However, consumer prices were 1.4% below June 2008 levels, the Labor Department noted.⁴

Gold & oil join the rally. Gold futures rounded out Friday at $937.50 per ounce – a 2.7% gain on the week. Oil rose 6.1% from Monday to Friday to settle at $63.56 per barrel on the NYMEX. ⁵

Stocks up 39% from March 9. That is where last week’s rally put the S&P 500. Since July 8, 38 companies in that index have released 2Q earnings reports, and those 38 firms posted earnings that beat analysts’ forecasts by an average of 16%.⁶

(Source: CNNMoney.com, ustreas.gov, 7/17/09)^7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Riddle of the week. Mike challenges Keith to flip a coin 20 times. Each time the coin comes up heads, Mike pays Keith $2.00. Each time it comes up tails, Mike earns $3.00 from Keith. After 20 coin flips, the end result is that no money changes hands. How many times did the coin come up heads?

Contact my office or see next week’s Update for the answer.

Last week’s riddle answer: Your temper. 

Presented by Mark Lund

Quote of the week. “You can never plan the future by the past.” – Edmund Burke

GM leaves bankruptcy. That was fast. (Six weeks, to be precise.) Friday, General Motors CEO Fritz Henderson announced the birth of the “new” GM, but made no promise that it would repay the $50 billion loaned or pledged by its new majority owner … the U.S. government. It is unlikely that GM’s stock will publicly trade until 2010 or later; it has a 2015 deadline to pay back roughly $6.7 billion in federal loans.¹

U.S. trade deficit shrinks impressively. It narrowed by 9.8% in May to $26 billion – the slimmest trade deficit since November 1999. Analysts had expected it to grow. Moody’s Economy.com chief economist Mark Zandi called the finding “consistent with the idea that the U.S. recession will come to an end in the next few months.”²

Less contraction in the services sector? Yes, at least in June. The Institute for Supply Manufacturing services index read 47.0 for the month, improved from 44.0 in May and beating the 46.0 mark forecast by analysts.³

Wholesale inventories down 0.8% in May. This was less of a decrease than economists expected; chalk it up to non-durable goods inventories (including oil and crops) growing by 0.3% as durable goods inventories declined by 1.5%.⁴

Oil below $60, gold settles above $910. Oil futures fell more than 10% last week, the roughest week for the commodity since late January; oil settled at $59.89 a barrel Friday on the NYMEX. In the latest AAA survey, retail gas prices descended to $2.57 a gallon nationally. Gold futures lost 1.99% last week to end Friday at $912.50 per ounce.⁵

The edge of earnings season. Wall Street was mostly cautious (and a bit anxious) on the eve of 2Q reports and associated forecasts. The S&P 500 slipped 1.93% on the week, while the DJIA lost 1.62% and the NASDAQ lost 2.25%.⁶ 

(Source: CNBC.com, 7/10/09)⁷

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Riddle of the week. You must keep it in check, its loss will rile your brothers. For once yours is lost, it will soon be lost by others. What is it?

Contact my office or see next week’s Update for the answer.

Last week’s riddle answer: A match.  

Presented by Mark Lund.

Quote of the week. “Employ thy time well, if thou meanest to get leisure.” – Ben Franklin

Jobless numbers rein in bulls. June’s jobless figures gave Wall Street pause last week. The U.S. economy lost 467,000 non-farm jobs last month, 136,000 in manufacturing. (The health care sector added 21,000 jobs.) Job losses had decreased every month from February to May after hitting a peak of 741,000 in January. Analysts had expected June job losses of about 350,000. The silver lining here? Our economy lost an average of 436,000 jobs per month in 2Q 2009, compared to 691,000 jobs per month in 1Q 2009. Yet with unemployment now at 9.5%, some voices are calling for another federal stimulus.^1,2

Good news in manufacturing. Factory orders were up 1.2% in May – the biggest monthly increase in more than a year, noted the Commerce Department. Separately, the Institute for Supply Manufacturing said its gauge of manufacturing activity read 44.8 for June, still showing contraction but also representing the best reading since last August.³

Pending home sales increase again. True, the National Association of Realtors’ pending home sales index only increased 0.1% for May – but it was the fourth straight monthly increase. You have to go back to July-October 2004 to find the last time that happened.⁴ Standard & Poor’s Case-Schiller Index of home prices was down 0.6% for April; it had declined 2.2% for March. Could price declines be moderating?⁵

Is the consumer more or less confident? A week after the Reuters/University of Michigan final consumer sentiment index notched a big gain, the Conference Board’s June survey recorded a big drop in consumer confidence, slipping from a 54.8 in May to a 49.3 last month. The CB’s present situation index and expectations index both posted declines.⁶

Tough going for stocks. Deeper-than-expected job losses put Wall Street in a bearish mood last week.

(Source: CNBC.com, 7/3/09)⁷
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Riddle of the week. Take it out, scratch its head. Minutes later it is black, moments after it was red. What is this object?

Contact my office or see next week’s Update for the answer.

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. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) 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. 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. The 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.