Inflation
tame (for now)
NO
RISE IN CORE CPI OR CORE PPI IN OCTOBER
Last
month, the Consumer Price Index rose 0.2% with core CPI flat for
the third month in a row. Core CPI has advanced at a crawl in the
past 12 months: just 0.6% compared to a Federal Reserve annualized
target of 2.0%. Producer prices rose 0.4% last month, duplicating
their August and September increase. Yet core producer prices fell
0.6%.1,2
HOUSING
STARTS SLIP, MORTGAGE RATES JUMP
The
Commerce Department announced an 11.7% slump in new residential
construction starts for the month of October, and a 1.9% slip from
year-ago levels. A drop in apartment and condo construction
accounted for most of the October decline. Last week, Freddie Mac
said that the average rate on a 30-year conventional home loan had
jumped to 4.39% from 4.17% a week prior. The average rate for a
15-year FRM had increased to 3.76%, up from 3.57% in Freddie's
previous survey.3,4
RETAIL
SALES 7.3% BETTER THAN A YEAR AGO
Car
buying drove a 1.2% gain in U.S. retail sales in October. In fact,
the Census Bureau reported a 14.7% year-over-year increase in sales
volume at car dealerships. The year-over-year gain in overall
retail sales was 7.3%, and 13.5% for non-store
retailers.5
CONFERENCE
BOARD INDEX UP 0.5%
The
Conference Board's index of leading economic indicators notched its
second straight half-percent increase in October. This was also its
fourth straight advance.6
GM
IPO TURNS THE WEEK AROUND
Thursday's
eagerly awaited initial public offering from General Motors sent
the Dow on a triple-digit rally and turned a down week into a flat
one. Here is how the three marquee indices performed last week:
DJIA, +0.10% to 11,203.55; S&P 500, +0.04% to 1,199.73; NASDAQ,
0.00% to 2,518.12 (it actually fell .09 on the
week).7,8
COMING
NEXT WEEK: No
economic releases are scheduled for Monday. Tuesday, we have
October existing home sales and the release of the minutes from the
Fed's November 3 policy meeting, plus the second estimate of 3Q
GDP. Wednesday, we have even more data: the October consumer
spending report, October new home sales, October durable goods
orders and the final November consumer sentiment survey from the
University of Michigan.
%
CHANGE
|
Y-T-D
|
1-YR
CHG
|
5-YR
AVG
|
10-YR
AVG
|
DJIA
|
+7.44
|
+8.43
|
+0.81 |
+0.71
|
NASDAQ
|
+10.97
|
+16.75
|
+2.61
|
-1.24
|
S&P
500
|
+7.59
|
+9.57
|
-0.78
|
-1.06
|
REAL
YIELD
|
11/19
RATE
|
1
YR AGO
|
5
YRS AGO
|
10
YRS AGO
|
10
YR TIPS
|
0.77%
|
1.21%
|
2.09%
|
4.03%
|
Source:
cnbc.com, bigcharts.com, ustreas.gov, bls.gov - 11/19/10
Indices
are unmanaged, do not incur fees or expenses, and cannot be
invested into directly.
These
returns do not include dividends.
JAY'S TAKE ON THE
MARKET
Proceed
with caution! We covered five investment themes we are looking at
right now. I am not comfortable in bonds right now and looking at
taking some profits off the table in some BIG winners we have had
in our investment portfolio. We have three main strategies we
use:
Dueling
Duos:
Dueling Duo picks are
more speculative in nature and designed to be held for at least
five years. As conditions change we will update the status of our
recommendations.
All-Weather:
This
portfolio is suitable for more cautious investors, those with time
horizons of five to seven years, and those who are close to or in
retirement. The goal is to protect against losses in a down market
and take advantage of the markets when they rise. This portfolio
typically outperforms in down and flat markets while it may
underperform during fast-rising markets due to its more
conservative approach (holding bonds).
Tomorrow's
Treasures:
This
portfolio seeks to find high-quality, undiscovered smaller
companies that may one day grow into larger, more recognized and
profitable companies. Please keep in mind, this portfolio is not
for the faint of heart. This will consist of stocks handpicked to
help you try to maximize your investment dollars without
sacrificing your principles.
We will be
adding a 4th strategy starting in January to look at "contrarian
plays". These are down and out investment opportunities that have
good valuations and decent upside potential in
2011.
|