Spending, incomes: Two important measures of the “pocketbook” economy come out this week. Personal incomes and personal consumption spending are due Monday (8:30 a.m.) and the non-farm payrolls (aka, “unemployment”) report on Friday (8:30 a.m.). Unlike the recent GDP revision, these figures more closely relate to the economy right now, that is, how much Americans are spending (or not) and how secure they might feel in the job market (or not).

Manufacturing, jobs: Another closely watched figure will be the ISM Manufacturing Index (Wednesday at 10 a.m.), particularly “new orders” figures. If orders slip below 50.3 on the index, experts believe stocks will struggle over the following six months.

Fed watch: Fed officials say that rates will stay low for “an extended period.” Nevertheless, the uncertainty inherent in the economy makes the Fed record especially touchy material. Minutes from the Aug. 10 meeting will be released Tuesday at 2 p.m.

Even more Fed watch: More chances to try to figure out future Fed direction: St. Louis Fed President James Bullard will give a welcome speech Monday at an event, around lunchtime. Dallas Fed President Richard Fisher, an inflation hawk, will speak in Houston at a luncheon on Wednesday. Dennis Lockhart, Atlanta Fed president, is scheduled to speak on the economy Friday mid-morning at a university in Tennessee.

Major earnings: Winn-Dixie Stores (Monday), Dollar General, DSW (Tuesday), Brown-Forman, Express, HJ Heinz, Jos. A. Bank, Zale, Joy Global, Hovnanian Enterprises, SAIC (Wednesday), Del Monte, Jackson Hewitt, Movado Group, Sycamore, Cooper Cos., H&R Block, Quiksilver (Thursday), Campbell Soup (Friday).

Thanks to my friends at www.moneynews.com for this post

Weekly Market Wrap:  The markets moved lower for most of the week and ended with a solid rally on Friday to close down only slightly lower.  The S&P 500 finished at 1,065 down 0.7%.  Oil rallied 2.6% on the week after recent sharp drops ending at $75.41 per barrel.  Gold was slightly higher at $1,238.07 per oz. up 0.9% and the dollar was basically flat at $82.91 as compared against other major world currencies.  For the year the S&P 500 is now down 4.53%.

The markets began the week down 4 with more news on merger speculation could not overcome other news on the slowing recovery.  Markets moved lower again on Tuesday, dropping 15 points as home sales declined 27%.  A small rebound on Wednesday moved the market 3 points higher despite new home sales falling to record lows and durable goods orders increasing less than expected.  On Thursday the market shed 8 more points as jobless claims improved but less than expected.  Stocks rallied on Friday with the S&P 500 jumping 17 points as the Fed indicated that it still had options to prop up the economy and 2^nd quarter GDP was revised downward to 1.6%, but not as far down as expected.

The same theme continued this week, we are in a slowdown of the economic recovery.  Ric Edelman put it well when he compared it to driving down the highway at 80 and then having to slow down to 40.  We are still going to get there, it’s just going to take a little longer.  Home sales declining should be no surprise.  The home buyer tax credits moved up many home sales that would normally have been spread out through the summer.  There is bound to be a let down when the stimulus ends.  The key take-away at this point is that things are still improving and moving forward, just at a slower pace.  Once job creation starts picking up, the economy will start to move as well.  As long as the fed stays out of the way and does not attempt any more “stimulus” I believe we will see things improve.

Mortgage rates actually moved lower on the week.  The Schwab Bank 15-year rate is now at 4.00% and the 30-year rate is at 4.50%. These rates are as of 8/27/2010 and assume no points, no origination fee and a $250,000 mortgage. 

The Week at AAM (to highlight what I do for clients and how I am different than most advisors):

Some of the highlights of my last week include:

• Completed a mini-plan to help a new client prioritize cash flow to meet her goals.
• Helped a client to retire soon by reviewing pension paperwork and helping her set up her payments and direct deposit.
• Met with more clients to update their financial plan to help them meet their financial goals.
• Had lunch with a mortgage professional and a CPA to learn more about their business and to set up possible ways that we can help each other’s clients meet their financial needs.
• Completed a letter to all of my clients to update them on the markets, strategies that I am working on and the state of AAM.
• Started up soccer practice this week and heading to Ford Field today to watch my son play football during halftime of the Lions preseason game!

I hope you had a great week as well.  Please let me know if there is ever anything I can do for you or if something has changed in your financial situation to warrant a meeting or a change of investment policy.

 Ronald J. VanSurksum, CFP®
Advanced Asset Management, LLC

Housing, manufacturing: On Tuesday (10 a.m.) we get existing home sales, followed on Wednesday (also 10 a.m.) by new home sales. Both are July numbers. Durable goods orders come at 8:30 a.m. Wednesday.

Economic growth (GDP): The headlines last week were all about how the Fed is bailing to save the recovery. On Friday (8:30 a.m.) we'll get a better sense of how big a bucket Fed Chief Ben Bernanke might need, as the government releases its revision of second-quarter GDP. The initial figure of 2.4 percent growth is expected to head south, to 1.4 percent.

Japan easing: Stocks across Asia bounced higher this past week on expectations that Japan will follow the Federal Reserve back into easing. A new stimulus packages might follow. A meeting on Monday between the Japanese prime minister and the head of the Bank of Japan could confirm the easing rumor — or squash the rally.

Fed speech: On Monday, the Chicago Fed releases its national activity index (8:30 a.m.). Investors watch this for a sense of inflation to come. Charles Evans, president of the Chicago Fed, is scheduled to speak Tuesday morning at a breakfast in Indianapolis. In early June, Evans reaffirmed the Fed's “ultra low” interest rate policy and predicted joblessness would remain high.

Major earnings reports: Barnes & Noble, DSW, Medtronic, Burger King, Pacific Sunwear (Tuesday), American Eagle, Perry Ellis, Toll Brothers, Guess?, JDS Uniphase (Wednesday), J. Crew, Novell (Thursday), Tiffany & Co. (Friday) are all due out.

Thanks to my friends at www.moneynews.com for putting this in my email box!