AAM Weekly Market Wrap – October 21, 2012

Weekly Market Wrap:  Positive retail sales and improving homebuilder sentiment sent stocks higher early in the week but rising jobless claims and a Google earnings miss brought stocks back to nearly even for the week.

 

For The Week

  • The S&P 500 Index +0.32% to 1,433.19
  • Oil -1.77% to $90.14
  • Gold -1.87%  to $1,721.79
  • Dollar -0.05% to $79.63

Year-To-Date for the major indexes:

 

  • The S&P index +13.96%
  • The Dow Jones Index +9.22
  • The NASDAQ Index +15.37%
  • The Russell 2000 Small cap Index +10.81%
  • EAFE International Index +9.77%
  • 10 Year Treasury Yield at 1.77%
  • 30 Year Treasury Yield at 2.94%
  • WTI Crude Oil Index -8.97%
  • Bloomberg Gold Index +10.09%
  • Dollar Index -0.76%

 

 

Monday stocks jumped 12 points on light volume as retail sales beat expectations, business inventories were higher and New York area manufacturing missed.  Overseas China added positive trade and inflation data.

Tuesday stocks added 15 points on light volume as the Consumer Price Index was higher than expected but the core prices were in-line, industrial production beat and homebuilder sentiment improved for the sixth straight month and reached its highest level since mid-2006.  Overseas German investor confidence improved and Spain bailout hopes increased.

Wednesday stocks slipped 6 points on light volume as housing starts and building permits beat expectations and mortgage applications decreased.  Mixed earnings reports sent stocks lower.

Thursday stocks dropped 4 more points on moderate volume as jobless claims rose more than expected, Philly manufacturing rose, the index of leading economic indicators rose, and positive data came out of China.  Google’s earnings were accidentally released early and were less than expectations.

Friday stocks tumbled 24 points on moderate volume as existing home sales dropped and disappointing earnings moved markets lower.  Overseas a Spain bailout became more uncertain.

Takeaways from this week:

  • It was a mostly good week for US economic data with better than expected retail sales, tame inflation, and continued positive data out of the housing market.
  • Overseas the data was mixed a China data was mostly positive, German investor confidence improved but uncertainty over a bailout for Spain dampened Euro-enthusiasm.
  • So far, so good on the economic front.  Only about 2.5 weeks until the election and then the fiscal cliff needs to be dealt with!  It could be a volatile end to 2012.

 

Mortgage rates moved higher this week.  The national averages as reported by Bloomberg indicate a 15-year rate of 2.85% and a 30-year rate of 3.47%. These rates are as of 10/19/2012 and may include points.

 

What to watch for on the economic calendar next week:


Monday – No major data releases

Tuesday – FOMC Meeting begins

Wednesday – New Home Sales / FOMC Meeting Announcement

Thursday – Jobless Claims / Durable Goods Orders / Pending Home Sales

Friday – 3Q GDP / Consumer Sentiment

 

 

Ronald J. VanSurksum, CFP®
Advanced Asset Management, LLC
October 22, 2012

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