Weekly Economic Update – Feb. 4, 2014


On Friday, the Commerce Department announced that consumer spending rose 0.4% in December, even as consumer incomes stayed flat. The University of Michigan’s final January consumer sentiment index came in at 81.2 (up 0.8 points from December) and the Conference Board’s January consumer confidence index posted a reading of 80.7 (up 3.2 points from last month). Analysts surveyed by Briefing.com thought both indices would be flat for January.1


Brutal weather sent pending home sales down 8.7% in December to a 43-month low, as reported by the National Association of Realtors. The Census Bureau measured a 7.0% drop in new home buying last month. In better news, November’s Case-Shiller Home Price Index showed a 13.7% yearly advance (the best 12-month gain in housing values since February 2006), and new home prices rose 8.4% in 2013.2,3                


Durable goods orders fell 4.3% in December, but the Census Bureau said the retreat was only 1.6% when transportation orders were factored out. This was a switch from the (revised) 3.4% gain in hard goods orders in November.1 


As expected, the Federal Reserve announced last week that it would reduce its monthly bond purchases by another $10 billion starting in February. Wall Street struggled for most of the week, with the 5-day performances as follows: DJIA, -1.13% to 15,698.85; NASDAQ, -0.59% to 4,103.88; S&P 500, -0.43% to 1,782.59.4,5

THIS WEEK: On Monday, Janet Yellen will be sworn in as Fed chair, ISM puts out its January manufacturing PMI, the Commerce Department issues December auto sales figures, and Anadarko, Hartford Financial, Yum! Brands and Sysco release quarterly results. SiriusXM, Archer Daniels Midland, Michael Kors and Aflac post earnings Tuesday, and data on December factory orders also arrives. Wednesday brings January’s ISM service sector index, January’s ADP employment report and earnings from Merck, Time Warner, Green Mountain Coffee, Aramark, Allstate, CBRE, Yelp!, Ralph Lauren, Marathon Oil, Walt Disney, Twitter, Tesoro and Pandora. Thursday, earnings from AOL, Expedia, Zynga, GM, Kellogg, Aetna, Towers Watson, Fidelity, Activision Blizzard, Vulcan Materials, Monster, Phillip Morris, Invacare, Amtech, 21st Century Fox, Lions Gate, Universal and LinkedIn all arrive, plus new initial claims figures and a new Challenger job-cut report. Friday, the Labor Department releases the January employment report.
















S&P 500






1/31 RATE









 Sources: USATODAY.com, bigcharts.com, treasury.gov - 1/31/146,7,8,9

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The S&P / Case-Shiller U.S. National Home Price Index measures the change in the value of U.S. residential housing market. The S&P / Chase-Shiller  U.S. National Home Price Index tracks the growth in value of real estate by following the purchase price and resale value of homes that have undergone a minimum of two arm’s-length transactions. The index is named for its creators, Karl Case and Robert Shiller.

The University of Michigan Consumer Sentiment Index (MCSI) is a survey of consumer confidence conducted by the University of Michigan. The MCSI uses telephone surveys to gather information on consumer expectations regarding the overall economy.

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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.

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Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested.

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1 - briefing.com/investor/calendars/economic/2014/01/27-31 [1/31/14]

2 - bloomberg.com/news/2014-01-30/pending-sales-of-u-s-existing-homes-slump-most-since-may-2010.html [1/30/14]

3 - foxbusiness.com/economy-policy/2014/01/27/new-home-sales-slide-7-in-december/ [1/27/14]

4 - marketwatch.com/story/fed-stays-the-course-by-tapering-another-10-billion-2014-01-29 [1/29/14]

5 - google.com/finance?q=INDEXDJX%3A.DJI%2CINDEXSP%3A.INX%2CINDEXNASDAQ%3A.IXIC&ei=ABvsUviuDeetiQKN3QE&gl=us [1/31/14]

6 - usatoday.com/money/markets/overview/ [1/31/14]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F31%2F12&x=0&y=0 [1/31/14]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F31%2F12&x=0&y=0 [1/31/14]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F31%2F13&x=0&y=0 [1/31/14]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F30%2F09&x=0&y=0 [1/31/14]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F30%2F09&x=0&y=0 [1/31/14]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F30%2F09&x=0&y=0 [1/31/14]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F30%2F04&x=0&y=0 [1/31/14]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F30%2F04&x=0&y=0 [1/31/14]

7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F30%2F04&x=0&y=0 [1/31/14]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/31/14]

9 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/31/14]


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