Gary Hokin of Hokin Investment Advisors/Nikoh Securities Corporation Presents:
Weekly Economic Update for the Week of June 9, 2008
Quote of the week. “Reading is to the mind what exercise is to the body.” – Sir Richard Steele
Spike in joblessness. The Labor Department announced 5.5% unemployment for May on Friday, up from 5.0% in April. Part of the jump was seasonal, as youths looked for summer jobs. But 5.5% is the highest unemployment rate since October 2004, and the .5% monthly increase was the biggest in 22 years.1
Oil prices jump. Oil prices gained $5.49 on Thursday and $10.75 on Friday to end the week at $138.54 on the NYMEX. A weakening dollar, the new jobless report and a Morgan Stanley analyst’s claim that oil futures may hit $150 by July all contributed.2
Bernanke: rates just fine. Last week, Federal Reserve Chairman Ben Bernanke stated that U.S. interest rate policy was “well positioned to promote moderate growth and price stability.”3 He spoke of the Fed’s commitment to a “strong and stable” dollar, and said that the Fed and Treasury Department will “closely monitor developments in foreign exchange markets.”4 At Harvard University, he said he did not foresee “a 1970s-style wage-price spiral, in which wages and prices chased each other ever upward.”5
Factory orders rise. Against forecasts, U.S. factory orders rose 1.1% in April. Economists had expected a slight decrease. The Institute for Supply Management index also rose to 49.6 in May.6
Stocks slump. Headlines prompted a 394-point slip in the DJIA on Friday and losses for the week. The Dow had gained 214 points on Thursday.
|
% Change |
Y-T-D |
1-Year |
5-Yr Avg |
|
DJIA |
-7.95 |
-10.28 |
+6.94 |
|
NASDAQ |
-6.70 |
-4.55 |
+10.41 |
|
S&P 500 |
-7.33 |
-11.52 |
+7.55 |
(Source: USAToday.com, CNNMoney.com, 6/6/08) 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. An algae growth in a pond
doubles in size each day. In 28 days, it will cover the entire pond. In how
many days will the pond be half-covered?
Contact my office or see next week’s Update for the
answer.
Last week’s riddle: Angie bet Jon that she
could stand on one finger. Jon took the bet, knowing she couldn’t do it … but
she did. How did she do it?
Answer: She placed her index finger under her shoe and stood on it.
These views are those of Peter Montoya Inc., and not Gary Hokin and/or Nikoh Securities Corporation, 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. Please consult Gary Hokin at (847) 559-1002 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 bloomberg.com/apps/news?pid=20601103&sid=a_IJt9DYmppg&refer=news# [6/6/08]
2 bloomberg.com/apps/news?pid=20601103&sid=aMJRL55kYvJY&refer=news [6/6/08]
3 usatoday.com/money/economy/2008-06-03-bernanke-economy_N.htm [6/3/08]
4 bloomberg.com/apps/news?pid=20601087&refer=home&sid=alQst9kC7wV4# [6/3/08]
5 biz.yahoo.com/ap/080604/bernanke.html?.v=1 [6/4/08]
6 nytimes.com/2008/06/04/business/04economy.html?ref=business
7 usatoday.com/money/default.htm [6/6/08]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F6%2F07&mode=add&symb=DJIA [6/6/08]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F6%2F03&mode=add&symb=DJIA [6/6/08]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F6%9F07&mode=add&symb=NASDAQ [6/6/08]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F6%2F03&mode=add&symb=NASDAQ [6/6/08]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F6%2F07&mode=add&symb=SPX [6/6/08]
8 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F6%2F03&mode=add&symb=SPX [6/6/08]