Gary Hokin of Hokin Investment Advisors/Nikoh Securities Corporation Presents:
Weekly Economic Update for the Week of June 23, 2008
Quote of the week. “Real knowledge is to know the extent of one’s ignorance.” – Confucius
Credit, oil challenge stocks. The Dow Jones Industrial Average closed at its lowest mark in three months Friday as investment banks reported lower quarterly profits and regional banks and bond insurers absorbed downgraded credit ratings.1 Crude futures rose to $134.62 a barrel on the New York Mercantile Exchange; the yield on 10-year Treasuries dipped to 4.15%.2
Wholesale prices jump in May. Producer prices went up 1.4% in May, according to the Labor Department – compared to a 0.2% increase in April. Energy prices rose 4.9% last month. But there was a silver lining to this story: core inflation rose just 0.2%, as opposed to 0.4% for April.3
Mortgage rates up, housing starts fall. Is a recovery beginning in the housing sector? Well, not according to Commerce Department data for May. Housing starts dipped 3.3% and building permits also fell for the month.4 Rates on 30-year fixed mortgages averaged 6.42% last week, stated Freddie Mac; 15-year FRMs were at 6.02%, 5-year ARMs rose to 5.89%, and 1-year ARMs averaged 5.19%.5
Leading indicators improve again. In May, for the third month in a row, The Conference Board’s index of leading economic indicators gained 0.1%, exceeding median expectations of economists. From October to March, the index had fallen 0.7%.6
Tough trading week. The NASDAQ lost 2% last week; the Dow and S&P 500 respectively declined 3.8% and 3.1%.7
|
% Change |
Y-T-D |
1-Year |
5-Yr Avg |
|
DJIA |
-10.72 |
-13.91 |
+5.74 |
|
NASDAQ |
-9.28 |
-8.03 |
+9.26 |
|
S&P 500 |
-10.24 |
-14.79 |
+6.47 |
(Source: USAToday.com, CNNMoney.com, 6/20/08) 8, 9
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. A man spends one fifth
of the money in his wallet. He then spends one fifth of what remains in the
wallet. He spends $36.00 in all. How much money did he have to begin with?
Contact my office or see next week’s Update for the
answer.
Last week’s riddle: A triangle has sides of 13,
18 and 31 inches. What is its area?
Answer: Zero.
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 money.cnn.com/2008/06/20/markets/markets_newyork/index.htm?postversion=2008062016 [6/20/08]
2 money.cnn.com/2008/06/20/markets/markets_newyork/index.htm?postversion=2008062016 [6/20/08]
3 cnbc.com/id/25205760 [6/17/08]
4 cnbc.com/id/25207855 [6/17/08]
5 news.yahoo.com/s/ap/mortgage_rates;_ylt=Aq4GxCpl_5sTIW1AHYkVCGqz1g4B [6/19/08]
6 money.cnn.com/2008/06/19/news/economy/leading_indicators/index.htm?postversion=2008061911 [6/19/08]
7 cnbc.com/id/25287200 [6/20/08]
8 usatoday.com/money/default.htm [6/20/08]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F20%2F07&mode=add&symb=DJIA [6/20/08]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F20%2F03&mode=add&symb=DJIA [6/20/08]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F20%9F07&mode=add&symb=NASDAQ [6/20/08]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F20%2F03&mode=add&symb=NASDAQ [6/20/08]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F20%2F07&mode=add&symb=SPX [6/20/08]
9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F20%2F03&mode=add&symb=SPX [6/20/08]