weekof063008

Quote of the week. “Education is the ability to listen to almost anything without losing your temper or your self-confidence.” – Robert Frost

Emotions rattle markets. On Thursday, a confluence of events sent the Dow Jones Industrial Average down to the mid-11,000s: high oil prices, negative analyst comments on Citigroup and General Motors, subpar forecasts from Oracle and Research In Motion.¹ As Harris Private Bank CIO Jack Ablin noted, “This is unfortunately kind of a slack period. We’re waiting for second-quarter earnings.”

Stimulus boosts personal spending. On Friday, the Commerce Department issued the May consumer spending data came out – and it was all quite positive, clearly reflecting the power of the economic stimulus checks. Personal spending jumped 0.8%, disposable incomes rose 5.7% (the biggest monthly increase in 33 years), and the personal savings rate hit 5%, the best number since May 1995.²

Oil closes at $140. Oil futures came back down from a peak of $142.99 to $140.21 Friday. Part of the spike can be attributed to the dollar weakening against the euro. Crude oil prices gained 3.6% for the week.³

Existing home sales rise 2%. So reports the National Association of Realtors; the 2% increase for the month of May was aided by a median resale price 6.3% lower than a year ago. The inventory of unsold homes diminished by 1.4% last month.⁴

Wall Street hopes for an ascent. As oil futures rose and gold ended the week at $931.30 per ounce, the major indexes lost major ground during the last full trading week of the second quarter.⁵

% Change	Y-T-D	1-Year	5-Yr Avg
DJIA	-14.46	-18.34	+5.25
NASDAQ	-12.69	-12.51	+8.50
S&P 500	-12.94	-17.83	+6.19

(Source: CNBC.com, CNNMoney.com, 6/27/08) ^{6, 7}

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. How can you be behind your brother when he is behind you?

Contact my office or see next week’s Update for the answer.

Last week’s riddle: 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?

Answer: $100. One-fifth of 100 = 20, so the man is left with $80; then, one-fifth of 80 is 16, so the man is left with $64 after spending $36 total.

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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. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. 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 seattlepi.nwsource.com/business/368632_wallstreet27.html [6/27/08]

² cbsnews.com/stories/2008/06/27/business/printable4214926.shtml [6/27/08]

³ marketwatch.com/news/story/crude-futures-mark-first-close/story.aspx?guid=%7BD0B44D21%2D18EC%2D4153%2D9773%2D3EDCED4D345F%7D [6/27/08]

⁴ reuters.com/article/reutersEdge/idUSWBT0092820080626?sp=true [6/26/08]

⁵bloomberg.com/markets/commodities/cfutures.html [6/27/08]

⁶ cnbc.com/id/25411508 [6/27/08]

⁷ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F27%2F07&mode=add&symb=DJIA [6/27/08]

⁷ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F27%2F03&mode=add&symb=DJIA [6/27/08]

⁷ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F27%9F07&mode=add&symb=NASDAQ [6/27/08]

⁷ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F27%2F03&mode=add&symb=NASDAQ [6/27/08]

⁷ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F27%2F07&mode=add&symb=SPX [6/27/08]

⁷ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=6%2F27%2F03&mode=add&symb=SPX [6/27/08]