Filed under: Economic Recovery, Housing Market Trends, Norhill Wealth Strategies Report, Retirement Investing, Senior Investing, Slow recovery | Tags: economic indicators, Economic Outlook, home sales, housing market, markets updates, Norhill Wealth Strategies Report, Warren Elkin
Mixed news for housing market
The scorching heat wave that set record temperatures across much of the nation didn’t extend to the economy, which remains tepid at best according to the latest readings. There was a rise in the Conference Board’s index of leading economic indicators and a bump in new residential construction. However, existing-home sales dropped for the third straight month as President Barack Obama and congressional leaders continued to negotiate over an increase in the nation’s debt limit.
Leading indicators advance
The index of leading economic indicators rose 0.3% in June, less than May’s 0.8% jump but still an encouraging sign that April’s -0.3% reading represented temporary factors and was not part of a larger trend. Compared to June 2010, the index was about 6% higher. Five indicators rose in June, with real money supply the largest contributor, followed by interest rate spread. Stock prices were the largest detractor, along with consumer expectations. The coincident index, which measures current economic activity, inched ahead 0.1%. The indexes are a compilation of indicators that can provide insight into both current and future activity in the broader economy.
Tumble continues for existing home sales
Sales of existing homes fell 0.8% in June to an annualized rate of 4.77 million. The monthly decline-the third straight-was unexpected but attributed to a rise in canceled contracts and the tough economy. Sales were down 8.8% compared to June 2010, when the first-time home buyer tax credit was still in effect. Most of the decline was the result of condominium sales, which dropped 7%. Single-family home sales were unchanged. Across the regions, sales rose slightly in the Midwest, were stable in the South, and fell in the Northeast and West. Compared to a year ago, the median existing-home price was up 0.8%, to $184,300.
The economic week ahead
Next week’s slate of economic news is a bit heavier. Reports on consumer confidence and new-home sales are scheduled for Tuesday, followed by durable goods and the Federal Reserve’s Beige Book nationwide survey of economic activity on Wednesday, and employment costs and real gross domestic product on Friday.
Markets Update
Warren Elkin of Norhill Financial is your safe money strategist. When it comes to your hard earned dollars, he can keep your money secure as it grows. Warren Elkin can be reached toll free at 877-476-5051- or by email at elkininc@aol.com. To learn more about him check out www.warrenelkin.com.
Filed under: Economic Recovery, Norhill Financial, Norhill Wealth Strategies Report | Tags: Economic Outlook, financial planning, GDP, Norhill Wealth Strategies Report
Some interesting facts as we go through the holiday weekend…
The percentage split between up and down trading days on the S&P 500 over the last 50 years (1961-2010) is 53/47. The YTD split (through 6/24/11) is 55/45. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).
2. SIX MONTHS –
The second half of the year (i.e., July – December) has outperformed the first half of the year (i.e., January – June) for the S&P 500 on a total return basis during 8 of the last 10 years (source: BTN Research).
3. WILL I HAVE ENOUGH? –
More than half of the Americans surveyed in mid-April 2011 (58%) are worried about their ability to maintain their current standard of living into and throughout their retirement years. In the first quarter 2002, only 35% of Americans worried about this issue (source: Gallup).
4. IT’S FREE, ISN’T IT? –
71% of 803 participants in 401(k) plans that were surveyed in December 2010 incorrectly believed that their pre-tax retirement plan was run without incurring any fees, i.e., at a zero cost to the plan participants (source: AARP).
5. ALMOST HALF FOR OUR CARS –
Americans consume 18.8 million barrels of oil a day. 48% of our daily oil consumption is in the form of gasoline that we purchased at the pumps to drive our cars and light trucks. 10 years ago that consumption was at only 25%. (source: Energy Information Administration).
6. HELPING BORROWERS
608,615 homeowners have received a permanent modification to their home mortgage as of 4/30/11 through the government’s “Making Home Affordable Program” (MHAP). Another 843,479 homeowners started the process to obtain a mortgage modification but have dropped out of the program since it began in February 2009. MHAP was designed to assist 3-4 million US mortgage holders. The program is scheduled to run until 6/30/11 (source: MHAP).
7. LONG TIME, NO CHANGE –
With the Federal Open Market Committee voting 10-0 last Wednesday (6/22/11) to keep short-term interest rates unchanged for a 20th consecutive meeting, it has now been 2 ½ years since the Fed voted to cut interest rates on 12/16/08 (source: Federal Reserve).
8. YOU WANT THE LOAN? –
The 17 Eurozone finance ministers voted on Monday 6/20/11 to delay the # 5 tranche until 7/03/11 that is to be paid to Greece (worth 12 billion euros) from its original 110 billion euro loan (that was approved in May 2010). This next tranche is predicated upon the Greek government approving additional spending cuts, tax hikes and the sale of state-owned assets. The # 5 tranche, which would bring the total of the 2010 loan paid out to 65 billion euros (out of the 110 billion euros that have been committed), was to have been paid on Wednesday 6/29/11 (source: BTN Research).
9. JOIN THE GROUP –
Greece was not part of the original 11 countries that began using the euro on 1/01/99, but was the first country to be added when it became member # 12 on 1/01/01. Since Greece joined, 5 additional countries have signed on to use the euro. Estonia was the # 17 country added when they joined on 1/01/11 (source: European Central Bank).
10. LOWEST IN A LONG TIME –
Outstanding credit card debt in the United States as of 4/30/11 was $790 billion, the lowest month end total in our country since the sum was $787 billion as of 8/31/04 or more than 6 ½ years ago (source: Federal Reserve).
11. SOURCE OF REVENUE –
43 US states do not collect sales tax for online retail sales. The state of California has estimated that it would collect $200 million a year if it was to collect sales tax for its online sales (source: The Charlotte Observer).
12. RED INK –
With just 4 months to go in fiscal year 2011 (i.e., the 12 months ending 9/30/11), the Obama White House is estimating tax revenues of $2.17 trillion and outlays of $3.82 trillion for the entire year, resulting in a deficit of $1.65 trillion, equal to $4.5 billion of debt created per day (source: Office of Management and Budget).
13. STILL LONG –
Although the average processing time for a hearing decision regarding a request to receive disability benefits from Social Security was 354 days (approximately 1 year) as of May 2011, the average wait time was an even longer 532 days (approximately 1 ½ years) in August 2008 (source: Social Security).
14. ONCE A QUARTER –
The average American makes 4 visits a year to utilize the services of medical doctors, medical specialists and emergency rooms (source: National Health Care Surveys).
Filed under: Businesses Prepare for Holiday Sales, Consumer Spending, Economic Outlook, Economic Recovery | Tags: Economic Outlook, Norhill Financial, Norhill Wealth Strategies, Warren Elkin
Spending climbs while inflation stays flat
The week’s news suggests that the economy continues to recover at a steady but slow pace. Retail sales were up more than 1% for the month of October, while businesses expanded their inventories to keep pace with shoppers and to prep for the upcoming holiday rush. Meanwhile, last month’s slight increase in consumer prices barely registered, sending inflation to its lowest level in more than 50 years.
Consumer spending continues to rise
Sales were up across most industries for the month, with soaring auto and parts sales leading the way. Building supply, sporting goods, and hobby stores also reported strong sales, as did restaurants and bars. But sales fell at furniture and electronics stores, suggesting that consumers aren’t quite ready for big-ticket purchases yet.
Businesses plan for the holiday rush
U.S. business inventories were up 0.9% for the month of September, indicating that suppliers were stockpiling goods before the holiday shopping rush. Auto inventories saw the largest gains, with building materials following in second place. Department stores were the only category in which inventories declined.
Demand for new homes plummets
Housing starts fell 11.7% in October to a seasonally adjusted annual rate of 519,000, suggesting that there’s not much of a market for new homes these days. This was the lowest annual rate of housing starts since April 2009 and the third-lowest on record since January 1959. Housing permits, a good indication of future construction, rose 0.5% for the month-less than what analysts had expected.
The economic week ahead
Next week’s highlight will be Tuesday’s release of the updated third-quarter gross domestic product estimate. Other news will include the latest on existing-home sales (Tuesday), durable goods, personal income, and new-home sales (Wednesday).
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Markets Update
For the week ended November 19, the S&P 500 Index remained unchanged at 1,199 (for a year-to-date total return-including price change plus dividends-of about 9.5%). The yield of the 10-year U.S. Treasury note rose 12 basis points to 2.88% (for a year-to-date decrease of 97 basis points).
Norhill Wealth Strategies 