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Weekly Economic Update for the Week of May 24, 2010
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Related Articles
Attention on Europe (and the Senate). The euro thankfully rose for three straight days last week, after hitting a four-year low after German chancellor Angela Merkel commented that the EU/IMF debt bailout had “done no more than buy time” to fix the crisis. Thursday evening, the Senate passed its version of the financial industry reform bill; the next step is reconciliation with the House version. Stocks were hit hard early in the week, but managed Friday gains; a late rally took the Dow north 125 points.1,2,3
Consumer, producer prices retreat. This was surprising: the CPI declined 0.1% in April as energy prices fell by 1.4%. The PPI also decreased 0.1%. The Commerce Department reported a 0.9% year-over-year increase in the CPI, well below the Federal Reserve’s annual inflation target of 1.5-2.0%.4,5
Indicators streak ends. The Conference Board’s index of leading indicators Slipped 0.1% last month, the first dip since March 2009. Economists surveyed by Thomson Reuters had forecast a 0.2% increase.6
Housing starts Rise, permits fall. Overall housing starts increased by 5.8% in April to the highest level since October 2008, with a 10.0% rise in single-family construction. However, the Commerce Department had building permits down by 11.5% - an effect of expiring federal tax credits.7
Bulls try to hold their ground. 8
% Change | Y-T-D | 1-Yr Chg | 5-Yr Avg | 10-Yr Avg |
DJIA | -2.25 | +22.93 | -0.53 | -0.33 |
NASDAQ | -1.77 | +31.49 | +1.78 | -3.37 |
S&P 500 | -2.46 | +22.44 | -1.71 | -2.23 |
Real Yield | 5/21 | 1 Yr Ago | 5 Yrs Ago | 10 Yrs Ago |
10YrTIPS | 1.33% | 1.67% | 1.67% | 4.34% |
(Source: CNBC.com, BigCharts.com, ustreas.gov, bls.gov, 5/21/10)9,10,11,12
Indices are unmanaged, do not incur fees or expenses, and cannot be
invested into directly. These returns do not include dividends.
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Citations.
1 -guardian.co.uk/business/2010/may/17/euro-four-year-low-debt-crisis [5/17/10]
2 - money.cnn.com/2010/05/21/markets/markets_newyork/index.htm [5/21/10]
3 - marketwatch.com/story/us-stocks-turn-positive-boosted-by-financials-2010-05-21 [5/21/10]
4 - blogs.barrons.com/stockstowatchtoday/2010/05/19/cpi-has-surprise-dip-led-by-energy-prices [5/19/10]
5 - online.wsj.com/article/SB10001424052748703691804575254091622651542.html [5/20/10]
6 - thenewstribune.com/2010/05/20/1194127/leading-indicators-drop-01-percent.html [5/20/10]
7 - investors.com/NewsAndAnalysis/Article.aspx?id=534355 [5/18/10]
8 - blogs.wsj.com/marketbeat/2010/05/21/data-points-us-markets-246/ [5/21/10]
9 – usatoday.com/money/default.htm [5/21/10]
10 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=5%2F21%2F09&x=0&y=0 [5/21/10]
10 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=5%2F21%2F09&x=0&y=0 [5/21/10]
10 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=5%2F21%2F09&x=0&y=0 [5/21/10]
10 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=5%2F20%2F05&x=0&y=0 [5/21/10]
10 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=5%2F20%2F05&x=0&y=0 [5/21/10]
10 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=5%2F20%2F05&x=0&y=0 [5/21/10]
10 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=5%2F22%2F00&x=0&y=0 [5/21/10]
10 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=5%2F22%2F00&x=0&y=0 [5/21/10]
10 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=5%2F22%2F00&x=0&y=0 [5/21/10]
11 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [5/21/10]
11 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [5/21/10]
12 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]
