Weekly Economic Update for the Week of May 3, 2010

Good solid growth. On Friday, the Commerce Department estimated 1Q GDP at +3.2%, marking the third positive quarter in a row. What drove the gain? Consumer spending was up 3.6% in the quarter, and business spending on equipment and software increased by 13.4%.¹

Year-over-year gain in home prices. That’s what the February S&P/Case-Shiller Home Price Index revealed. Across 20 cities, prices rose 0.6% from February 2009 levels. This is the first yearly advance recorded by the index since December 2006, though prices were down 0.9% from January.²

The latest consumer barometers. One went north, another south: the final Reuters/University of Michigan consumer sentiment index for April dipped to 72.2, down from 73.6 in March but above the 71.0 forecast by analysts polled by Bloomberg News. The Conference Board’s April survey rose to 57.9 from March’s 52.3 – this is the best mark since September 2008.^3,4

Gold’s major gain. Across last week, gold prices climbed $27.00 to settle at $1,180.10 per ounce Friday. April was gold’s best month since November. Oil futures advanced $1.03 last week, ending Friday at $86.15 a barrel on the NYMEX.⁵

A trying week for stocks. Last week, Standard & Poor’s downgraded the debt ratings of Spain, Portugal and Greece; federal prosecutors also moved to investigate Goldman Sachs. The Dow lost 1.8% on the week to end at 11,008.61 Friday. The NASDAQ and S&P 500 also had down weeks. However, the monthly numbers for April were as follows: DJIA, +1.40%; NASDAQ, +2.64%; S&P 500, +1.48%.^6,7

% Change	Y-T-D	1-Yr Chg	5-Yr Avg	10-Yr Avg
DJIA	+5.57	+34.78	+1.60	+0.18
NASDAQ	+8.46	+43.32	+5.62	-3.78
S&P 500	+6.42	+35.96	+0.52	-1.92
Real Yield	4/30	1 Yr Ago	5 Yrs Ago	10 Yrs Ago
10YrTIPS	1.29%	1.69%	1.61%	4.34%

(Source: CNBC.com, BigCharts.com, ustreas.gov, bls.gov, 4/30/10)^7,8,9,10

Indices are unmanaged, do not incur fees or expenses, and cannot be

invested into directly. These returns do not include dividends.

Citations.

1 - thestreet.com/story/10741829/1/gdp-rises-at-32-pace-in-first-quarter.html [4/30/10]

2 - marketwatch.com/story/home-prices-show-year-over-year-gain-sp-2010-04-27 [4/27/10]

3 - dailyfinance.com/story/consumer-sentiment/19460171/ [4/30/10]

4 - investmentadvisor.com/News/2010/4/Pages/Consumers-Investors-and-Advisors-Show-Different-Confidence-Levels.aspx [4/27/10]

5 - blogs.wsj.com/marketbeat/2010/04/30/data-points-energy-metals-271/ [4/30/10]

6 - dealbook.blogs.nytimes.com/2010/04/28/spains-debt-rating-cut-as-finance-officials-meet/4/28/10]

7 - cnbc.com/id/36738472 [4/30/10]

8 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=4%2F30%2F09&x=0&y=0 [4/30/10]

9 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [4/30/10]

10 - treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]