Weekly Economic Update for the Week of June 14, 2010

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Weekly Economic Update for the Week of June 14, 2010

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Quote of the week. “Your assumptions are your windows on the world. Scrub them off every once in awhile, or the light won’t come in.” – Alan Alda

Retail sales down 1.2% in May. What happened? Perhaps consumers took a break after spending notably in March and April. Auto sales slipped 1.7%; hardware store sales fell 9.3%, possibly influenced by the expiration of homebuyer tax credits.¹

Consumer sentiment rises. Consumers may have bought less recently, but according to the University of Michigan/Reuters consumer sentiment poll, their confidence has increased. June’s preliminary reading was 75.5 – a rise from the final 73.6 May mark. The barometer of current economic conditions reached 82.9; it hasn’t been this high since March 2008.²

Wholesale, business inventories increase. The Commerce Department reported 0.4% gains in both categories for April. Business inventories hit their highest level since last June; wholesale inventories were up for a fourth consecutive month.^2,3

Gold touches $1,250 level. The precious metal hit a new intraday peak last week ($1,254.50) and settled at $1,230.20 per ounce Friday. Gold gained 1.03% last week, and other metals did better: silver futures rose 5.39% and palladium futures were up 4.07%. Copper also advanced 3.00% for the week.⁴

S&P 500 gains 2.51%. Welcome news: from Monday to Friday, the index had its best week since early March. The NASDAQ gained 1.10% and the DJIA gained 2.81% last week, with the Dow settling at 10,211.07.⁵

% Change	Y-T-D	1-Yr Chg	5-Yr Avg	10-Yr Avg
DJIA	-2.08	+16.42	-0.57	-0.33
NASDAQ	-1.13	+20.47	+1.75	-4.05
S&P 500	-2.11	+15.53	-1.78	-2.45
Real Yield	6/11	1 Yr Ago	5 Yrs Ago	10 Yrs Ago
10YrTIPS	1.29%	1.89%	1.74%	4.34%

(Source: CNBC.com, BigCharts.com, ustreas.gov, bls.gov, 6/11/10)^5,6,7,8

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

invested into directly. These returns do not include dividends.

Citations.

1 - cbsnews.com/stories/2010/06/11/business/main6571608.shtml [6/11/10]

2 - cnbc.com/id/37636961/ [6/1/10]

3 - businessweek.com/news/2010-06-09/wholesale-inventories-in-u-s-rose-0-4-in-april-update1-.html [6/9/10]

4 - cnbc.com/id/37648767/page/2/ [6/11/10]

5 - cnbc.com/id/37648767 [6/11/10]

6 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=6%2F11%2F09&x=0&y=0 [6/11/10]

7 - ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [6/11/10]

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