Presented by Mark Lund, The Investor Coach.

QUOTE OF THE WEEK:
“The measure of success is not whether you have a tough problem to deal with,
but whether it is the same problem you had last year.”– John Foster Dulles

Minor deflation takes pressure off the Fed.
The Consumer Price Index retreated 0.2% for May, following a 0.1% decline in April. Energy prices fell 2.9% last month, leading the CPI downward. (Core CPI did advance 0.1% in May.) Across the last 12 months, the CPI has risen 2.0%, with core CPI up 0.9% – the smallest annual gains since 1966. While May’s wholesale prices were 5.3% above levels of a year ago, the Labor Department said that PPI fell 0.3% on the month, which was less than the 0.5% reduction forecast by economists polled by Reuters. Translation: the Federal Reserve has no compulsion to raise interest rates.^1,2

Will gold hit $1,300 this summer?
The precious metal got a little closer to that psychologically significant benchmark on Friday. Gold settled at a new record close – $1,258.30 an ounce. Since the end of 2009, gold prices have gained almost 15%.³

As tax credits expire, housing starts decelerate.
In real estate, the year-over-year numbers often tell the real story, rather than the “weather” indicated by the month-to-month statistics. So we should be encouraged by the fact that May’s housing starts were 7.8% above May 2009 levels. Still, they were down 10.0% from April to their lowest level in five months. The Commerce Department also reported 17.2% fewer permits for single-family home construction in May.⁴

Industrial output & leading indicators rise.
Factory production went north by 1.2% for May. The Conference Board’s leading indicators index gained 0.4% for May after a flat April. Across the last six months, the CB index has seen 3.9% growth.^2,5

Stocks move back into positive territory.
The S&P 500 closed the week at 1,117.51, the DJIA at 10,450.64 and the NASDAQ at 2,309.80. All three marquee U.S. indices went back to being positive YTD last week.⁶

Last week’s riddle: Four cars approach an intersection with four-way stop signs simultaneously, each car coming from a different direction. After stopping, the drivers all accelerate at the same time. However, there is no accident. How is this possible?

Last week’s riddle answer: All four cars make right turns.

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Citations.
1 – marketwatch.com/story/us-may-cpi-falls-02-on-lower-gas-prices-2010-06-17-83600 [6/17/10]
2 – cnbc.com/id/37725637/ [6/16/10]
3 – cnbc.com/id/37768097 [6/18/10]
4 – voices.washingtonpost.com/economy-watch/2010/06/housing_starts_down_in_may.html [6/16/10]
5 – marketwatch.com/story/may-leading-indicators-rise-slower-growth-seen-2010-06-17-104400 [6/17/10]
6 – usatoday.com/money/default.htm [6/18/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=6%2F18%2F09&x=0&y=0 [6/18/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=6%2F18%2F09&x=0&y=0 [6/18/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=6%2F18%2F09&x=0&y=0 [6/18/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=6%2F17%2F05&x=0&y=0 [6/18/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=6%2F17%2F05&x=0&y=0 [6/18/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=6%2F17%2F05&x=0&y=0 [6/18/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=6%2F19%2F00&x=0&y=0 [6/18/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=6%2F19%2F00&x=0&y=0 [6/18/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=6%2F19%2F00&x=0&y=0 [6/18/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [6/18/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [6/18/10]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]

This material was prepared by Peter Montoya Inc., and does not necessarily represent the views of the presenting Representative’s Broker/Dealer. This information 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. 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 your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. www

Presented by Mark Lund, The Investor Coach.

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

(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.

Riddle of the week. Four cars approach an intersection with four-way stop signs simultaneously, each car coming from a different direction. After stopping, the drivers all accelerate at the same time. However, there is no accident. How is this possible?

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

Last week’s riddle: Many people assume that a particular four-word phrase appears on every type of U.S. coin – but they are wrong. What four words do appear on every U.S. coin?

Last week’s riddle answer: United States of America.

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]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=6%2F11%2F09&x=0&y=0 [6/11/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=6%2F11%2F09&x=0&y=0 [6/11/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=6%2F10%2F05&x=0&y=0 [6/11/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=6%2F10%2F05&x=0&y=0 [6/11/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=6%2F10%2F05&x=0&y=0 [6/11/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=6%2F12%2F00&x=0&y=0 [6/11/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=6%2F12%2F00&x=0&y=0 [6/11/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=6%2F12%2F00&x=0&y=0 [6/11/10]
7 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [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]

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of the presenting Representative’s Broker/Dealer. This information 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. 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 your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Presented by Mark Lund, The Investor Coach.

Quote of the week. “We can only be said to be alive in those moments when our hearts are conscious of our treasures.” – Thornton Wilder

Jobless rate ticks down 0.2%. The news didn’t impress Wall Street: while May’s unemployment rate fell to 9.7% and the economy added 431,000 jobs, 390,000 of them represented temporary U.S. Census Bureau hires. Still, the number was better than the 9.8% reading economists expected.¹

ISM: continuing expansion in key sectors. For the tenth straight month, the Institute for Supply Management’s manufacturing index showed growth, though May’s 59.7 reading came under April’s 60.4 mark. The Institute’s non-manufacturing index read 55.4 again for May; it has shown the service sector expanding for the last five months.^2,3

April sees rise in pending home sales. Spurred by the federal tax credit deadline, more buyers rushed to sign contracts. The National Association of Realtors reported its pending home sales index at 110.9 for April, a 6.0% gain from March and the highest reading since October.⁴

Factory orders up 1.2%. The April increase reported by the Commerce Department was actually below the 1.8% gain forecast in a Reuters poll of economists; March’s gain was revised up to 1.7%.⁵

Stocks fight for stability. The Dow closed below 10,000 Friday as Wall Street dissected the May jobless report and glimpsed new headlines about Hungary facing a potential debt crisis. It was a volatile week and ultimately a losing week, with the Dow ending at 9,931.22, the NASDAQ at 2,219.17 and the S&P 500 at 1,064.88.⁶

(Source: CNBC.com, BigCharts.com, ustreas.gov, bls.gov, 6/4/10)^6,7,8,9
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. Many people assume that a particular four-word phrase appears on every type of U.S. coin – but they are wrong. What four words do appear on every U.S. coin?

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

Last week’s riddle: Yesterday was Wednesday’s tomorrow. Tomorrow is Sunday’s yesterday. Given those circumstances, what day would today be?

Last week’s riddle answer: Friday.

Citations.
1 - blogs.barrons.com/stockstowatchtoday/2010/06/04/dow-sp-futures-sink-on-disappointing-jobs-number/ [6/4/10]
2 – ism.ws/ismreport/mfgrob.cfm [6/1/10]
3 – ism.ws/ISMReport/NonMfgROB.cfm [6/3/10]
4 – abcnews.go.com/Business/wireStory?id=10805353 [6/2/10]
5 – reuters.com/article/idUSN0219014320100603?type=marketsNews [6/3/10]
6 – cnbc.com/id/37508601 [6/4/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=6%2F4%2F09&x=0&y=0 [6/4/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=6%2F4%2F09&x=0&y=0 [6/4/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=6%2F4%2F09&x=0&y=0 [6/4/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=6%2F3%2F05&x=0&y=0 [6/4/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=6%2F3%2F05&x=0&y=0 [6/4/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=6%2F3%2F05&x=0&y=0 [6/4/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=6%2F5%2F00&x=0&y=0 [6/4/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=6%2F5%2F00&x=0&y=0 [6/4/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=6%2F5%2F00&x=0&y=0 [6/4/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [6/4/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [6/4/10]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of the presenting Representative or the Representative’s Broker/Dealer. This information 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. 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 your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Presented by Mark Lund, The Investor Coach.

Quote of the week. “Fun is a good thing, but only when it spoils nothing better.” – George Santayana

Personal spending flat for April. However, wages rose 0.4% and disposable personal incomes went up 0.5% (the biggest increase in almost a year). April was the first month since September in which consumer spending didn’t increase.^1,2

Home sales rise. Federal tax credits expired in April, and these numbers reflect it: the Commerce Department said new home sales were up 14.8% for the month (they were also 47.8% above April 2009 levels). The National Association of Realtors noted a 7.6% gain in existing home sales in April.³

Sentiment indexes improve. The final University of Michigan/Reuters survey for May hit 73.6, up from a 72.2 reading in late April. The Conference Board’s consumer index hit 63.3, a level unseen since September 2008.⁴

Durable goods orders rise 2.9%. The Commerce Department report showed transportation orders behind the April gain, which topped the 1.3% increase forecast by economists.⁵

Hopefully, June will be better. The poorest month for equities since November 2008 finally ended. The DJIA closed May at 10,136.63. As for the NASDAQ and S&P 500, they stood respectively at 2,257.04 and 1,089.41 as the Memorial Day weekend began (Wall Street resumes trading on Tuesday). Even after the May selloff, the Russell 2000 was +5.79% on the year through the weekend.⁶

(Source: CNBC.com, BigCharts.com, ustreas.gov, bls.gov, 5/28/10)^6,7,8,9
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. Yesterday was Wednesday’s tomorrow. Tomorrow is Sunday’s yesterday. Given those circumstances, what day would today be?

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

Last week’s riddle: The railings on a 60-yard-long walkway have ornamental sculptures every 12 yards on both sides, starting at the east and west ends of the walkway. How many total sculptures are there on the walkway?

Last week’s riddle answer: 12 sculptures total, as there are 6 per side if they occur every 12 yards (0-12-24-36-48-60).

Citations.
1 - bea.gov/newsreleases/national/pi/pinewsrelease.htm [5/28/10]
2 – investmentadvisor.com/news/2010/5/Pages/Consumer-spending-flat-personal-income-rises-04-sentiment-inches-up.aspx [5/28/10]
3 – online.wsj.com/article/SB10001424052748704717004575268173355581314.html [5/28/10]
4 – thestreet.com/story/10769732/1/consumer-sentiment-holds-steady.html [5/28/10]
5 – forbes.com/2010/05/26/durable-goods-manufacturing-markets-economy-transportation.html [5/26/10]
6 – cnbc.com/id/37396837 [5/28/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=5%2F28%2F09&x=0&y=0 [5/28/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=5%2F28%2F09&x=0&y=0 [5/28/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=5%2F28%2F09&x=0&y=0 [5/28/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=5%2F27%2F05&x=0&y=0 [5/28/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=5%2F27%2F05&x=0&y=0 [5/28/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=5%2F27%2F05&x=0&y=0 [5/28/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=5%2F30%2F00&x=0&y=0 [5/28/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=5%2F30%2F00&x=0&y=0 [5/28/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=5%2F30%2F00&x=0&y=0 [5/28/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [5/28/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [5/28/10]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [1/12/00]

This material was prepared by Peter Montoya Inc, and does not necessarily represent the views of the presenting Representative’s Broker/Dealer. This information 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. 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 your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.