Presented by Mark Lund, The Investor Coach.

QUOTE OF THE WEEK:
“The world demands the qualities of youth: not a time of life but a state of mind,
a temper of will, a quality of the imagination, a predominance of courage over timidity
of the appetite for adventure over the love of ease.” – Robert F. Kennedy

Existing home sales fall … and mortgage rates fall further
The June existing home sales figures from the National Association of Realtors show a 5.1% drop from May, an effect from the closing of the deadline for federal homebuying credits. On the positive side, NAR reports that sales are up 9.8% from a year ago. Interest rates on conventional home loans hit a record low of 4.56% in Freddie Mac’s July 21 survey; average rates on 15-year FRMs also fell to a two-decade low of 4.03%.^1,2

Long-term jobless benefits extended
President Obama extended emergency unemployment benefits for about three million Americans Thursday, not long after the measure made it past strong opposition in the Senate. The program had ended in June; Obama’s signature extends it for six more months.³

FDIC insurance permanently bumped up to $250,000
This is a byproduct of the financial reform bill. The current $250,000 FDIC insurance limit for banks and credit unions was set to expire in 2013. Incidentally, the $250,000 ceiling has been made retroactive with regard to the six U.S. banks that failed from January 1, 2008 – October 3, 2008, such as IndyMac.⁴

Conference Board’s leading indicators retreat 0.2%
They lost a little steam in June, but they beat expectations: economists surveyed by Thomson Reuters had expected the CB index to fall 0.3%. May’s increase was revised upward to 0.5%.⁵

Dow gains 300+ points in a week
The DJIA settled at 10,424.62 Friday, gaining 0.99% last week. The S&P 500 and NASDAQ respectively rose to 1,102.66 and 2,269.47. Strong earnings reports helped the Dow advance by triple digits on Thursday, and when 84 of 91 European banks passed an EU stress test, the DJIA climbed 102.32 on Friday. On the NYMEX, oil futures slipped a little more than 3% last week to close at $78.98 Friday.⁶

Last week’s riddle: Observe the following sequence of numbers: 11, then 1,331, then 161,051, then 19,487,171. Given this sequence, what would the next number be?

Last week’s riddle answer: 2,357,947,691. The numbers are 11 to the first power, 11 to the third power, 11 to the fifth power and 11 to the seventh power. Therefore, the missing number is 11 to the ninth power.

Citations.
1 – realtor.org/press_room/news_releases/2010/07/ehs_june_above [7/22/10]
2 – mercurynews.com/breaking-news/ci_15576555 [7/22/10]
3 – washingtonpost.com/wp-dyn/content/article/2010/07/22/AR2010072203825.html [7/22/10]
4 – usatoday.com/money/industries/banking/2010-07-22-regs22_ST_N.htm [7/22/10]
5 – usatoday.com/money/economy/2010-07-22-jobless-claims_N.htm [7/22/10]
6 – cnbc.com/id/38382997 [7/23/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%23F2%2F09&x=0&y=0 [7/23/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%23F2%2F09&x=0&y=0 [7/23/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F23%2F09&x=0&y=0 [7/23/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F22%2F05&x=0&y=0 [7/23/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F22%2F05&x=0&y=0 [7/23/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F22%2F05&x=0&y=0 [7/23/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F24%2F00&x=0&y=0 [7/23/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F24%2F00&x=0&y=0 [7/23/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F24%2F00&x=0&y=0 [7/23/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [7/23/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [7/23/10]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]

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:
“To be humble to superiors is duty, to equals courtesy, to inferiors nobleness.”– Ben Franklin

Consumer prices decrease a bit; consumer sentiment drops notably
In June, the Consumer Price Index fell for the third month in a row, heading south 0.1%. Analysts thought the June reading would be flat. The Labor Department noted that core CPI did rise 0.2% last month, largely due to rent costs increasing. The last time CPI went negative for three straight months was October-December 2008. Separately, the preliminary July Reuters/University of Michigan consumer sentiment index came in at 66.5 compared to 76.0 in June – analysts expected a number in the mid-seventies.¹

Dodd-Frank bill off to Obama’s desk
The Senate passed the Dodd-Frank Wall Street Reform and Consumer Protection Act Thursday by a 60-39 vote, with President Obama’s signature expected next week. The legislation is intended to protect consumers in the financial arena and prevent a repeat of TARP. Detractors think it gives too much power to regulators and might even open the door for further bailouts. House Minority Leader John A. Boehner (R-OH) called it “killing an ant with a nuclear weapon.”²

Shops sell less in June
Retail sales were down 0.5% last month, according to the Commerce Department, marking the second straight month of retreat. Additionally, business inventories gained 0.1% for June (the fifth monthly gain in a row for that category).³

Producer prices fall 0.5% last month
The trend here may look deflationary: as with the CPI, this was the third straight monthly decline. However, the Bureau of Labor Statistics noted that core PPI increased by 0.1% for June.⁴

Friday selloff means a down week
Stocks were doing well last week until the market saw the latest consumer confidence and big-bank revenue reports. As a consequence, a seven-day Dow win streak ended. The S&P 500 lost 1.21% last week, concluding Friday’s market day at 1,064.88. The NASDAQ only lost 0.79% to 2,179.05 and the DJIA slipped 0.98% last week to settle Friday at 10,097.90.⁵

Last week’s riddle: Name the number that is 5 greater than the number which is one-fifth of one-fifth of one-half of 1050.

Last week’s riddle answer: 26. (As in 1050 ÷ 5 = 525 ÷ 5 = 105 ÷ 5 = 21 + 5 = 26.)

Citations.
1 – reuters.com/article/idUSTRE65M2WK20100716 [7/16/10]
2 – latimes.com/business/la-fi-financial-reform-20100716,0,2303004.story [7/16/10]
3 – online.wsj.com/article/SB10001424052748703792704575366743747967242.html [7/15/10]
4 – theatlantic.com/business/archive/2010/07/producer-prices-fell-by-05-in-june/59799/ [7/15/10]
5 – cnbc.com/id/38282532 [7/16/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%16F2%2F09&x=0&y=0 [7/16/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%16F2%2F09&x=0&y=0 [7/16/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F16%2F09&x=0&y=0 [7/16/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F15%2F05&x=0&y=0 [7/16/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F15%2F05&x=0&y=0 [7/16/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F15%2F05&x=0&y=0 [7/16/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F17%2F00&x=0&y=0 [7/16/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F17%2F00&x=0&y=0 [7/16/10]
6 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F17%2F00&x=0&y=0 [7/16/10]
7 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [7/16/10]
7 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [7/16/10]
8 – treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]

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:
“Each morning when I open my eyes I say to myself: I, not events, have the power to make me happy or unhappy today. I can choose which it shall be. Yesterday is dead, tomorrow hasn’t arrived yet. I have just one day, today, and I’m going to be happy in it.” – Groucho Marx

Service sector grows; pace of expansion moderates
Last week, the Institute for Supply Management reported its June non-manufacturing index at 53.8. The index had come in at 55.4 in March, April and May. So we are still seeing growth in the service sector, just at a slightly slower rate. Economists polled by MarketWatch were expecting a 54.5 reading. The 53.8 is the lowest mark since February, but the index has been above 50 (indicating growth) all year.¹

Continuing unemployment claims reach a 9-month low
Thursday, the Labor Department announced that 4.41 million people were receiving jobless benefits after an initial week of aid during the week of June 26. That is the lowest such figure since November.²

Sales up 3.1% over last year at major retailers
That’s what a Thomson Reuters survey of 28 big mall chains just found – June retail purchases at these shops were 3.1% better than in June 2009. The most notable year-over-year gain among the 28 store brands? Nordstrom’s, where sales were up 14.1% in June from 12 months ago.³

Wholesale inventories build in May
They increased 0.5% in that month as wholesale sales fell 0.3%. In year-over-year figures, the Commerce Department said stockpiles were down 2.1% from May 2009, while wholesale sales had increased 15.1%.⁴

Bulls stampede as confidence returns
The first glimmer of a new earnings season and good news about jobless claims motivated buying on Wall Street. Last week, the DJIA gained 5.28%, settling at 10.197.72 Friday; the NASDAQ and S&P 500 respectively gained 5.00% and 5.41% in the best week in nearly a year for stocks.⁵

Note: last week’s article mentioned that the federal homebuyer tax credit had been extended through September 30. Please note, however, that only the credit has been extended – not the deadline for contracts. The deadline to buy (or enter into a binding contract to buy) a principal residence was April 30.⁶

Last week’s riddle: It can certainly be measured, yet it has no length, width or height. What is it?

Last week’s riddle answer: The temperature.

Citations.
1 – marketwatch.com/story/us-service-sector-weakens-a-bit-in-june-2010-07-06 [7/6/10]
2 – cnbc.com/id/38144446/ [7/8/10]
3 – articles.latimes.com/2010/jul/08/business/la-fi-retail-sales-20100707 [7/8/10]
4 – online.wsj.com/article/SB10001424052748704075604575356804274113436.html [7/9/10]
5 – cnbc.com/id/38171128 [7/9/10]
6 – irs.gov/newsroom/article/0,,id=204671,00.html [7/6/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%9F2%2F09&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%9F2%2F09&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F9%2F09&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F8%2F05&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F8%2F05&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F8%2F05&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F10%2F00&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F10%2F00&x=0&y=0 [7/9/10]
7 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F10%2F00&x=0&y=0 [7/9/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [7/9/10]
8 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [7/9/10]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2000/ofm11200.pdf [7/12/00]

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:
“You are never too old to set another goal or to dream a new dream.”– Les Brown

Jobless rate drops to 9.5%

The Labor Department said 83,000 new jobs were created in the private sector in June, yet non-farm payrolls shrank by 125,000 positions (an effect of temporary U.S. Census workers being laid off). Still, the 0.2% drop in unemployment was considerably better than the 0.1% increase anticipated on Wall Street.¹

Gains in personal spending, personal income & personal savings

Consumer spending rose by 0.2% as incomes climbed 0.4% in May, the Commerce Department stated last week. The personal savings rate reached 4.0% in May, a high unseen since September 2009. So consumers are aiding the recovery, albeit cautiously.²

$8K homebuyer tax credit is back

The real estate market got some relief Friday morning as President Obama signed an extension of the federal homebuyer tax credit ($8,000 for first-time home purchasers and $6,500 for existing homeowners who move). The credit is now extended until September 30.³

Cheapest fixed-rate mortgages in decades

Right now, conventional home loans are almost as cheap as they were in the 1950s. The national average interest rate on 30-year FRMs fell to 4.58% last week, according to Freddie Mac’s final June estimate. This is the lowest rate Freddie Mac has recorded since the start of its Primary Mortgage Market Survey.⁴

Surprise drop in factory orders, but ISM index shows further growth

Factory orders fell 1.4% in May. Economists surveyed by Bloomberg had forecast a 0.5% slip. Minus transportation orders, the category was down 0.6% for the month. The Institute for Supply Management’s June manufacturing index slipped to 56.2 from 59.7 in May, but that still means growth.^5,6

Wall Street in sell mode

It seemed like every market day started with a descent last week. The S&P 500 ended the week at 1,022.58, the Dow at 9,686.48, and the NASDAQ at 2,091.79. It was rough going – on the week, the marquee U.S. indices lost between 4.5%-5.9%. On June 30, the yield on the 10-year Treasury note fell to 2.95%, which was the first time it went below 3% since April 2009.^4,7

Last week’s riddle: Can you determine four consecutive prime numbers that add up to 220?

Last week’s riddle answer: 47 + 53 + 59 + 61 = 220.

Citations.
1 – forbes.com/2010/07/02/labor-markets-bumpy-road-markets-economy-jobs-unemployment.html [7/2/10]
2 – voices.washingtonpost.com/economy-watch/2010/06/may_income_spending_and_person.html [6/28/10]
3 – marketwatch.com/story/home-buyers-win-more-time-to-claim-tax-credit-2010-07-02 [7/2/10]
4 – cnbc.com/id/38037896 [7/1/10]
5 – dailyfinance.com/story/May-factory-orders-fall-economic-slowdown/19539948/ [7/2/10]
6 – bloomberg.com/news/2010-07-01/u-s-manufacturing-grows-at-slower-pace-than-forecast-in-ism-s-june-index.html [7/1/10]
7 – cnbc.com/id/38064102 [7/2/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F2%2F09&x=0&y=0 [7/2/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F2%2F09&x=0&y=0 [7/2/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F2%2F09&x=0&y=0 [7/2/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F1%2F05&x=0&y=0 [7/2/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F1%2F05&x=0&y=0 [7/2/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F1%2F05&x=0&y=0 [7/2/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=7%2F3%2F00&x=0&y=0 [7/2/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=7%2F3%2F00&x=0&y=0 [7/2/10]
8 – bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=7%2F3%2F00&x=0&y=0 [7/2/10]
9 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield.shtml [7/2/10]
9 – ustreas.gov/offices/domestic-finance/debt-management/interest-rate/real_yield_historical.shtml [7/2/10]
10 – 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.