Weekly Market Wrap – July 20 2012

Weekly Market Wrap:  Stocks enjoyed a sixth straight week of gains on positive economic news from the US and overseas.

For The Week

  • The S&P 500 Index + 0.87% to 1,418.16
  • Oil + 3.06% to $96.19
  • Gold -0.27%  to $1,615.90
  • Dollar was flat at $82.52

Year-To-Date for the major indexes:

 

  • The S&P index +12.77%
  • The Dow Jones Index +8.66%
  • The NASDAQ Index +18.10%
  • The Russell 2000 Small cap Index +10.65%
  • EAFE International Index +5.23%
  • 10 Year Treasury Yield at 1.82%
  • 30 Year Treasury Yield at 2.93%

 

On Monday stocks slipped 2 points on light volume as Japan’s 2nd quarter GDP missed and no major economic data was reported in the US.

Tuesday stocks were basically flat on moderate volume as early morning gains lost steam.  Overseas French and German GDP figures beat estimates.  In the US July retail sales were strong, producer prices were higher and small business optimism declined.

Wednesday stocks added 2 points on light volume as consumer prices were in-line, industrial production beat expectations, NY manufacturing missed, mortgage applications declined and home builder sentiment was stronger than expected.

Thursday stocks surged 10 points on light volume as reports out of Spain indicated that their bank bailout is imminent and German Chancellor Merkel issued some positive comments on the Euro-bailout.  In the US jobless claims were in-line with expectations and housing starts dropped but some internal data was positive.

Friday stocks added 2 points on moderate volume as consumer sentiment was up and the index of leading economic indicators rose more than expected.

 

 

Takeaways from this week:

  • Mostly positive news on the US economy this week.  I really liked the increase in the leading economic indicators and the July retail sales numbers.  Job numbers were stable and the homebuilder sentiment pointed to continual improvement in the housing sector.  Manufacting continues to struggle with the NY index declining.
  • Overseas news was mostly positive as well with stronger-than-expected GDP numbers out of the major European economies and positive comments from the German Chancellor Merkel re-enforcing the European union status-quo.
  • Trading has been very light this summer which makes the current stock market rally less credible.  It will be interesting as the traders return from their summer vacations and the political climate heats up this fall.

 

Mortgage rates were mostly flat this week.  The national averages as reported by Bloomberg indicate a 15-year rate of 3.68% and a 30-year rate of 2.98%. These rates are as of 08/17/2012 and may include points.

 

What to watch for on the economic calendar next week:
Monday –No Major Data
Tuesday –No Major Data
Wednesday – Existing Home Sales / FOMC Meeting Minutes
Thursday – Weekly Jobless Claims / New Home Sales
Friday – Durable Goods Orders

 

 

Ronald J. VanSurksum, CFP®
Advanced Asset Management, LLC
August 20, 2012