Weekly Economic Update July 30, 2012

August 03, 2012  |   News


The good news is that the University of Michigan’s final July index of consumer sentiment improved from its 72.0 preliminary reading to a final mark of 72.3. Still, that represents a 2012 monthly low for the gauge, which had finished June at 73.2.1

In year-over-year terms, things look sunny: new home sales were up 15.1% in June compared with June 2011 and pending home sales were 9.5% improved from a year before. June reports from the Census Bureau and National Association of Realtors were respectively gloomy, however: new home sales dropped an alarming 8.4% after two months of gains, and contracts to purchase existing homes decreased by 1.4%.2,3

The federal government’s second estimate of Q2 GDP (+1.5%) represents the tamest growth since Q3 2011. June’s durable goods orders beat forecasts, registering a 1.6% increase (economists polled by Briefing.com had predicted a gain of 0.3%).1,4,5

How could that happen with such negative indicators? Two words: renewed hope. Thursday, European Central Bank president Mario Draghi said the ECB would do whatever is needed to save the euro; Friday, Draghi was reportedly talking with Germany’s central bank about coordinated sovereign debt purchases. So the Dow (+1.97% to 13,075.66), NASDAQ (+1.12% to 2,958.09) and S&P 500 (+1.71% to 1,385.97) all did well last week. COMEX gold rose 2.22% last week to end Friday at $1,618.00; oil settled at $90.13 Friday, as prices slipped 1.85% across five days.1,4,6

THIS WEEK: Monday, earnings from Anadarko and HSBC are in. Tuesday, June consumer spending data and May’s Case-Shiller Home Price Index arrive along with Q2 results from Aetna, Pfizer, Deutsche Bank, Goodyear, DreamWorks, BP, Honda, UBS, Valero and Electronic Arts. Markets will watch Washington on Wednesday as a Federal Reserve policy meeting ends; July’s ISM manufacturing index, July auto sales figures and earnings from MasterCard, Yelp, Time Warner, Burger King, Marathon Oil, Hartford Financial, Green Mountain Coffee, Comcast, MetLife and Prudential Financial also appear. Will the ECB make a move when its policy meeting concludes Thursday? Stateside, that day brings the latest initial jobless claims, data on June factory orders and Q2 results from Clorox, GM, Kraft, AIG, Sony, Activision Blizzard, LinkedIn, Sunoco and Kellogg. Friday, the June jobs report and ISM’s June service sector index appear; Q2 results come in from Beazer, Viacom, Toyota, NYSE Euronext, Procter & Gamble and Berkshire Hathaway.

Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 7/27/124,7,8,9
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1 – money.msn.com/market-news/post.aspx?post=51f8caab-e29b-4584-b079-effc8020cb48 [7/27/12]
2 – www.cnbc.com/id/48335711 [7/26/12]
3 – www.cbsnews.com/8301-505145_162-57480113/new-home-sales-drop-but-up-for-the-year/ [7/27/12]
4 – money.msn.com/market-news/post.aspx?post=ed48f96d-7a7c-4319-8c50-47ce5224d6c8 [7/27/12]
5 – briefing.com/investor/calendars/economic/2012/07/23-27 [7/27/12]
6 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [7/27/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F27%2F11&x=0&y=0 [7/27/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F27%2F11&x=0&y=0 [7/27/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F27%2F11&x=0&y=0 [7/27/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F27%2F07&x=0&y=0 [7/27/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F27%2F07&x=0&y=0 [7/27/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F27%2F07&x=0&y=0 [7/27/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F26%2F02&x=0&y=0 [7/27/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F26%2F02&x=0&y=0 [7/27/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F26%2F02&x=0&y=0 [7/27/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/27/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/27/12]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm71002.pdf [7/10/02]


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