For the second year in a row, bulls ruled Wall Street. When the closing bell sounded on December 31, the S&P 500 was at 1,257.64, having gained 12.78% for 2010. The Dow finished 2010 at 11,577.51, representing an 11.02% year-over-year advance. The NASDAQ wrapped up 2010 at 2,652.87, posting a 16.91% yearly gain. The Russell 2000 also had a terrific year, finishing +25.31% after going +7.79% for December.1
FEWER INITIAL CLAIMS … AND LESS CONFIDENCE?
While the University of Michigan’s final December consumer sentiment survey showed consumer confidence at a 6-month peak, the Conference Board’s December poll declined to a 52.5 reading. Perhaps as RBS Securities Inc. economist Omair Sharif noted at Bloomberg.com, “we should watch what consumers do and not what they say.” Here’s a development that might improve consumer sentiment: weekly jobless claims dropped to a 2-year low in the week that ended Christmas Day. The 388,000 initial claims filed that week were the smallest number since July 2008.2,3
IMPROVED PENDING HOME SALES
The National Association of Realtors reported a 3.5% increase in the category for November. NAR’s pending home sales index still came in 5.0% below its November 2009 mark, but this was the second straight monthly improvement.4
CASE-SHILLER: HOME PRICES DOWN 0.8%
The latest Standard & Poor's/Case-Shiller home price index shows an 0.8% decline in housing prices across 20 cities from October 2009 to October 2010. A 1.0% overall decline in prices last October contributed to the year-over-year retreat.5
OIL, GOLD & COPPER OUTPACE STOCKS
Gold prices rose 29.76% on the COMEX in 2010. That is the best year for gold since 2007; the precious metal climbed $41.10 last week to finish December at $1,421.10 per ounce. Oil futures went +14.27% in the fourth quarter to finish the year up 15.15% at $91.38 a barrel. Copper gained 33.42% in 2010, concluding the year at $4.44 per pound.6
COMING THIS WEEK: Monday brings the Institute for Supply Management’s December manufacturing report and data on November construction spending. Tuesday, we get data on November factory orders, the most recent FOMC minutes and new estimates of auto and truck sales. Wednesday brings the ISM December service sector report. Thursday, we have new initial and continuing claims numbers. Friday, we get the December unemployment report from the Labor Department.
WEEKLY QUOTE
“And as we let our own light shine, we unconsciously give other people permission to do the same.”
– Nelson Mandela
WEEKLY TIP
Here’s a question for 2011: how are your current lifestyle costs affecting your financial progress? Consider emulating the “millionaire next door” - spend less today and you may end up with more money to save and invest toward lifetime financial objectives.
Best Regards,
Kevin Kroskey
Citations.
1 - cnbc.com/id/40865401 [12/31/10]
2 - bloomberg.com/news/2010-12-28/consumer-confidence-in-u-s-unexpectedly-falls-on-outlook-for-job-market.html [12/28/10]
3 - marketwatch.com/story/weekly-jobless-claims-drop-below-400000-2010-12-30?dist=afterbell [12/30/10]
4 - realtor.org/press_room/news_releases/2010/12/pending_gradual [12/30/10]
5 - reuters.com/article/idUSN2824569820101228 [12/28/10]
6 - blogs.wsj.com/marketbeat/2010/12/31/data-points-energy-metals-430/ [12/31/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=12%2F31%2F09&x=0&y=0 [12/31/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=12%2F31%2F09&x=0&y=0 [12/31/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=12%2F31%2F09&x=0&y=0 [12/31/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=12%2F30%2F05&x=0&y=0 [12/31/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=12%2F30%2F05&x=0&y=0 [12/31/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=12%2F30%2F05&x=0&y=0 [12/31/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=DJIA&close_date=12%2F22%2F00&x=0&y=0 [12/31/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=COMP&close_date=12%2F22%2F00&x=0&y=0 [12/31/10]
7 - bigcharts.marketwatch.com/historical/default.asp?detect=1&symbol=SPX&close_date=12%2F22%2F00&x=0&y=0 [12/31/10]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/31/10]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/31/10]
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 party, nor their affiliates. This information should not be construed as investment, tax or legal 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. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. 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 assistance is needed, the reader is advised to engage the services of a competent professional.
