November Monthly Market Commentary

Will 2013 go in the books as the best year for U.S. stocks since the mid-1990s? It may. At the end of November, the S&P 500 was already up 29.12% YTD. November brought more signals of an improving economy, even with a hot housing market cooling off by degrees. The eurozone economy still looked tenuous; China’s economy showed signs of resilience. Prices of gold, oil and other key commodities dropped. Some foreign stock markets outperformed ours, others lost ground. The Federal Reserve made no moves, but its October policy minutes hinted at trimming its monthly bond buying.1

While the S&P 500 is up as much as it is, a diversified 60/40 stock/bond portfolio was up a more modest but still very rewarding 11.42%. Additional index performance shown below.

Early in the month, the Labor Department stated that 204,000 new jobs were created in October, better than the average monthly gain of 190,000 seen during the past year. The jobless rate did tick up to 7.3%; at least that was 2.9% lower than the recessionary peak seen in October 2009. Manufacturing and service sectors appeared healthy judging by the Institute for Supply Management’s purchasing manager indices. ISM’s factory sector gauge reached 56.4 in October (and 57.3 in November, marking a sixth straight monthly advance). Its service-sector PMI rose a full point in October to 55.4.2,3,4

November also brought the federal government’s first estimate of Q3 GDP – a surprisingly good 2.8%. (Analysts polled by MarketWatch had expected a 2.3% reading.) As for the prime factor in GDP, a delayed Commerce Department report on consumer spending noted only a 0.2% gain in September, even as personal incomes increased 0.5%. Retail sales rose a healthy 0.4% in October, however.5,6,7
Respected consumer confidence polls reached different conclusions last month. The Conference Board’s index fell two whole points to 70.4, far underneath the 74.0 reading forecast by The University of Michigan’s final consumer sentiment index for the month offered better news, rising to 75.1.8

Annualized inflation was amazingly tame – just 1.0% as of October, thanks to a 0.1% decline in the Consumer Price Index. As for wholesale prices, October’s Producer Price Index showed a 0.2% retreat, and that meant just a 0.3% gain over the past 12 months – the weakest annual wholesale inflation since 2009. Durable goods orders slipped 2.0% in October.7,8,9

As for the Fed, Janet Yellen reassured Wall Street at mid-month with dovish comments at her Senate confirmation hearing, noting that “supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.” Days later, however, the October Fed policy minutes noted that if indicators affirmed the FOMC’s “outlook for ongoing improvement” in the labor market, it would “warrant trimming the pace of [bond] purchases in coming months.”10,11

Lastly, the White House dealt with the backlash over the launch of Less than 27,000 people had enrolled in the federal online insurance exchange in October due to glitches. A November repair effort left the site running much more smoothly at the start of December; CNN estimates that at the end of last month, total enrollment at and the 14 state-run exchanges surpassed 200,000, up from 106,000 at the end of October. Individuals have until December 23 to shop for health coverage effective on January 1.1

The EU jobless rate descended 0.1% in October to 12.1%. That was the good news. Annualized eurozone inflation hit 0.9% last month, rising from 0.7% for October (a 4-year low); retail sales slipped 0.8% in Germany in October following a 0.2% retreat for September. As for eurozone manufacturing, Markit’s PMI for the region reached 51.3 in October and a 2-year peak of 51.6 in November. Great Britain’s factory PMI hit 58.4 in November, the highest reading since February 2011. Not all was well: manufacturing PMIs showed contraction in Spain (48.6) and France (48.4).13,14

Indian manufacturing expanded for the first month since July in November, with HSBC’s PMI reaching 51.3. China’s official PMI was flat last month at 51.4 while HSBC’s PMI declined 0.1 points to 50.8. HSBC PMI readings for South Korea (50.4), Taiwan (53.4) and Vietnam (50.3) all showed growth in November. Japan’s official data stream showed yearly consumer inflation at just 0.6% and just an 0.9% annualized rise in consumer spending.13,15

Performances were quite varied last month. Notable gains: DAX, 4.11%; Nikkei 225, 9.31%; Shanghai Composite, 3.68%; Hang Seng, 2.91%; IPC All-Share, 3.56%; MERVAL, 10.72%; TSX Composite, 0.26%; Global Dow, 1.65%; Europe Dow, 0.73%; DJ STOXX 600, 0.87%; MSCI World Index, 1.59%. These benchmarks racked up November losses: MSCI Emerging Markets Index, 1.56%; Asia Dow, 0.21%; Sensex, 1.76%; ASX, 1.94%; PSE Composite, 5.72%; Jakarta Composite, 5.64%; TAIEX, 0.51%; Bovespa, 3.27%; FTSE 100, 1.20%; CAC 40, 0.11%; RTSI, 5.23%.1,16

Oil ended November at $92.72 as prices fell 3.57% on the month. Other energy futures posted monthly gains: heating oil, 2.70%; unleaded gasoline, 1.59%; natural gas, 10.69%. Gold sunk 5.46%, silver dropped 9.21%, platinum retreated 5.39% and copper lost 1.94%. COMEX gold settled at a mere $1,250.60 on November 29. As for crops, coffee rose 4.04%, cocoa 4.76%, cotton 2.81% and soybeans 4.39%; sugar lost 5.77% in November, corn 2.92% and wheat 1.80%. The U.S. Dollar Index ended November at 80.68 for a 0.60% monthly gain.17,18

The National Association of Realtors announced that October had seen a 3.2% retreat in the pace of existing home sales – and a 0.6% slip in pending home sales. Countering the news of these declines, September’s S&P/Case-Shiller Home Price Index had house prices up 3.2% in Q3 and up 13.3% YTD. October also saw a 6.2% rise in building permits; the annualized gain was 13.9%. (As a consequence of the federal shutdown, new home sales figures for September and October won’t be announced by the Census Bureau until December 4, and the reports on September and October housing starts won’t arrive until December 18.)7,19,20
Between Halloween and November 27, Freddie Mac charted the following mortgage rate movements: 30-year FRMs, 4.10% to 4.29%; 15-year FRMs, 3.20% to 3.30%; 5/1-year ARMs, 2.96% to 2.94%; 1-year ARMs, 2.64% to 2.60%.21
Record closes seemed commonplace last month as the major U.S. indices pushed toward these November 29 finishes: DJIA, 16,086.41; NASDAQ, 4,059.89; S&P 500, 1,805.81. The Russell 2000 gained 3.88% last month to end November at 1,142.89; the CBOE VIX declined 0.36% on the month to settle at 13.70 on November 29.1

The S&P 500 has advanced in each of the past five Decembers, and with the bulls seemingly entrenched on Wall Street, there is little reason to think it might not add to its YTD gain this month. In recent years, December has also been a terrific month for the small caps: across 2008-12, the Russell 2000’s average December gain was 5.01%. Then again, Wall Street is a volatile place – and recent FOMC minutes do raise the possibility of the central bank tapering in December and taking some of the air out of any Santa Claus rally. It could be that stocks advance nicely prior to the December 18 Fed policy announcement and limp through the rest of the month. If the latest bicameral budget reduction committee can’t agree on a plan by the middle of December, investors will have more to fret about. Confidence is still prevalent on Wall Street, however, and the year may end nicely indeed for equities.24

UPCOMING ECONOMIC RELEASES: The data stream for the remainder of 2013 is as follows: September and October new home sales, a new Fed Beige Book and the November ISM service sector PMI (12/4), the second estimate of Q3 GDP out of Washington, the November Challenger job-cut report and October factory orders (12/5), the November employment report, October consumer spending figures and the University of Michigan’s initial December consumer sentiment index (12/6), October wholesale inventories (12/10), November retail sales and October business inventories (12/12), the November PPI (12/13), November industrial output (12/16), the November CPI and the December NAHB housing market index (12/17), the latest Fed policy announcement plus data on September, October and November housing starts and November building permits (12/18), the last estimate of Q3 GDP (12/20), the University of Michigan’s final December consumer sentiment index and Commerce Department figures on November consumer spending (12/23), November new home sales and durable goods orders and October’s FHFA housing price index (12/24), and November pending home sales (12/30)

Best Regards,

Kevin Kroskey, CFP®, MBA

This article adapted with permission from

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October Monthly Market Commentary

A strong market overcame two significant challenges in October – a 16-day closure of most of the federal government, and the threat of a U.S. debt default. Congress broke the stalemate with a short-term, kick-the-can rescue – a deal which guaranteed government funding until January 15 and extended the nation’s borrowing authority until February 7. Investors were relieved, and the S&P 500 added 4.46% to its YTD gain during the month. 

Social Security recipients got a mild increase in payments for 2014, and uninsured individuals who visited mostly got frustrated. Signs of the housing market cooling down a bit emerged, but there was still good news from the sector.1,2

Standard & Poor’s estimates that the October shutdown took 0.6% off Q4 GDP and cost the U.S. economy an estimated $24 billion. It certainly dented consumer confidence: the October Conference Board index showed a one-month drop of 9.0 points to 71.2, and the month’s final University of Michigan consumer sentiment index came in at 73.2, the lowest reading since last November.3,4,5
The impasse in Washington delayed or postponed some regularly scheduled economic reports. We did learn that the jobless rate had ticked down to 7.2% in September, even with only 148,000 new jobs created (economists surveyed by Dow Jones Newswires had forecast a gain of 180,000). Consumer inflation rose 0.2% in September after ticking up 0.1% in August, while wholesale inflation decreased 0.1% in September after a 0.3% August advance. Retail sales retreated 0.1% in September, but were up 0.4% with auto buying factored out. Industrial output increased 0.6% in September, and durable goods orders rose 3.7%.4,5,6  
Many uninsured consumers faced an impasse as they tried to use, the federal government’s new website created to help people shop for health coverage in 36 states. The site was plagued by back-end design and security issues, leading some of its critics to call for the immediate resignation of Health & Human Services Secretary Kathleen Sebelius. Additionally, some insured Americans discovered they would have to buy new coverage in 2014 due to the inability of their current health insurance to meet the standards of the Affordable Care Act.7,8 
In more positive news, the Institute for Supply Management’s manufacturing index rose to 56.4 in October, marking the fifth straight month of expansion. The last ISM report on the service sector (September) also showed expansion at 54.4, although this was a real drop from August’s reading of 58.6.9,10
As expected, the Federal Reserve refrained from tapering its $85-billion-per-month asset purchase program. Noting that “fiscal policy is restraining economic growth,” the Federal Open Market Committee’s October 30 statement also conceded that “the recovery in the housing sector slowed somewhat in recent months.” Social Security announced a 1.5% COLA for 2014, one of the program’s smallest COLAs ever; that works out to an additional $19 a month for the average recipient.11,12
Demand for exports seemed to be driving manufacturing growth in Asia. China’s official purchasing managers index hit 51.4 in October, an 18-month high.  The HSBC/Markit PMI for China also rose to 50.9 in October. Good news, yet a Bloomberg poll of 52 economists projected China’s 2013 GDP at 7.6%, the poorest since 1999. Markit’s factory-sector PMI for Japan climbed 1.7 points in October to 54.2 and Taiwan’s rose to 53.0. October’s Markit manufacturing PMI for India showed sector contraction – it was at 49.6 for a second straight month.13,14
Great Britain’s Markit PMI slipped 0.3 points to a still-impressive 56.0 in October. The combined Markit PMI for the eurozone slipped from 52.2 in September to 51.5 last month, but that reading still marked the fourth consecutive time it was above 50. Eurozone unemployment was at 12.0%, but Markit noted 15 eurozone members reporting “modest growth of activity for the third month running, representing the first period of growth for these countries since early 2011.” Spain had actually emerged from its 2-year recession in Q3, and its jobless rate fell in Q3 as well.13,15
Many benchmarks rose. Across the pond, the DAX gained 5.11% in October, the STOXX 600 3.84%, the CAC 40 3.78% and the FTSE 100 4.17%. Up north, the TSX Composite climbed 4.49%; to our south, the IPC All-Share gained 2.12%. While the Nikkei 225 and Shanghai Composite respectively lost 0.88% and 1.52% for the month, advances were more common in Asia: the Hang Seng added 1.52%, the Jakarta Composite 4.51%, the KOSPI 1.66% and the Sensex 9.21%. Looking at multinational/regional benchmarks, the MSCI World Index was up 3.83% for the month while the MSCI Emerging Markets Index gained 4.76%; the Asia Dow advanced 3.01%, the Europe Dow 4.24% and the Global Dow 4.38%.2,16
Performances were all over the place. While copper lost 0.63% and gold 0.34%, silver futures advanced 1.59% and platinum futures 2.98%. NYMEX crude fell 5.91% on the month and unleaded gasoline retreated 0.51%, but natural gas rose 0.39%. Among the major crop futures, sugar (+4.12%) and cocoa (+1.29%) were the gainers. Soybeans lost only 0.04%, but deeper October losses were in store for wheat (1.69%), corn (3.00%), coffee (7.59%) and cotton (11.50%). The U.S. Dollar Index lost 0.02 points on the month to wrap up October at 80.20.17,18
Existing home sales fell 1.9% in September, but the National Association of Realtors said that the median home price was $199,200 – up 11.7% in the past 12 months, which marked the tenth consecutive month of double-digit annual price increases. August’s overall S&P/Case-Shiller Home Price Index mirrored this trend – it had prices up 12.8% year-over-year, improved from 12.3% in the July edition. NAR noted a 5.6% dip in pending home sales for September. October ended without September new home sales or new residential construction reports from the Census Bureau.4,19
Mortgage rates fell, with one exception. Comparing Freddie Mac’s October 31 and September 26 Primary Mortgage Market Surveys, we see the following decreases: 30-year FRMs, 4.32% to 4.10%; 15-year FRMs, 3.37% to 3.20%; 5/1-year ARMs, 3.07% to 2.96%. Interest rates on 1-year ARMs rose 0.01% in October to 2.64%.20
The S&P 500 closed at 1,756.54 on Halloween, while the Dow settled at 15,545.75 and the NASDAQ at 3,919.71. Small caps pushed higher as well: the Russell 2000 gained 2.45% last month, ending October at 1,100.15.2
As the federal shutdown altered some of the data collection and research processes that normally go into the economic reports out of Washington, the market may take the upcoming editions of those reports with a few grains of salt. Private-sector reports may carry more weight this month and next. There is a sense of normalcy, as the market has again been concentrating on earnings – and normalcy is good for a mature bull market. The next big test for stocks will come in mid-December – will the new congressional supercommittee meet its deadline to craft a multi-year deficit reduction plan for the federal budget? If it doesn’t, we may have a replay of the October impasse on Capitol Hill – and a sense of déjà vu on Wall Street.
UPCOMING ECONOMIC RELEASES: As you will notice, the data stream is a bit off-kilter for November. Just ahead, we have August and September factory orders (11/4), the October ISM service sector PMI (11/5), September’s Conference Board leading indicators (11/6), the October Challenger job-cut report and the federal government’s delayed first estimate of Q3 GDP (11/7), the Labor Department’s October jobs report, the University of Michigan’s initial November consumer sentiment index and Commerce Department figures on September consumer spending (11/8), September wholesale inventories and October industrial production (11/15), the November NAHB housing market index (11/18), September business inventories, October’s CPI, retail sales and existing home sales and the October 30 FOMC minutes (11/20), the October PPI (11/21), October pending home sales, September and October housing starts and building permits, the September Case-Shiller and FHFA housing price indices, the second estimate of Q3 GDP and the Conference Board’s November consumer confidence survey (11/26), October consumer spending and durable goods orders and the final November University of Michigan consumer sentiment index (11/27). Thanksgiving falls on November 28, and due to the long weekend accompanying the holiday, there will be no further major economic releases until December. When will the Census Bureau put out some new home sales data? A combined September/October report is scheduled to appear December 4.
Best Regards,

Kevin Kroskey, CFP®, MBA

This article adapted with permission from

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2013 Third Quarter Market Review

Daunting Headlines, Remarkable Returns
The threat of a government shutdown virtually guaranteed that the investment markets would close out the third quarter with a whimper rather than a bang.  The S&P 500 index lost 1.1% of its value in the final week of the quarter as the U.S. Congress seemed to be lurching toward a political standstill that would shut down the U.S. government.  All the uncertainty has tended to obscure the fact that most U.S. stock market investors have experienced significant gains so far this year. Despite the rocky final week, the Russell 3000 index gained 6.35% in the most recent three months, posting a 21.30% gain as we head into the final stretch of 2013.
Other U.S. market sectors experienced comparable gains.  
·        Large cap stocks, represented by the Russell 1000 large-cap index returned 6.02% for the quarter, up 20.76% for the year while the widely-quoted S&P 500 index of large company stocks gained 5.32% for the quarter and is up 18.62% since January 1.
·        The Russell midcap index was up 7.70% for the third quarter, and now stands at a 24.34% gain so far this year.
·        Small company stocks, as measured by the Russell 2000 small-cap index, are up 10.21% in the second three months of the year, posting a 27.69% gain in the year's first nine months.
In the first half of the year, any diversification into international stocks was dragging down returns.  No longer.
·        The broad-based EAFE index of larger foreign companies in developed economies rose 10.94% in dollar terms during the third quarter of the year, and is up 13.36% so far this year. 
·        The biggest surprise is Europe: a basket of European stocks rose 13.16% over the past three months, which accounts for virtually all of their returns this year; the index is now up 13.17% for the year.
·        Emerging markets stocks are climbing out of a deep hole that they fell into earlier in the year, returning 5.01% in the past three months, even though the EAFE Emerging Markets index is still down 6.42% for the year. 
Other investment categories are not faring so well.
·        Real estate, as measured by the Wilshire REIT index, fell 1.98% for the quarter, though it is still standing at a 3.84% gain for the year.
·        Commodities, as measured by the S&P GSCI index, reversed their recent slide and rose 5.44% this past quarter, taking them nearly even, just down 0.27% so far in 2013.
·        Gold prices perked up on the uncertainty over the government shutdown, gaining 9.26% in the recent quarter, though gold investors have lost 20.48% on their holdings so far this year. 
Bonds have continued to provide disappointing returns both in terms of yield and total return. 
·         The Barclay's Global Aggregate bond index is down 2.24% so far this year.
·         The U.S. Aggregate index has lost 1.87% of its value in the same time period. 
In the Treasury markets, the year has seen a bifurcated market; declining yields in bonds with 12 month or lower maturities, while longer-term bonds have experienced rising yields and a corresponding decline in the value of the bonds held by investors.  In the past year, the yield on 10-year Treasuries have risen almost a percentage point, to 2.65%, and 30-year bonds are now yielding 3.73%, up 86 basis points over the past 12 months.    
Municipal bonds have seen comparable rate rises; a basket of state and local bonds with 30-year maturities are now yielding 4.32% a year; 10-year munis are returning an average of 2.56% a year.  The rises, of course, have caused losses in muni portfolios.
Going forward, this much we can predict: the recent uncertainties--the paralysis in Congress, worries about the direction of interest rates and whether the Fed is going to stop intervening in the markets--will give way to new worries, new uncertainties, which will make all of us feel in our guts like the world is going to hell in a hand basket.  Meanwhile, disciplined investors can expect to reap the reward over time of accepting market risk and fund their retirement plans and other life goals. They too will focus on things that they can control and ignore the rest—recent uncertainties included.
To Your Prosperity,
Kevin Kroskey, CFP®, MBA
This article adapted with permission from Bob Veres.
Aggregate corporate bond rates:

August Monthly Market Commentary

August threw all kinds of challenges at stocks, and stocks retreated from them. Lackluster economic indicators, resignation that the Federal Reserve might soon taper its stimulus, rising yields on the 10-year note, a bit of cooling in the red-hot housing market, and the threat of U.S. military involvement in Syria all combined to keep the S&P 500 in check. The index slipped 3.13% during the poorest month for U.S. equities since May 2012; gold, silver, oil and the dollar fared much better.1

Most of August’s best economic indicators arrived in the first half of the month. The unemployment rate fell to 7.4% in July, with hiring at a decent pace (payrolls expanding by 162,000 new jobs). The Institute for Supply Management’s July manufacturing PMI showed a reading of 55.4, its service sector PMI a reading of 56.0. Retail sales were up 0.2% in July, with core retail sales (minus volatile car, gas and home improvement purchases) up 0.5%. Toward the end of the month, the Commerce Department revised Q2 GDP up to 2.5% from the initial estimate of 1.7%, a big change from 1.1% growth in Q1 and 0.1% growth in Q4 2012.2,3,4,5

Consumer spending, however, had nudged up just 0.1% in July – economists polled by Reuters had expected a 0.3% rise. Consumer sentiment fell to 82.1 in the final August University of Michigan survey (though the August Conference Board poll showed a 1.4% gain to 81.5). Hard goods orders plunged 7.3% in July after a 3.9% setback in June.1,6

Inflation pressure moderated, however – the overall Consumer Price Index rose 0.2% for July, and so did the core CPI. Year-over-year, the headline CPI advance was 2.0%. The Producer Price Index went flat for July with the core PPI up 0.1%; annualized wholesale inflation was running at 2.1%.7,8

President Obama called for the phase-out of Fannie Mae and Freddie Mac in August, proposing their replacement in the coming years with a new system reliant on private sector purchases of mortgages from lenders, with private capital bearing the bulk of any losses. According to White House officials, new federal government guarantees would help to preserve the fixed-rate 30-year home loan under these circumstances. The Obama administration’s idea of giving private capital a greater role in mortgage lending has bipartisan support – legislation sponsored by Sen. Bob Corker (R-TN) and Sen. Mark Warner (D-VA) is already making its way through Congress – but no real timeline for change has emerged.9
The NASDAQ exchange suffered a “flash freeze” in late August, with a software malfunction interrupting all trades for three hours. NASDAQ took full blame for the snafu, which revived an old debate about the risks of computer-driven trading.10

On August 26, Secretary of State John Kerry stated that Syria’s government had used chemical weapons against its own people. On August 27, the U.S. and other nations were publicly considering a military response and global markets were beset by volatility – on that day, NYMEX crude topped $109 a barrel, the Dow fell 170 points, the CBOE VIX rose 12%, gold went back into a bull market and emerging market stocks hit a 7-week low. Fears of $150 oil emerged. President Obama requested a vote in Congress authorizing an attack on Syria; House and Senate leaders intend to vote on the matter in the week of September 9-13.11,12

August also saw the slide of India’s benchmark currency, the rupee. It had its worst month in 21 years, dropping 8.1% versus the dollar as a $2.2 billion exodus occurred from India’s stock and bond markets over fears of an economic slowdown. Worries about Syria and the related jump in oil prices simply made things worse. How much worse? The rupee’s August decline widened the Indian government’s account deficit so badly (to nearly $90 billion) that the Reserve Bank of India said it would supply dollars directly to local oil importers. Reuters reported that the RBI was seriously considering directing commercial banks to buy gold from private citizens. In better news from the Asia-Pacific region, the official China factory PMI rose to 51.0 in August, a 16-month peak.13,14,15
There were a few notable August advances – TSX Composite, +1.34%; Shanghai Composite, +5.25%; Bovespa, +3.68%. Retreats were more numerous – Hang Seng, -0.70%; Nikkei 225, -2.04%; IPC All-Share, -3.29%; Sensex, -3.75%; DAX, -2.09%; CAC 40, -1.48%; FTSE 100, -3.14%. Multi-country indices also pulled back: the Global Dow lost 2.33% for August, the Asia Dow 1.87%, the MSCI World Index 2.33% and the MSCI Emerging Markets Index 1.90%.16,17i COmposite : the TSX Composite (-2.30%), the  gan'
Investors certainly renewed their appetites for precious metals in August. When it was all said and done, the month saw major gains for silver (19.02%), platinum (6.85%) and gold (4.54%), with gold settling August 30 at $1,396.10 an ounce. Copper, too, gained 4.20% on the month. NYMEX crude finished August at $107.65 per barrel, a 2.32% monthly gain. Natural gas futures advanced 5.80%. In contrast, unleaded gasoline prices managed to fall 0.61%. Soybeans rose 3.97% in August, and cocoa 4.44%; their fortunes were not mirrored by corn (-1.95%), cotton (-2.37%) or wheat (-3.42%). The 7.12% single-month jump in the U.S. Dollar Index was hardly surprising; it finished August at 82.03.18,19

Home buying statistics seemed to show the influence of rising mortgage rates. The National Association of Realtors said existing home sales went +6.5% in July with the sales rate stronger than at any time since March 2007 – but the Census Bureau had new home sales down 13.4% in that month. New home buyers faced higher mortgage rates as they assumed loans for housing yet to be completed. For the record, NAR also noted a 1.3% drop in pending home sales in July.6,20

June’s overall S&P/Case-Shiller Home Price Index had home values rising 12.1% in 12 months, as opposed to 12.2% in the May edition. The Census Bureau said both building permits (+2.7%) and housing starts (+5.9%) increased for July.6,21
Where were mortgage rates at as August ended? Well, between August 1 and August 29, the average interest rate on the 30-year FRM went from 4.39% to 4.51%. As for other loan types across that interval, average rates on 15-year FRMs rose to 3.54% from 3.43%; 5/1-year ARMs saw average rates move from 3.18% to 3.24%. Average rates on the 1-year ARM were at 2.64% in both surveys.22
The Dow also had its worst month since May 2012, ending August at 14,810.31. The NASDAQ concluded the month at 3,589.87, the S&P 500 at 1,632.97, and the Russell 2000 at 1,010.90 (going -3.29% in August). The CBOE VIX rose 26.10% to 16.96.1
The Syria crisis has brought the potential for severe volatility back to Wall Street. Will its impact on stocks be brief and less significant than assumed? Will it prompt a short-term pause in the bull market? Or could things escalate, and rattle investor confidence to the point where YTD gains are severely threatened? This could be the biggest test of the year for equities, and yet stateside there is still a prevalent optimism that the economy is on the way back and that the recovery can continue with less help from the Fed. The current bull market has held up through four years of challenges; let’s hope that it can weather this one and celebrate a fifth anniversary next March.
UPCOMING ECONOMIC RELEASES: September’s roster of key economic announcements looks like this: the August ISM manufacturing index (9/3), a new Federal Reserve Beige Book (9/4), the August ISM non-manufacturing index, the August Challenger job-cut and ADP employment reports and July factory orders (9/5), the Labor Department’s August jobs report (9/6), July wholesale inventories (9/11), the University of Michigan’s initial September consumer sentiment index, August retail sales, July business inventories and the August PPI (9/13), August industrial output (9/16), the August CPI and the September NAHB housing market index (9/17), the September Fed policy announcement and August housing starts and building permits (9/18), August existing home sales and the Conference Board’s August index of leading indicators (9/19), July’s Case-Shiller home price index, the Conference Board’s September consumer confidence survey  and the August FHFA housing price index (9/24), August new home sales and durable goods orders (9/25), August pending home sales and the federal government’s final take on Q2 GDP (9/26), and then the Commerce Department’s report on August consumer spending and the final September University of Michigan consumer sentiment index (9/27).

Best Regards,

Kevin Kroskey

This article adapted with permission from

1 - [8/30/13]
2 -  [8/2/13]
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Future Posts at

Any future blog posts will be done at . Thank you, Kevin Kroskey, CFP, MBA