Weekly Commentary

June 25, 2012

06.25.12

U.S. stocks were mixed last week with the S&P 500 slightly negative and the Nasdaq Composite mildly positive.  Economic data was light although a notable positive was in the housing sector with housing permits up 7.9%. However, the markets were focused on the conclusion of the FOMC meeting on Wednesday.  The U.S. economy has entered another soft patch and investors were hoping for more policy easing to stimulate the economy.

This week we’ll get more housing data with the S&P/Case-Shiller home price index on Tuesday. The chart below shows the seasonally adjusted change in house prices. The last two months have been positive, first back-to-back gains since the spring of 2010.

Friday we’ll get an update on Personal Income & Spending which provides good insight into the health of the consumer. Keep in mind that 70% of our economy is derived from personal consumption so it is important to understand the state of the consumer. Below is a chart of U.S. gas prices over the last 18 months. Falling energy prices are giving consumers a much welcome break from earlier this year.


“Concentrate all your thoughts upon the work at hand. The sun’s rays do not burn until brought to a focus.”
Alexander Graham Bell