Weekly Market Recap
July 23, 2012
• Euro-zone finance ministers approved Spain's bankbailout.• 12 people killed in a Colorado movie theater shooting.
• Retail Sales fell -0.5% in June.• CPI: +1.7%oya; Core CPI: +2.2%oya.• Housing Starts rose more than expected.• Jobless Claims came in at 386,000.• Next Week: New Home Sales, Durable Goods, 2Q GDP.
Thought of the Week
In the wake of the financial crisis, both small and largefirms found it difficult to borrow money. Although largebusinesses have since seen borrowing conditionsimprove, the same has not been the case for smallerfirms. However, as shown in this week’s chart, creditconditions for small businesses may be easing;according to a survey conducted by the NationalFederation of Independent Business, the net percentageof small businesses reporting that credit had becomemore difficult to obtain relative to the previous threemonths has declined from its peak of 16% in May 2009to 7% in June 2012. This trend has been confirmed byother lending surveys, and as borrowing conditions forsmall businesses continue to improve, this easier accessto funding could act as a tailwind for economic growth.
Question of the week:
CPI rose 1.7% from a year ago in June 2012; how muchdid gasoline prices fall from June 2011?
Prior week's question:
For May, workers began construction on 26% moresingle family homes than a year ago; when was the lasttime yoy increases were this large?
Answer to prior week's question:
The last time starts on single family homes increased byover 25% year-over-year was April 2010.
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12,57212,21812,77712,823Dow Jones 30
3.282.452.152.1010 Year Municipal
2.931.871.501.4610 Year Treasury
0.318.104.22.168 Year Treasury
0.250.250.250.25Fed Funds Target
2.384.890.430.16MSCI - EAFE
1 week YTD
4.544.073.793.7430 Year Mortgage
0.300.640.480.486 Month CD
78.8776.9479.2178.57¥ per $
1.611.551.551.56$ per £
1.421.301.221.22$ per €
110.941.6318.1614.89Russell 1000 Growth
88.622.6013.9511.29Russell 1000 Value
Wgt AvgMkt Cap(Bill)DividendYieldP/ETrailingP/EForwardIndexCharacteristics
S&P 500 Sector Returns
S & P 5 0 0 F i n a n c i a l s C o n s u m e r S t a p l e s T e l e c o m H e a l t h C a r e C o n s u m e r D i s c r . U t i l i t i e s I n d u s t r i a l s M a t e r i a l s T e c h n o l o g y E n e r g y 2 . 6 1 . 9 1 . 8 0 . 9 0 . 8 0 . 3 0 . 2 - 0 . 4 - 0 . 7 - 2 . 3 0 . 5
S & P 5 0 0 E n e r g y I n d u s t r i a l s M a t e r i a l s U t i l i t i e s C o n s u m e r S t a p l e s F i n a n c i a l s H e a l t h C a r e C o n s u m e r D i s c r . T e c h n o l o g y T e l e c o m 1 7 . 9 1 3 . 1 1 3 . 0 1 1 . 6 1 1 . 6 9 . 6 6 . 8 6 . 8 5 . 8 0 . 6 9 . 6
1 w e e k Y T D
1 w e e k
Y T D
Note: All returns represent total return including dividends.
Chart of the Week
Credit Conditions are Tight but are Showing Signs of Improvement
Net % small businesses reporting more difficulty obtaining credit, 1990 - June ‘12
-2%0%2%4%6%8%10%12%14%16%18%'90 '92 '94 '96 '98 '00 '02 '04 '06 '08 '10 '12