Weekly Market Recap
August 13, 2012
• Chinese economic data was disappointing in July.• GOP presidential nominee Mitt Romney picked PaulRyan as his vice presidential choice.
• The trade deficit shrank more than expected in June.• Jobless claims fell to 361,000.• Next Week: Retail Sales, PPI, Industrial Production,Housing Starts, Consumer Sentiment.
Thought of the Week
The housing market may be showing signs of life, asinventories seem to have stabilized and prices havebegun to rise. However, this has occurred as other areasof the U.S. economy appear to be weakening, causingmany to question the sustainability of this recentimprovement. That being said, as shown in this week’schart, consumer demand for mortgages is increasing;the number of loan officers reporting stronger demandfor mortgages has exceeded those reporting weakerdemand for four consecutive quarters, which couldprovide support for the housing market going forward.Thus, despite mixed numbers on the U.S. economy,progress in housing and decent report on light vehiclesales for July suggest that the cyclical sectors areimproving, which should allow the economy to continuegrowing at a moderate pace.
Question of the week:
According to the JOLTS survey, the number of jobopenings hit a high for the recovery in June. When wasthe last time job openings were at their current level?
Prior week's question:
High yield bonds are currently yielding approximately6.8%; what was the highest yield seen over the pastyear?
Answer to prior week's question:
The highest yield seen over the past year was 10.15%,which occurred on October 4, 2011.
Please see important disclosure on next page.
10,72012,21813,09613,208Dow Jones 30
2.892.452.082.1310 Year Municipal
2.141.871.581.6510 Year Treasury
0.180.240.240.262 Year Treasury
0.250.250.250.25Fed Funds Target
7.308.851.951.72MSCI - EAFE
1 week YTD
4.374.073.753.7630 Year Mortgage
0.430.640.440.426 Month CD
76.5076.9478.6078.19¥ per $
1.611.551.561.57$ per £
1.421.301.231.23$ per €
114.811.6317.6515.15Russell 1000 Growth
90.792.5913.6711.68Russell 1000 Value
Wgt AvgMkt Cap(Bill)DividendYieldP/ETrailingP/EForwardIndexCharacteristics
S&P 500 Sector Returns
S & P 5 0 0 U t i l i t i e s C o n s u m e r S t a p l e s H e a l t h C a r e T e l e c o m F i n a n c i a l s C o n s u m e r D i s c r . I n d u s t r i a l s T e c h n o l o g y E n e r g y M a t e r i a l s 2 . 9 2 . 5 2 . 3 1 . 4 0 . 8 0 . 7 0 . 6 0 . 5 - 0 . 4 - 0 . 8 1 . 2
S & P 5 0 0 E n e r g y U t i l i t i e s M a t e r i a l s I n d u s t r i a l s C o n s u m e r S t a p l e s H e a l t h C a r e C o n s u m e r D i s c r . F i n a n c i a l s T e c h n o l o g y T e l e c o m 2 3 . 9 1 8 . 5 1 6 . 1 1 5 . 4 1 3 . 0 1 1 . 5 1 0 . 3 8 . 9 6 . 5 5 . 5 1 3 . 3
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
Stronger Mortgage Demand Could Be a Tailwind for Housing
Net % of respondents reporting stronger demand for prime mortgages
-80%-60%-40%-20%0%20%40%60%'07 '08 '09 '10 '11 '12