4th Generation Financial Presents:
WEEKLY ECONOMIC UPDATE
September 9, 2013
WEEKLY QUOTE
“In times like these, it
helps to recall that
there have always
been times like
these.”
- Paul Harvey
WEEKLY TIP
If you know a couple
about to marry,
consider giving them
a non-traditional gift:
a visit with a financial
consultant. It could
turn out to be a key
step in helping them
build wealth.
WEEKLY RIDDLE
Brian bets Denise
that he can find
something made out
of wood in his
workshop that can’t
be sawed. Brian wins
the bet; what is this
common substance?
Last week’s riddle:
Anna, a supermarket
clerk, has not slept
during any of the past
six nights, and yet she is
not tired. How can this
be?
Last week’s answer:
Anna sleeps during the
daytime.
BENEATH THE SURFACE, A DISQUIETING JOBS REPORT
In August, the U.S. unemployment rate declined to 7.3% with the economy adding
169,000 jobs. Not bad, but details in the Labor Department’s latest report also
raised caution flags: the jobless rate fell only because more people gave up the hunt
for work, as the labor force participation rate of 63.2% was the poorest in 35 years.
June and July hiring was revised downward, with just 104,000 new jobs in July (the
weakest hiring in 13 months) and just 148,000 per month from June through
August, compared to 184,000 per month in the preceding 12 months. Will the
Federal Reserve postpone tapering after jobs data like this?1
FURTHER FACTORY & SERVICE SECTOR GROWTH
Both of the Institute for Supply Management’s August purchasing manager indexes
showed robust sector expansion. The August non-manufacturing PMI surged 2.6%
to 58.6; analysts polled by MarketWatch forecast it to dip 1.0% to 55.0. As for the
Institute’s factory-sector PMI, it rose another 0.3% in August to 55.7.2
NEW BEIGE BOOK: LARGELY “MODERATE” EXPANSION
In its latest anecdotal survey of economic conditions, that very adjective was used to
characterize growth in three-quarters of Federal Reserve districts. In the big picture,
the Beige Book noted solid auto and home buying that fostered an increase in
consumer spending, but also “weakened” lending.3
AT LAST, A WINNING WEEK
The Dow snapped a 4-week losing streak by advancing 0.76% during September 3-6.
It settled Friday at 14,922.50, and its weekly gain was bettered by both the NASDAQ
(+1.95% to 3,660.01) and the S&P 500 (+1.36% to 1,655.17). In after-hours trading
Friday, the yield on the 10-year Treasury topped 3% for the first time since 2011.4
THIS WEEK: On Monday, Congress returns from its summer recess to consider a
strike on Syria; Hovnanian and Pep Boys present Q2 results. Apple holds a “special
event” Tuesday, likely unveiling new products. Men’s Wearhouse announces Q2
results on Wednesday, and the Census Bureau presents data on July wholesale
inventories. Besides a new report on initial jobless claims, Thursday also offers
earnings from Lululemon, Ulta Salon and Kroger. Friday brings a wave of data from
Washington – the August Producer Price Index, August retail sales numbers and
July business inventories – and the preliminary September consumer sentiment
index from the University of Michigan.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+13.88
+12.27
+6.60
+5.70
NASDAQ
+21.21
+16.72
+12.45
+9.70
S&P 500
+16.06
+15.57
+6.65
+6.21
REAL YIELD
9/6 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.87%
-0.63%
1.71%
2.17%
4,5,6,7
Sources: cnbc.com, bigcharts.com, treasury.gov - 9/6/13
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
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Registered representative, securities offered through Cambridge Investment Research, Inc., broker-dealer, member FINRA/SIPC.
Investment advisor representative, Cambridge Investment Research Advisors, Inc., a registered investment advisor. Cambridge and 4th
Generation Financial are not affiliated.
4th Generation Financial | 1115 N. Kentucky Avenue | Winter Park, FL 32789
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This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any
Federal tax penalty. 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. This material represents an assessment of the market environment at a specific point in time and is not intended
to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will
fluctuate and when redeemed may be worth more or less than when originally invested. 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.
Citations.
1 - latimes.com/business/money/la-fi-mo-jobs-federal-reserve-stimulus-unemployment-economy-20130906,0,5880212.story [9/6/13]
2 - marketwatch.com/economy-politics/calendars/economic [9/6/13]
3 - forbes.com/sites/steveschaefer/2013/09/04/feds-beige-book-housing-autos-pace-growth-but-lending-weakens/ [9/4/13]
4 - tinyurl.com/lp244bl [9/6/13]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F6%2F12&x=0&y=0 [9/6/13]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F6%2F12&x=0&y=0 [9/6/13]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F6%2F12&x=0&y=0 [9/6/13]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F5%2F08&x=0&y=0 [9/6/13]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F5%2F08&x=0&y=0 [9/6/13]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F5%2F08&x=0&y=0 [9/6/13]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F5%2F03&x=0&y=0 [9/6/13]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F5%2F03&x=0&y=0 [9/6/13]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F5%2F03&x=0&y=0 [9/6/13]
6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/6/13]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/6/13]