Last Week's Headlines
- The German parliament voted overwhelmingly to increase its contribution to the European Financial Stability Facility and expand its bond-buying authority. Finland and Austria also agreed to expansion of the EFSF, which also requires approval by the other EU nations. Meanwhile, Greece adopted new property taxes in an attempt to balance its budget and qualify for its next round of bailout money.
- The final estimate of U.S. economic growth during the second quarter was 1.3%. That's slightly higher than the Bureau of Economic Analysis's previous 1% estimate, and an improvement from Q1's 0.4%. Nonresidential fixed investment, consumer spending, exports, and federal government spending were primarily responsible for the increase, though they were offset by reduced spending by state and local governments and by lower private inventory investments.
- Durable goods orders fell 0.1% in August, reversing July's 4.1% increase, according to the Department of Commerce. However, nondefense capital spending by businesses rose 1.1%, and shipments of capital goods were up 2.8%.
- Sales of new single-family homes fell 2.3% in August, the Commerce Department said, but were 6.1% higher than in August 2010. The number of homes sold was the lowest since February; the inventory of unsold homes on the market--more than 6 months' worth--was relatively unchanged. However, home prices were on the rise, up an average of 0.9% in July for the 20 cities measured by the S&P/Case-Shiller index. It was the fourth straight month of increases; however, prices were still 4.1% below July 2010.
- Personal incomes fell 0.1% in August, while spending rose 0.2%, according to the Bureau of Economic Analysis.
Eye on the Week Ahead
As the new quarter begins, the eurozone debt watch will focus on whether Greece has done enough to reduce its deficit in order to qualify for this month's bailout payment. Friday's unemployment data will also be of interest.
Key dates and data releases: U.S. manufacturing, construction spending (10/3); factory orders (10/4); U.S. services sector (10/5); weekly new jobless claims (10/6); unemployment/payrolls, wholesale trade, consumer credit (10/7).
Data source: Includes data provided by Brounes & Associates. All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. Equities data reflect price change, not total return.
The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indexes listed are unmanaged and are not available for direct investment.
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