Advisors on This Week’s Show

Brian Kilb

Marc Amateis

Kyle Tetting

Week in Review (July 8-12, 2012)

Significant economic indicators & reports

Monday

Consumers surprised analysts by using credit cards more than expected in May. Revolving credit card debt rose the most in a year, suggesting more confidence from consumers, whose spending accounts for 70% of gross domestic product. The Federal Reserve’s consumer credit report also showed a continued rise in non-revolving debt, led by car financing and student loans.

Tuesday

No significant reports released

Wednesday

The Commerce Department said wholesale inventories dropped in May for the second month in a row, the biggest dip since September 2011, suggesting demand for goods is outpacing supply. Sales rose 1.6% in May, resulting in the lowest inventories-to-sales ratio in more than a year. That could mean companies will have to increase production and maybe even hire more workers.

Thursday

The moving four-week average for initial unemployment claims rose for the first time in three weeks, though it remained below the long-term average and continued to hover at a level considered healthy for adding jobs. Analysts underestimated the number of weekly claims reported by the Department of Labor but also noted the latest week included unusual factors, including a holiday-shortened work week and scheduled downtime for some automotive plants.

Friday

Another indicator of the global economy is demand for commodities, which can affect prices at the wholesale level. One measure of that is the Producer Price Index, which rose slightly more in June than expected, led by higher energy costs. Factoring out the volatile fuel and food costs, though, the year-to-year wholesale inflation rate remained at 1.7% for the fourth month in a row, suggesting economic growth remains subdued and perhaps still in need of Fed stimulus.

An early reading of July’s consumer sentiment index, from the University of Michigan and Thomson Reuters, hinted at worsening concerns for inflation, which slightly weakened consumers’ outlooks for coming months. The index declined from June after falling from May, which was the highest level for the index in nearly six years. Consumer sentiment tends to be a somewhat fickle predictor of consumer spending.

Where the Markets Closed for the Week

• Nasdaq – 3,600, up 121 points or 3.5%
• Standard & Poor’s 500 – 1,680, up 48 points or 2.9%
• 10-year U.S. Treasury Note – 2.60%, down 0.14 point
• Dow Jones Industrial – 15,464, up 328  points or 2.2%

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