Weekly Economic Update

Quote of the week.“Do not go where the path may lead, go instead where there is no path and leave a trail.” – Ralph Waldo Emerson

Less spending, fewer orders. Consumer spending fell 1.0% in October, matching expectations of economists. The Commerce Department also had durable goods orders dropping by 6.2% - the harshest monthly decline in two years. The good news: incomes rose 0.3% in October, real income grew by 1%, and jobless claims were down by 14,000 last week from the preceding week.^1,2

Home sales drop. Still no relief for the housing sector. Residential resales, according to the National Association of Realtors, fell 3.1% from September levels in October. Nationally, the median resale price was 11.3% below a year ago.³ New home sales slowed by 5.3% in October, but the Commerce Department also reported that the inventory of unsold new homes shrank by 8.0%.⁴

Consumer confidence rises. For November, the Conference Board’s monthly survey registered 44.9, recovering from a post-1974 low of 38.8. Economists polled by Bloomberg News had predicted no rebound this month.⁵

The best 5 days since 1933? Statistics don’t lie: the trading days from 11/21 to 11/28 were some of the best in the history of the S&P 500 and the Dow. The S&P gained more than 19% and the Dow more than 17% across these five trading sessions. During last week’s short market week, the DJIA rose 9.87%, the S&P 500 12.03%, and the NASDAQ 10.92%.^6,7 However, yields on 10-year Treasuries dipped to 2.99% Wednesday – the first time yields went below 3% in the 46-year history of these notes.⁸

% Change	Y-T-D	1-Year	5-Yr Avg
DJIA	-33.36	-33.56	-1.95
NASDAQ	-42.10	-42.33	-4.33
S&P 500	-38.96	-38.99	-3.06

(Source: CNNMoney.com, 11/28/08)⁹

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Riddle of the week.Born motherless and fatherless, crossing the world on a wind, I make a loud roar as I enter, then go away again. What am I?

Last week’s riddle:The more there is of it, the less you see. What is it?

Answer: Darkness.

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These views are those of Peter Montoya Inc., and not the presenting Representative or the Representative’s Broker/Dealer, and should not be construed as investment advice. 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. 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. The 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 other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Citations.

¹ bloomberg.com/apps/news?pid=20601087&sid=arImKeG53bCI&refer=home[11/26/08]

^{2 money.cnn.com/2008/11/26/news/economy/personal_income_spending/postversion=2008112610[11/26/08]}

^{3 voices.washingtonpost.com/economy-watch/2008/11/october_existing_home_sales_dr.html?hpid=topnews[11/24/08]}

^{4 reuters.com/article/newsOne/idUSTRE4AP4XT20081126[11/26/08]}

^{5 bloomberg.com/apps/news?pid=20601087&sid=aoS5L54TQkmI&refer=home [11/25/08]}

⁶cnbc.com/id/27956413[11/28/08]

⁷foxbusiness.com/story/stocks-end-week-sharply-higher-month/ [10/28/08]

⁸money.cnn.com/2008/11/26/markets/bondcenter/bonds/?postversion=2008112617 [11/26/08]

⁹money.cnn.com/data/markets/dow/?[11/28/08]

^{9 money.cnn.com/data/markets/nasdaq/?[11/28/08]}

^{9 money.cnn.com/data/markets/sandp/?[11/28/08]}

^{9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F28%2F07&mode=add&symb=DJIA[11/28/08]}

^{9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F28%2F03&mode=add&symb=DJIA[11/28/08]}

^{9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F28%2F07&mode=add&symb=COMP[11/28/08]}

^{9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F28%2F03&mode=add&symb=COMP[11/28/08]}

^{9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F28%2F07&mode=add&symb=SPX[11/28/08]}

^{9 money.cnn.com/quote/historical/historical.html?pg=hi&close_date=11%2F28%2F03&mode=add&symb=SPX [11/28/08]}