Tuesday, August 4, 2009

Quick Notes for the Day - August 4

Pending Home Sales Rise in June - Boosted by low interest rates, prices, and a tax credit, pending sales of existing homes rose in June for the fifth straight month. The current streak is the longest since 2003 according to the National Association of Realtors. The pending home sales index rose 3.6% in June after an upwardly revised gain of 0.8% in May, and year over year the index is up 6.7%. More importantly, pending homes sales in June rose in ALL regions. *** Note - Pending Home Sales are home for which there is a contract but it has not yet closed. According to the NAR, these contracts usually close within 6 weeks.

Consumer Spending Rises in June, Personal Income, Savings Fall Slightly - Consumer spending rose more than expected in June according to a Commerce Department report. The report said spending rose 0.4% (versus a 0.3% estimate) boosted by expenditures on nondurable goods after a revised 0.1% increase in May.

Also included in the report was the personal income information. Personal income declined 1.3% in June, but this was easily explainable due to the effects of the stimulus checks wearing off in May.

Spending on nondurable goods rose 1.7% in June after a 0.1% rise in May. Spending on services also was up slightly, but consumption of durable goods, like appliances and cars, fell 0.2%.

Savings fell to an annual rate of $505 billion, with the saving rate slipping to 4.6% versus 6.2 percent in May. A measure of inflation closely watched by the Federal Reserve, the year-on-year personal consumption expenditures index excluding food and energy rose 1.5% after a 1.6% increase in May.

PepsiCo to Buy Bottlers - PepsiCo said Tuesday that it has reached a deal to buy Pepsi Bottling Group for $36.50 a share and PepsiAmericas for $28.50 a share. PepsiCo said that the total value of the shares that it will be acquiring is about $7.8 billion. The companies said they expect the deals to close in late 2009 or early 2010. In April, PepsiCo had offered $29.50 in cash and stock for each share of Pepsi Bottling Group and made a separate offer for PepsiAmericas at $23.27.

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