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WEEKLY QUOTE
“We
learn by example and by direct experience because there are real limits to
the adequacy of verbal instruction.”
-
Malcolm Gladwell
WEEKLY TIP
Do
you have a child heading off to college this fall? Financially, it may be
time for his or her first credit card. One idea: have your son or daughter
sign up for a basic, low-limit card through a credit union or independent
bank and have the monthly statements sent to you.
WEEKLY RIDDLE
What
are you able to keep after you give it to someone?
Last week’s riddle:
I often stand straight and tall. I can illuminate your wall or
hall. If you push me, I may fall. What am I?
Last week’s answer:
A candle.
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June 21,
2017
FED DELIVERS EXPECTED & UNEXPECTED NEWS
As Wall Street anticipated, the Federal Reserve raised
interest rates on June 14. The Federal Open Market Committee voted 8-1 to
take the benchmark interest rate north by a quarter-point to the 1.00-1.25%
range. The Fed also said it would begin to reduce its $4.5 trillion balance
sheet at some point “this year” by slowing reinvestments. As a start, it will
let $6 billion per month in Treasury holdings run off, along with $4 billion
per month in agency debt and mortgage-linked securities. This implies upward
pressure on long-term interest rates.1,2
RETAIL SALES, HEADLINE INFLATION BOTH RETREAT
The Consumer Price Index declined 0.1% in May, noted the
Bureau of Labor Statistics; core consumer inflation rose 0.1%. A bigger May
decline came for retail purchases – the Census Bureau said that they fell
0.3% even with car sales factored out.3
HOUSING STARTS SLIP
The Census Bureau’s new residential construction snapshot
showed groundbreaking at an 8-month low, with total housing starts down 5.5%
in May. Total building permits decelerated 4.9% last month to their slowest
pace since April 2016.4
GAUGE OF SENTIMENT DESCENDS
In its preliminary June edition, the University of
Michigan’s consumer sentiment index fell short of expectations. Economists,
polled by Briefing.com, forecast a reading of 97.0 for the index, but it came
in at 94.5.3
DOW 30 OUTPACES S&P 500
Rising 0.53% in five days, the Dow Jones Industrial
Average ended the week at 21,384.28. The S&P 500 made a weekly advance of
0.06% to a Friday close of 2,433.15. Tech shares kept selling off, resulting
in the Nasdaq Composite’s 0.90% weekly descent to a Friday settlement of
6,151.76. The Dow Jones Utility Average had the best week among consequential
U.S. equity indices, rising 1.75%.5
THIS WEEK:
Nothing major is scheduled for Monday. Tuesday, Adobe Systems, FedEx,
La-Z-Boy, Lennar, and Red Hat all present earnings. Wednesday offers May
existing home sales figures and earnings announcements from CarMax, Oracle,
and Winnebago. Earnings news from Accenture, Barnes & Noble, Bed Bath
& Beyond, Carnival, and Sonic arrives Thursday, plus new initial jobless
claims numbers. Friday, investors consider May new home sales and Q2 results
from Finish Line.
Sources: wsj.com, bigcharts.com, treasury.gov - 6/16/175,6,7,8
Indices are unmanaged, do not incur fees or expenses,
and cannot be invested into directly. These returns do not include dividends.
10-year TIPS real yield = projected return at maturity given expected
inflation.
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«RepresentativeDisclosure»
This material was prepared by
MarketingPro, Inc., and does not necessarily represent the views of the
presenting party, nor their affiliates. The information herein has been
derived from sources believed to be accurate. Please note - investing
involves risk, and past performance is no guarantee of future results.
Investments will fluctuate and when redeemed may be worth more or less than
when originally invested. 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. This is neither a solicitation nor
recommendation to purchase or sell any investment or insurance product or
service, and should not be relied upon as such. All market indices discussed
are unmanaged and are not illustrative of any particular investment. Indices
do not incur management fees, costs and expenses, and cannot be invested into
directly. All economic and performance data is historical and not indicative
of future results. The Dow Jones Industrial Average is a price-weighted index
of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a
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 a market-cap weighted index
composed of the common stocks of 500 leading companies in leading industries
of the U.S. economy. 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. MarketingPro, Inc. is not
affiliated with any person or firm that may be providing this information to
you. 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 -
marketwatch.com/story/fed-raises-interest-rates-to-reduce-balance-sheet-this-year-2017-06-14
[6/14/17]
2 -
businessinsider.com/federal-reserve-rate-hike-plan-to-unwind-45-trillion-balance-sheet-2017-6
[6/14/17]
3 - briefing.com/investor/calendars/economic/2017/06/12-16
[6/16/17]
4 - reuters.com/article/us-usa-economy-idUSKBN197277 [6/16/17]
5 - markets.wsj.com/us [6/16/17]
6 -
bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F16%2F16&x=0&y=0
[6/16/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F16%2F16&x=0&y=0
[6/16/17]
6 -
bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F16%2F16&x=0&y=0
[6/16/17]
6 -
bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F15%2F12&x=0&y=0
[6/16/17]
6 -
bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F15%2F12&x=0&y=0
[6/16/17]
6 -
bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F15%2F12&x=0&y=0
[6/16/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F15%2F07&x=0&y=0
[6/16/17]
6 -
bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F15%2F07&x=0&y=0
[6/16/17]
6 -
bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F15%2F07&x=0&y=0
[6/16/17]
7 -
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield
[6/16/17]
8 -
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll
[6/16/17]
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Wednesday, June 21, 2017
Economic Update for the week of June 21, 2017
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