Tuesday, June 28, 2016

Economic Update for the week of June 28th, 2016

WEEKLY ECONOMIC UPDATE

WEEKLY QUOTE
             
“Next to trying and winning, the best thing is trying and failing.”
    
- L.M. Montgomery
     
   
WEEKLY TIP
             
Will you soon be using a credit card outside the U.S.? Call the card issuer before your trip, and let your bank know the exact countries and territories you will be visiting. Otherwise, you may run the risk of having your card suspended on suspicion of fraud. 
    
   
WEEKLY RIDDLE
            
When is L greater than XL?
  

Last week’s riddle:
What goes with you wherever you go, often demands an answer, and never asks you a question?
     
Last week’s answer:
Your cell phone.




June 28, 2016
  
BREXIT VOTE BATTERS GLOBAL MARKETS
The world reacted to the news Thursday night that U.K. voters had decided to leave the European Union. Germany’s DAX, France’s CAC-40, and Japan’s Nikkei 225 respectively ended their Friday trading sessions with losses of 6.82%, 8.04%, and 7.92%. Wall Street was not hit as hard, but the Dow fell 3.39% Friday, while the Nasdaq declined 4.12% and the S&P 500 retreated 3.60%.1,2
 
A GAIN FOR EXISTING HOME SALES IN MAY
Last month, the pace of residential resales accelerated another 1.8%. According to the National Association of Realtors, the latest annual rate of 5.53 million sales marked a 9-year high. Separately, a Census Bureau report showed a 6.0% drop in new home buying in May.3
  
CONSUMER SENTIMENT GAUGE DECLINES IN JUNE
Displaying a final June reading of 93.5, the University of Michigan’s monthly consumer sentiment index finished the sixth month of the year 1.2 points below its final May mark. A year ago, the index was at 96.1.4
 
STOCKS END ROCKY TRADING WEEK LOWER
Even with global markets plunging on Friday, weekly losses for the major U.S. indices were not extreme. The Nasdaq declined 1.92% across five days, while the Dow and S&P 500 respectively retreated 1.56% and 1.64%. As the dust settled Friday, the Dow closed the week at 17,399.86; the S&P, at 2,037.30; and the Nasdaq, at 4,707.98. Gold jumped $59.30 Friday to a COMEX close of $1,322.40. Oil settled at $47.64 Friday on the NYMEX.2,5
   
THIS WEEK: Global markets will react further to the Brexit on Monday; stateside, no major news releases are scheduled. Tuesday, an E.U. leadership summit begins in Brussels; the Conference Board presents its June consumer confidence index; the April Case-Shiller home price index appears; the BEA issues its final estimate of Q1 GDP; and Nike reports quarterly results. Wednesday, Federal Reserve chair Janet Yellen, European Central Bank president Mario Draghi, and Bank of England governor Mark Carney take part in a panel discussion at an ECB forum in Portugal; Wall Street will also pay attention to May pending home sales, May personal spending figures, and earnings news from General Mills, Monsanto, and Pier 1. Thursday, a new initial claims report complements earnings from ConAgra Foods, Constellation Brands, Darden Restaurants, and Paychex. Friday, investors consider ISM’s June U.S. manufacturing PMI and China’s latest factory PMI reading.
 
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-0.14
-3.15
+9.16
+5.83
NASDAQ
-5.98
-8.09
+15.49
+12.19
S&P 500
-0.32
-3.38
+12.12
+6.37
REAL YIELD
6/24 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.15%
0.48%
0.64%
2.64%
 

Sources: wsj.com, bigcharts.com, treasury.gov - 6/24/162,6,7,8
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. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. 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. 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 indices are unmanaged and are not illustrative of any particular investment. 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. 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. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. 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 assistance is needed, the reader is advised to engage the services of a competent professional.
 
Citations.
1 - markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [6/24/16]
2 - markets.wsj.com/us [6/24/16]
3 - investors.com/news/economy/new-home-sales-fall-6-jobless-claims-near-43-year-low/ [6/23/16]
4 - investing.com/economic-calendar/michigan-consumer-sentiment-320 [6/24/16]
5 - cnbc.com/2016/06/24/us-markets.html [6/24/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]               
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/24/16]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/24/16]

Tuesday, June 21, 2016

Economic update for the week of June 21st, 2016

WEEKLY ECONOMIC UPDATE

WEEKLY QUOTE
             
“What we anticipate seldom occurs; what we least expected generally happens.”
    
- Benjamin Disraeli
     
   
WEEKLY TIP
             
When you own a small business, paying estimated taxes is a given. If you are a new business owner, think about creating a dedicated bank account to which you can direct a monthly amount for that purpose. 
    
   
WEEKLY RIDDLE
            
What goes with you wherever you go, often demands an answer, and never asks you a question?
  

Last week’s riddle:
At the sound of it, you may dream, dance, laugh, weep or even stamp your feet. What is it?
     
Last week’s answer:
Music.




June 21, 2016
  
RETAIL SALES RISE another HALF-PERCENT
This healthy May increase follows the 1.3% gain recorded by the Department of Commerce for April, and offers more evidence that the economy has rebounded from a sluggish first quarter. Core retail sales (minus auto and gasoline purchases) were up 0.4% last month.1
INFLATION CONTINUES TO FIRM
According to the Bureau of Labor Statistics, consumer prices rose 0.2% in May while producer prices advanced 0.4%. While a drop in food prices tempered the gain in the Consumer Price Index, the core CPI (which strips out energy and food costs) was up 2.2% in a year, exceeding the Federal Reserve’s annualized inflation target. The May wholesale inflation jump still left the Producer Price Index up just 0.8% year-over-year; plunging energy costs have held the PPI in check.1,2
  
CONSTRUCTION ACTIVITY MODERATES IN MAY
Building permits and housing starts both increased 4.9% in April, but Census Bureau data reveals no such leaps last month. Groundbreaking declined 0.3% in May, while the issuance of permits increased by 0.7%.1
 
INVESTORS ANXIOUSLY AWAIT U.K. VOTE
As expected, the Federal Reserve refrained from an interest rate move last week; Wall Street was more concerned about the potential of a Brexit. The S&P 500 fell 1.19% in five days to 2,071.22, and the other major indices fell with it. The Nasdaq gave back 1.92% on its way to a Friday close of 4,800.34, while the Dow slipped 1.07% on the week to 17,675.16. Gold is on a 3-week winning streak: it settled at $1,294.80 on the COMEX Friday, rising 1.5% in five days. WTI crude fell 2.2% for the week, closing Friday at $47.98 on the NYMEX.3
   
THIS WEEK: Nothing major is scheduled for Monday. Tuesday, Federal Reserve chair Janet Yellen begins two days of testimony in the Senate on monetary policy; earnings news emerges from Adobe Systems, CarMax, Carnival, FedEx, KB Home, La-Z-Boy, and Lennar. Wednesday, Wall Street looks at May existing home sales numbers and earnings from Barnes & Noble, Bed Bath & Beyond, Red Hat, and Winnebago. On Thursday, the United Kingdom holds its referendum on whether or not to stay in the European Union; investors will also consider May new home sales figures, the federal government’s latest initial jobless claims report, and quarterly results from Sonic. Friday offers the final June University of Michigan consumer sentiment index, a Census Bureau report on May hard goods orders and earnings from Finish Line.
 
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+1.44
-1.45
+9.45
+6.05
NASDAQ
-4.14
-5.22
+16.69
+12.54
S&P 500
+1.33
-1.39
+12.58
+6.55
REAL YIELD
6/17 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.20%
0.42%
0.75%
2.54%
 

Sources: wsj.com, bigcharts.com, treasury.gov - 6/17/164,5,6,7
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.


Please feel free to forward this article to family, friends or colleagues.
If you would like us to add them to our distribution list, please reply with their address.
We will contact them first and request their permission to add them to our list.


«RepresentativeDisclosure»
 
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. 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. 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 indices are unmanaged and are not illustrative of any particular investment. 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. 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. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. 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 assistance is needed, the reader is advised to engage the services of a competent professional.
 
Citations.
1 - investing.com/economic-calendar/ [6/17/16]
2 - usnews.com/news/articles/2016-06-16/fed-unlikely-to-be-wowed-by-modest-inflation-uptick [6/16/16]
3 - cnbc.com/2016/06/17/us-markets.html [6/17/16]
4 - markets.wsj.com/us [6/17/16]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F17%2F15&x=0&y=0 [6/17/16]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F17%2F15&x=0&y=0 [6/17/16]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F17%2F15&x=0&y=0 [6/17/16]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F17%2F11&x=0&y=0 [6/17/16]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F17%2F11&x=0&y=0 [6/17/16]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F17%2F11&x=0&y=0 [6/17/16]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F16%2F06&x=0&y=0 [6/17/16]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F16%2F06&x=0&y=0 [6/17/16]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F16%2F06&x=0&y=0 [6/17/16]               
6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/17/16]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/17/16]

Tuesday, June 14, 2016

Economic Update for the week of June 14th, 2016

WEEKLY ECONOMIC UPDATE

WEEKLY QUOTE
             
“Early to bed and early to rise makes a man healthy, wealthy, and wise.”
    
- Ben Franklin
     
   
WEEKLY TIP
             
Millennials should not fall for the myth that you need to carry a lot of consumer debt to build a good credit score. A positive payment history can be established while carrying relatively little debt.  
    
   
WEEKLY RIDDLE
            
At the sound of it, you may dream, dance, laugh, weep, or even stamp your feet. What is it?
  

Last week’s riddle:
Three feet have I, yet not a single leg. What am I?
     
Last week’s answer:
A yardstick.




June 14, 2016
  
A LITTLE LESS OPTIMISM IN EARLY JUNE
On Friday, the University of Michigan’s initial June survey of consumer sentiment showed a slight retreat, with the index coming in at 94.3 versus its final May mark of 94.7. The survey’s chief economist, Richard Curtin, noted “consumers rated their current financial situation at the best levels since the 2007 cyclical peak largely due to wage gains” and also had “record low inflation expectations.” On the downside, consumers felt the economy was stronger a year ago.1
YELLEN OFFERS NO HINT OF SPRING RATE HIKE
Speaking in Philadelphia last week, Federal Reserve chair Janet Yellen said she felt “the current stance of monetary policy is generally appropriate,” adding “at the same time, I continue to think that the federal funds rate will probably need to rise gradually over time to ensure price stability and maximum sustainable employment in the longer run.” Investors interpreted her comments as a sign that the possibility of a June interest rate increase was very remote.2
  
BORROWING BECOMES CHEAPER FOR HOMEOWNERS
The average interest rate on a conventional home loan fell to 3.60% in Freddie Mac’s June 9 Primary Mortgage Market Survey. A week earlier, the average interest rate for a 30-year FRM was at 3.66%; a year ago, it was at 4.04%.3
 
BREXIT FEARS REIN IN BULLS
Concerns about the United Kingdom leaving the European Union sent bond yields falling worldwide late last week and hampered stocks, ending a 4-week win streak for the S&P 500. The 5-day performances: DJIA, +0.33% to 17,865.34; S&P, -0.15% to 2,096.07; NASDAQ, -0.97% to 4,894.55. Oil settled at $49.07 on the NYMEX Friday; gold, at a 3-week high of $1,275.90 on the COMEX.4,5
   
THIS WEEK: Nothing major is scheduled on Monday. May retail sales figures arrive Tuesday, plus Q1 results from Bob Evans. Wednesday, the Fed concludes a policy meeting (with a press conference to follow); the May Producer Price Index is released; and Jabil Circuit and Progressive present earnings. Thursday, the May Consumer Price Index appears, along with a new initial claims report and earnings from Kroger, Oracle, Red Hat, and Rite Aid. The Census Bureau releases its report on May groundbreaking and building permits on Friday.
 
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+2.53
-0.75
+9.90
+6.40
NASDAQ
-2.25
-3.59
+17.03
+12.92
S&P 500
+2.55
-0.43
+12.98
+6.74
REAL YIELD
6/10 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.12%
0.63%
0.79%
2.45%
 

Sources: wsj.com, bigcharts.com, treasury.gov - 6/10/165,6,7,8
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.


Please feel free to forward this article to family, friends or colleagues.
If you would like us to add them to our distribution list, please reply with their address.
We will contact them first and request their permission to add them to our list.


«RepresentativeDisclosure»
 
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. 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. 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 indices are unmanaged and are not illustrative of any particular investment. 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. 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. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. 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 assistance is needed, the reader is advised to engage the services of a competent professional.
 
Citations.
1 - sca.isr.umich.edu/ [6/10/16]
2 - cnbc.com/2016/06/07/european-stocks-shell-yellen-oil-prices.html [6/7/16]
3 - forbes.com/sites/redfin/2016/06/09/mortgage-rates-down-for-first-time-in-four-weeks/ [6/9/16]
4 - marketwatch.com/story/us-stock-futures-slammed-by-jitters-over-fed-and-brexit-2016-06-10 [6/10/16]
5 - markets.wsj.com/us [6/10/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F10%2F15&x=0&y=0 [6/10/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F10%2F15&x=0&y=0 [6/10/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F10%2F15&x=0&y=0 [6/10/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F10%2F11&x=0&y=0 [6/10/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F10%2F11&x=0&y=0 [6/10/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F10%2F11&x=0&y=0 [6/10/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F9%2F06&x=0&y=0 [6/10/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F9%2F06&x=0&y=0 [6/10/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F9%2F06&x=0&y=0 [6/10/16]               
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/10/16]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/10/16]