In this week’s recap: retail sales impress
again, groundbreaking suddenly tails off, stocks tread water, and more tariffs
might be in store for China.
Weekly Economic Update
Presented by Troy L. Thompson, July 26, 2018
ANOTHER
GOOD MONTH FOR RETAIL SALES
Americans are spending freely, as new Census
Bureau data confirms. Retail sales advanced 0.5% last month, matching the
consensus forecast of economists surveyed by Reuters, in the wake of a revised
1.3% May gain. (May was the best month for buying since last September.) The
only negative note: core retail sales were flat in June. (Core sales exclude
food, fuel, auto, and home improvement purchases.)1
HOUSING
STARTS SINK TO A 9-MONTH LOW
Taking their biggest monthly fall since
November 2016, starts unexpectedly dropped 12.3% in June. New Census Bureau
data showed building permits declining 2.2% in June as well. In May,
groundbreaking reached an 11-year peak.2
ARE
MORE TARIFFS COMING ON CHINESE GOODS?
The possibility has just been raised. During
a CNBC Squawk Box interview Friday,
President Trump noted that perhaps all Chinese imports should face U.S.
tariffs, explaining that he was “ready to go to 500” – a reference to the $505.5
billion total in Chinese products that came to America in 2017. The U.S.
exported $129.9 billion of goods to China last year.3
A
FLAT WEEK ON WALL STREET
While earnings and headlines certainly
impacted market sectors, the major indices were little changed from where they
began the week at Friday’s closing bell. Up 0.15% across five trading days, the
Dow Jones Industrial Average concluded the week at 25,058.12. Moving north but
0.02% last week, the S&P 500 reached 2,801.83. Losing 0.07% on the week, the
Nasdaq Composite settled at 7,820.20, Friday.4
T I P O F
T H E W E E K
Are you a self-employed professional or a small business owner? You should seriously consider disability insurance. As your salary may be your household’s main (or only) source of income, an extended interruption in your earnings could disrupt your lifestyle and prove financially disastrous.
THIS WEEK
Monday, earnings announcements
emerge from Alphabet, Halliburton, Hasbro, Kaiser Aluminum, Lennox
International, Netgear, TD Ameritrade, Whirlpool, and Zions Bancorp; Wall
Street also looks at June existing home sales. | 3M, Ameriprise Financial,
AT&T, Avery Dennison, Biogen, Chubb, Eli Lilly, Harley-Davidson, JetBlue,
Kimberly-Clark, Lockheed Martin, Peabody Energy, Quest Diagnostics, Smith
Micro, Stryker, Texas Instruments, TransUnion, UBS Group, and Verizon present
earnings, Tuesday. | On Wednesday, the earnings roster includes Anthem, Boeing,
Citrix, Coca-Cola, Corning, Dolby Labs, Equifax, Extended Stay Hotels,
Facebook, Fiat Chrysler, Ford Motor Co., Freeport-McMoRan, General Motors,
General Dynamics, Gilead Sciences, GlaxoSmithKline, GrubHub, Hilton Worldwide
Holdings, Ingersoll-Rand, Mattel, Mondelez, NextEra Energy, Norfolk Southern,
Northrop Grumman, O’Reilly, Owens Corning, PayPal, Qualcomm, Raymond James,
Rockwell Automation, Ryder Systems, Sempra Energy, Sirius XM, Six Flags
Entertainment, Smart & Final, T. Rowe Price, Trivago, Universal Health
Services, UPS, Visa, and Waste Management; in other news, a June new home sales
report appears. | Data on June hard goods orders and initial jobless claims
surfaces Thursday, along with earnings news from Aflac, Alaska Air, Allergan
PLC, Ally Financial, Altria Group, Amazon.com, American Airlines, Amgen,
Anheuser-Busch, Beazer Homes, Bristol-Myers, Celgene, Chipotle, CME Group,
Comcast, Conoco-Phillips, D.R. Horton, Daimler AG, Del Taco, Discover, Dunkin’
Brands, Edison International, Electronic Arts, Expedia, GNC, Hershey, Intel,
International Paper, Live Nation, Marathon Petroleum, Mastercard, McDonalds,
NCR, Nokia, Penske, Praxair, Pulte Group, Raytheon, Royal Dutch Shell, SkyWest,
Spirit Airlines, Spotify, Starbucks, SuperValu, The Hartford, Under Armour,
Valero Energy, Verisign, Western Digital, W.R. Grace, and Xerox. | On Friday, the
first estimate of Q2 GDP arrives, plus the final July University of Michigan
consumer sentiment index and earnings from Chevron, Colgate-Palmolive, Exxon
Mobil, Merck, Phillips 66, Twitter, and Weyerhaeuser.
Q U O T E O F T H E W E E K
"It is wise to remember that you are one of those who can be fooled some
of the time."
LAURENCE
J. PETER
|
% CHANGE
|
Y-T-D
|
1-YR CHG
|
5-YR AVG
|
10-YR AVG
|
|
DJIA
|
1.37
|
15.95
|
12.24
|
11.85
|
|
NASDAQ
|
13.28
|
22.38
|
23.60
|
24.31
|
|
S&P 500
|
4.80
|
13.28
|
13.12
|
12.24
|
|
REAL YIELD
|
7/20 RATE
|
1 YR AGO
|
5 YRS AGO
|
10 YRS AGO
|
|
10
YR TIPS
|
0.78
|
0.50
|
0.28
|
1.80
|
Sources: wsj.com, bigcharts.com, treasury.gov - 7/20/185,6,7,8
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.
T H E W E E K L Y
R I D D L E
LAST
WEEK’S RIDDLE: How many times can you subtract 100 from 1,000?
ANSWER:
Just once, because after that, you will be subtracting 100 from 900, 800, and
so on.
Troy L
Thompson CFP may be reached at 515-432-542 or troy@thompsonfinancialinc.com www.thompsonfinancialinc.com
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CITATIONS:
1 - cnbc.com/2018/07/16/us-retail-sales-june-2018.html
[7/16/18]
2 - tradingeconomics.com/united-states/housing-starts
[7/18/18]
3 - cnbc.com/2018/07/19/trump-says-hes-ready-to-put-tariffs-on-all-505-billion-of-chinese-.html
[7/19/18]
4 -
markets.wsj.com/us [7/20/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F20%2F17&x=0&y=0
[7/20/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F20%2F17&x=0&y=0
[7/20/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F20%2F17&x=0&y=0
[7/20/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F19%2F13&x=0&y=0
[7/20/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F19%2F13&x=0&y=0
[7/20/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F19%2F13&x=0&y=0
[7/20/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F21%2F08&x=0&y=0
[7/20/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F21%2F08&x=0&y=0
[7/20/18]
5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F21%2F08&x=0&y=0
[7/20/18]
6 -
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield
[7/20/18]
7 -
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll
[7/20/18]
