A SOLID EARNINGS SEASON
By Friday, nearly 70%of the firms in the S&P 500 had announced quarterly results – and so far, so good. Thomson Reuters data shows that 66% of these companies have beaten revenue projections, and nearly 70% have surpassed earnings forecasts compared to 65% over the previous four quarters. As it stands now, if the rest of the S&P’s components report quarterly results in line with estimates, Q4 earnings for S&P 500 companies will grow 5.2%. Thomson Reuters had projected a 1.9% rise.1,2
ISM SERVICES REPORT SHOWS SUSTAINED GROWTH
The U.S. service sector expanded at a marginally slower pace in January, according to the Institute for Supply Management’s non-manufacturing index. The January reading of 55.2 wasn’t much removed from the December reading of 55.7, and indicated steadiness in non-manufacturing activity.3
OBAMA ASKS CONGRESS TO POSTPONE BUDGET CUTS
Last week, the President asked Capitol Hill lawmakers to “pass a smaller package of spending cuts and tax reforms that would delay the economically damaging effects of the sequester for a few more months.” Some analysts think Democrats will push to end tax breaks for energy firms in an effort to generate more revenue and stave off deeper cuts planned for March 1. Senate Minority Leader Mitch McConnell (R-KY) commented that “raising taxes on private jets or energy companies” amounted to “gimmicks” in lieu of “real solutions” to reducing the deficit.4
NASDAQ SETTLES AT 12-YEAR PEAK
The tech-heavy index closed at 3,193.87 Friday, up 0.46% across five trading days. The S&P 500 gained 0.31% last week, settling Friday at 1,517.93. Yet the week was mixed, with the Dow pulling back 0.12% to close at 13,992.97 Friday. On the COMEX, oil ended the week at $96.40, gold at $1,668.80. Gas prices averaged $3.57 a gallon on Friday in AAA’s survey; that was nearly a four-month peak.2,5,6
THIS WEEK: Monday brings earnings from Lionsgate, and Tuesday brings quarterly results from Barclay’s, Buffalo Wild Wings, McGraw-Hill, Coca-Cola, Avon Products, Michael Kors and Clearwire. The Commerce Department presents reports on January retail sales and December business inventories Wednesday, and earnings reports are in from MetLife, Cisco, Comcast, Deere, Dean Foods and Applied Materials. Quarterly results from CBS, General Motors, PepsiCo and Rio Tinto arrive Thursday, plus the latest initial jobless claims figures. February’s initial University of Michigan consumer sentiment survey comes out Friday, along with data on January industrial production and earnings from Campbell Soup.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +6.78 +8.61 +2.97 +7.79
NASDAQ +5.77 +9.53 +7.71 +14.90
S&P 500 +6.43 +12.44 +2.80 +8.30
REAL YIELD 2/8 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.57% -0.21% 1.36% 2.34%
Sources: cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 2/8/122,7,8,9 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.
WEEKLY QUOTE
“Your life does not get better by chance, it gets better by change.”
– Jim Rohn
WEEKLY TIP
New parents should check to see if they qualify for child tax credits and other family tax benefits for tax years 2012 and 2013.
WEEKLY RIDDLE
Two men played five games of chess in the park. They both won the same number of games, yet none of the games they played ended in a draw. So how could this be?
Last week’s riddle:
What five-letter word becomes shorter when you add two letters to it?
Last week’s answer:
Short.
Citations.
1 – www.reuters.com/article/2013/02/08/markets-usa-stocks-idUSL1N0B87T820130208 [2/8/13]
2 – www.cnbc.com/id/100446078 [2/8/13]
3 – www.nytimes.com/2013/02/06/business/economy/ism-reports-slower-growth-at-services-companies.html [2/6/13]
4 – www.latimes.com/news/politics/la-pn-obama-sequester-cuts-congress-20130205,0,885371.story [2/5/13]
5 – www.bloomberg.com/news/2013-02-08/heating-oil-climbs-as-natural-gas-advances-commodities-at-close.html [2/8/13]
6 – montoyaregistry.com/Financial-Market.aspx?financial-market=retirement-investment-funds&category=3 [2/8/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F8%2F12&x=0&y=0 [2/8/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F8%2F12&x=0&y=0 [2/8/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F8%2F12&x=0&y=0 [2/8/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F8%2F08&x=0&y=0 [2/8/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F8%2F08&x=0&y=0 [2/8/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F8%2F08&x=0&y=0 [2/8/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F7%2F03&x=0&y=0 [2/8/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F7%2F03&x=0&y=0 [2/8/13]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F7%2F03&x=0&y=0 [2/8/13]
8 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldYear&year=2013 [2/8/13]
8 – www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/8/13]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2003/ofm010803.pdf [1/8/03]
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. 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. 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. 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. This material was prepared by MarketingLibrary.Net Inc., for Stonecreek Wealth Advisors, Inc. an independent fee-only Registered Investment Adviser. Salt Lake City, Provo, Utah. Mark Lund is a Wealth Manager Advisor, Investor Coach and author of The Effective Investor.
