DOW TOPS 17,000 AFTER TERRIFIC JOBS REPORT
America’s jobless rate is fast approaching the Federal Reserve’s 6% target. Thanks to employers adding 288,000 new hires, unemployment dropped 0.2% to 6.1% in June. The U-6 rate (unemployed + underemployed) declined to 12.1%, a low unseen since October 2008; from June 2013 to June 2014, the number of Americans out of work for more than six months shrank by 1.2 million. The news helped inspire a rally: at the closing bell Friday, the Dow settled at a new all-time high of 17,068.26.1,2
ISM INDICES SINK SLIGHTLY
The Institute for Supply Management’s latest factory sector and service sector PMIs didn’t quite meet expectations, but they were still well above 50 (the demarcation between sector growth and contraction). ISM’s manufacturing PMI came in at 55.3 for June, ticking down 0.1 points from May; its non-manufacturing PMI had a June reading of 56.0 compared to May’s 56.3 mark. Economists polled by MarketWatch had forecast June’s ISM factory PMI to hit 55.7 and expected no change in its service sector PMI. Factory orders also decreased in May, as the Federal Reserve reported an 0.5% retreat following the 0.8% rise in April.3
PENDING HOME SALES JUMP 6.1%
The May gain was the greatest monthly improvement noted by the National Association of Realtors since April 2010 (when the first-time buyer tax credit was set to expire). Analysts polled by Bloomberg believed May would bring a gain of 1.5%.4
NEW QUARTER, NEW GAINS
With a 2.00% rise across four trading days to 4,485.92, the Nasdaq set the pace for the big three U.S. indices last week. The Dow gained 1.28% on its way to Friday’s record close, and the S&P 500 added 1.25% during the week to settle at 1,985.44 on July 3.5
THIS WEEK: No economic reports or earnings releases are scheduled for Monday, but results from Alcoa and The Container Store kick off the Q2 earnings season on Tuesday. Minutes from the June Fed policy meeting arrive Wednesday. Thursday, earnings from Progressive and Family Dollar complement the latest initial claims numbers and the Census Bureau’s report on May wholesale inventories. Friday brings Q2 results from Fastenal and Wells Fargo.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +2.97 +13.88 +21.22 +6.60
NASDAQ +7.41 +30.27 +29.94 +12.36
S&P 500 +7.42 +22.91 +24.30 +7.64
REAL YIELD 7/3 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.37% 0.48% 1.87% 1.96%
Sources: USATODAY.com, bigcharts.com, treasury.gov – 7/3/142,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
WEEKLY QUOTE
“Find your place, and let the world gravitate to you.”
– Diana Vreeland
WEEKLY TIP
If you’re curious about what retirement might be like, how about arranging a preview? Think about taking a 3-week vacation or even a longer break from work (your business or employer permitting).
WEEKLY RIDDLE
What do the words civic and level have in common?
Last week’s riddle:
There are two of them, and one can usually see what the other sees, but they can never see each other. What are they?
Last week’s answer:
Eyes.
Citations.
1 – blogs.wsj.com/economics/2014/07/03/highlights-from-the-june-u-s-jobs-report/ [7/4/14]
2 – usatoday.com/money/markets/overview/ [7/3/14]
3 – marketwatch.com/economy-politics/calendars/economic [7/3/14]
4 – latimes.com/business/realestate/la-fi-re-pending-home-sales-20140630-story.html [6/30/14]
5 – fxstreet.com/news/forex-news/article.aspx?storyid=ccbc855f-185e-4d6e-8d31-b4e88e1607e1 [7/3/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F3%2F13&x=0&y=0 [7/3/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F3%2F13&x=0&y=0 [7/3/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F3%2F13&x=0&y=0 [7/3/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F2%2F09&x=0&y=0 [7/3/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F2%2F09&x=0&y=0 [7/3/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F2%2F09&x=0&y=0 [7/3/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F2%2F04&x=0&y=0 [7/3/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F2%2F04&x=0&y=0 [7/3/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F2%2F04&x=0&y=0 [7/3/14]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/3/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/3/14]
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 Mark Lund, The 401k Advisor, Investor Coach and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. an independent, fee-only, Registered Investment Advisor firm providing 401k consulting for small businesses and private investment management services for professional athletes and select individuals. Stonecreek is located in Salt Lake City, Murray, West Jordan, Sandy, Draper, South Jordan, Provo, Orem, Lehi, Highland, Alpine, American Fork all in Utah.
