Dec

15

Growth Report for Monday, December 15, 2014

AMERICANS BUY MORE, SENTIMENT INDEX SOARS
Commerce Department data showed retail sales jumping 0.7% for November – the best monthly advance recorded in a year. More good news came from the University of Michigan – its initial December consumer sentiment index came in at 93.8, way up from 88.8 at the end of last month. The improvement may reflect relief at falling gas prices as well as added belief in the economy.1

WHEN WILL OIL HIT BOTTOM?
Last week saw the International Energy Agency lower its estimates for 2015 global oil demand, and so NYMEX crude for January delivery finished Friday’s trading day at just $57.81 a barrel. At Friday’s close, oil was down 12.94% MTD and 25.90% over the past 30 days. COMEX gold futures, on the other hand, were up 4.75% MTD and settled at $1,222.50 Friday.2,3

WHOLESALE PRICES DIP
The Producer Price Index is yet another indicator affected by cheap oil. It declined 0.2% in November, taking the annualized gain down to 1.4%. The core PPI was flat last month and up 1.8% in a year.1

CRUDE PRICES DRAG DOWN STOCK PRICES
Bears freely roamed Wall Street last week, with a major selloff occurring Friday. In fact, December 8-12 represented the worst week for the Dow since 2011. The 5-day losses across the major indices were severe: DJIA, 3.78% to 17,280.83; S&P, 3.52% to 2,002.33; NASDAQ, 2.66% to 4,653.60.2,4

THIS WEEK: On Monday, VeriFone reports Q3 results. Tuesday offers a report on November housing starts and building permits and earnings from Darden Restaurants. Wednesday is busier: the Federal Reserve makes a policy statement, the November CPI and the latest euro area CPI arrive, and Carnival, Oracle, FedEx, General Mills and Jabil Circuit report earnings. Thursday, earnings from Rite Aid, Winnebago Industries, Nike, Accenture, Red Hat and ConAgra Foods complement a new report on initial jobless claims. Friday, BlackBerry reports earnings.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +4.25 +9.79 +13.01 +6.24
NASDAQ +11.42 +16.39 +22.49 +11.66
S&P 500 +8.33 +12.78 +16.20 +6.70
REAL YIELD 12/12 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.46% 0.75% 1.41% 1.65%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 12/12/145,6,7,8
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.

WEEKLY QUOTE

“Anger makes dull men witty, but it keeps them poor.”

– Queen Elizabeth I

WEEKLY RIDDLE

Brothers and sisters, I have none, but this man’s father is my father’s son. Who am I talking about?

Last week’s riddle:
Olivia throws a softball as hard as she can, and even though it doesn’t touch anything and nobody touches it, the softball comes right back to her. How is this possible?

Last week’s answer:
She throws it straight up in the air.

Citations.
1 – investing.com/economic-calendar/ [12/12/14]
2 – proactiveinvestors.com/companies/news/58785/dow-drops-over-300-pts-to-end-worst-week-in-3-years-58785.html [12/12/14]
3 – money.cnn.com/data/commodities/ [12/12/14]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [12/12/14]
5 – markets.wsj.com/us [12/12/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F12%2F13&x=0&y=0 [12/12/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F12%2F13&x=0&y=0 [12/12/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F12%2F13&x=0&y=0 [12/12/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F11%2F09&x=0&y=0 [12/12/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F11%2F09&x=0&y=0 [12/12/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F11%2F09&x=0&y=0 [12/12/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F13%2F04&x=0&y=0 [12/12/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F13%2F04&x=0&y=0 [12/12/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F13%2F04&x=0&y=0 [12/12/14]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/12/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/12/14]

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.

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Category: Blog, Economic Updates

About the Author ()

Mark K. Lund is the firm's founder, CEO and author of The Effective Investor, a #1 Best Seller. He has written articles for or been quoted in: The Wall Street Journal, The Salt Lake Tribune, The Enterprise Newspaper, The Utah Business Connect Magazine, US News & World Report, and Newsmax.com, just to name a few.  Mark publishes two newsletters called, “The Mark Lund Growth Report” and “Mark Lund on Money.”  Mark provides CPE (continuing professional education) courses for CPAs.  You may also have seen him on KUTV Channel 2, or as a guest speaker at a local association or business. Mark provides investment and retirement planning services for individuals and 401(k) consulting for small businesses. In his book, The Effective Investor, Mark exposes the false narrative magazines, media, big Wall Street firms, and most advisors want you to believe. The good news is that Mark will show you that you don’t need their speculative ways of investing in order to be successful. Get a free copy when you schedule your initial consultation.

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