Growth Report for Monday, January 12, 2015

America’s best year for hiring since 2000 wrapped up with 252,000 more people finding work in December. Labor Department data showed the jobless rate declining to 5.6% last month (the U-6 rate tracking the unemployed and underemployed decreased to 11.2%). The economy added 2.53 million non-farm payroll jobs in 2014, representing 1.9% net employment growth. October and November hiring totals were respectively revised up to 261,000 and 353,000. December did see wages slip 0.2%; private sector average hourly earnings increased just 1.7% during 2014.1

The latest Institute for Supply Management’s non-manufacturing purchasing manager index came in at 56.2 – still strong, but well under the November reading of 59.3. Tempering that disappointment is the fact that ISM’s services index has shown sector growth for 59 consecutive months.2

The price of West Texas Intermediate crude fell 8.2% last week on the NYMEX. A barrel was valued at just $48.36 at Friday’s close. With OPEC doing nothing to reduce output, investors are left wondering when the steep losses will end. Gold did very well last week, rising 2.5% on the COMEX to settle Friday at $1,216.10.3

Crude’s continuing slump, excellent December hiring, assumptions of central bank action, fears following the terrorist attack in Paris – they all contributed to pronounced volatility. Selling exceeded buying: the S&P 500 lost 0.63% in five days to settle at 2,044.81 Friday. The Dow pulled back 0.50% for the week to 17,737.37, the Nasdaq 0.49% to 4,704.07.4,5

THIS WEEK: Here comes earnings season: Alcoa reports Q4 results Monday, with KB Home following suit Tuesday. Wednesday offers data on December retail sales and November business inventories, the latest eurozone factory output report, a new Beige Book from the Federal Reserve and earnings from Charles Schwab, Kinder Morgan, Wells Fargo and JPMorgan Chase. Thursday’s spate of earnings announcements includes releases from Bank of America, Citigroup, Intel, Lennar, Schlumberger and BlackRock. On Friday, the December Consumer Price Index and the Federal Reserve’s report on December industrial output arrive along with the latest eurozone inflation reading and the preliminary January consumer sentiment index from the University of Michigan.

DJIA -0.48 +7.86 +13.41 +6.70
NASDAQ -0.68 +13.18 +20.60 +12.43
S&P 500 -0.68 +11.24 +15.72 +7.18
10 YR TIPS 0.36% 0.66% 1.41% 1.77%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 1/9/155,6,7,8
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.


“I would not waste my life in friction when it could be turned into momentum.”

– Frances Willard


If your business is a corporation, how is it structured? Using multiple entities might lead to big tax savings.


What comes at the end of a rainbow?

Last week’s riddle:
As I age my height changes, but not my importance. Your hand guides me and I help articulate what you want to say. When we part, I am not important or useful to you. What am I?

Last week’s answer:
A pencil.

1 – haver.com [1/9/15]
2 – ism.ws/ismreport/nonmfgrob.cfm [1/6/15]
3 – proactiveinvestors.com/companies/news/59186/gold-rebounds-after-2-straight-losses-us-crude-settles-down-09–59186.html [1/9/15]
4 – google.com/finance?q=INDEXDJX%3A.DJI&ei=z02wVKKhKe7FiwLW2IBo [1/9/15]
5 – markets.wsj.com/us [1/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F9%2F14&x=0&y=0 [1/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F9%2F14&x=0&y=0 [1/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F9%2F14&x=0&y=0 [1/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F8%2F10&x=0&y=0 [1/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F8%2F10&x=0&y=0 [1/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F8%2F10&x=0&y=0 [1/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F10%2F05&x=0&y=0 [1/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F10%2F05&x=0&y=0 [1/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F10%2F05&x=0&y=0 [1/9/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/9/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/9/15]

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 financial Advisor services for professional athletes and 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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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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