EMPLOYERS ADD 257,000 JOBS IN JANUARY
That beat the 230,000 hires forecast in a MarketWatch consensus of analysts. Yes, the headline jobless rate actually rose 0.1% to 5.7% last month, and the total unemployment rate (U-6) rose for the first time in six months to 11.3% – but average hourly wages were up 0.5%, a striking shift after the 0.3% December decrease.1,2
ONE ISM PMI FALLS, ANOTHER RISES
The Institute for Supply Management’s January factory PMI lost 1.6 points to come in at 53.5, while its January service sector index advanced 0.2 points to 56.7. Analysts polled by MarketWatch projected readings of 55.0 for the manufacturing gauge and 56.5 for the services gauge. In related news, the Federal Reserve said factory orders fell 3.4% in December, twice the November decline.1
CONSUMER SPENDING SANK IN DECEMBER
December saw a welcome 0.3% gain in consumer incomes but also a 0.3% pullback in consumer spending – the largest monthly dip since 2009. The Commerce Department noted sizable December declines in car and truck sales – and less spending on gas and other fuels. The personal savings rate rose 0.6% to 4.9%.3
MOMENTUM RETURNS TO THE MARKET
Oil rallied, hiring topped expectations and the euro area was poised to receive an economic stimulus, so big gains were the order of the week. The Dow soared 3.84% in five trading days, settling Friday at 17,824.29. The same stretch saw the Nasdaq climb 2.35% to 4,744.40 and the S&P 500 jump 3.03% to 2,055.47. Light sweet crude gained 8.84% last week in New York to reach $52.08 a barrel Friday; gold futures lost 3.62% on the COMEX.4
THIS WEEK: Monday, Wall Street reviews Q4 results from Loews Corp. and Hasbro. Tuesday brings data on December wholesale stockpiles plus earnings from CVS Health, Akamai, Dean Foods, LifeLock, Monster, Genworth, Kinross Gold, Molson Coors, Spirit Airlines, Starwood Hotels and Western Union. More earnings appear on Wednesday: Cisco, Tesla, Baidu, MetLife, Applied Materials, Panera, AOL, Cheesecake Factory, NetApp, Mosaic, Nvidia, PepsiCo, Owens Corning, Panera, Tesoro, Time Warner, TripAdvisor, Whole Foods and Zulily. January retail sales and December business inventories reports are out on Thursday, along with the latest initial jobless claims numbers and earnings from Coca-Cola, Avon, Apache, Groupon, Zynga, AIG, Boyd Gaming, CBS, Kellogg, Kraft Foods and Shutterfly. The University of Michigan’s initial February consumer sentiment index and earnings from J.M. Smucker and Red Robin complete the week on Friday.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +0.01 +14.05 +15.61 +6.63
NASDAQ +0.18 +16.94 +24.32 +12.79
S&P 500 -0.17 +15.90 +18.56 +7.10
REAL YIELD 2/6 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.24% 0.57% 1.32% 1.62%
Sources: online.wsj.com, bigcharts.com, treasury.gov – 2/6/155,6,7,8
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.
WEEKLY QUOTE
“No problem is so formidable that you can’t walk away from it.”
– Charles M. Schulz
WEEKLY TIP
Student discounts abound. Urge your son or daughter to take advantage of every retail discount they can get with a campus ID card.
WEEKLY RIDDLE
What 8-letter name would be cute and logical for a house cat living below the Mason-Dixon line?
Last week’s riddle:
A ship cruised out of the Pacific Ocean and into the Atlantic Ocean through the Panama Canal – but as it went through the Panama Canal, it didn’t travel east. How is this possible?
Last week’s answer:
The Panama Canal runs northwest-southeast. Ships travel northwest through the canal to enter the Caribbean Sea (and the Atlantic Ocean).
Citations.
1 – marketwatch.com/economy-politics/calendars/economic [2/6/15]
2 – tinyurl.com/nyfpnt2 [2/6/15]
3 – marketwatch.com/story/consumer-spending-posts-biggest-drop-since-2009-2015-02-02 [2/2/15]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [2/6/15]
5 – markets.wsj.com/us [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F6%2F14&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F6%2F14&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F6%2F14&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F5%2F10&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F5%2F10&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F5%2F10&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F7%2F05&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F7%2F05&x=0&y=0 [2/6/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F7%2F05&x=0&y=0 [2/6/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/6/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/6/15]
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.
