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Growth Report – Monday, January 1, 2018

CONSUMER CONFIDENCE DECLINES
In December, the Conference Board’s monthly index fell sharply from its lofty November reading of 128.6. That number was a 17-year high. Economists polled by Bloomberg expected a retreat to 128.0; instead, the gauge dropped to 122.1, which was still one of its best readings in the past 15 years. Lynn Franco, the Conference Board’s director of economic indicators, noted that consumer expectations remain at “historically strong levels, suggesting economic growth will continue well into 2018.”1

OIL ENDS 2017 ABOVE $60
The yearlong comeback of light sweet crude culminated in a December 29 NYMEX close of $60.42, marking the commodity’s best settlement since the spring of 2015. Signs of reduced output and supply disruptions helped oil rally last week.2

HOME PRICES UP 6.2% in 12 MONTHS
That is the conclusion of the October S&P CoreLogic Case-Shiller home price index, a survey of home values across 20 U.S. regions released last week. In other housing news, the National Association of Realtors pending home sales index rose 0.2% in November, taking its annualized gain to 0.8%. The small advance is understandable; across the 12 months ending in November, existing home inventory thinned by nearly 10%.3

A TERRIFIC YEAR FOR EQUITIES CONCLUDES
In 2017, the Dow Jones Industrial Average gained 25.08%; the S&P 500, 19.42%; the Nasdaq Composite, 28.24%. The year’s last market week saw investors pocketing some gains: across four days, the Dow retreated 0.06% to 24,719.22; the S&P, 0.38% to 2,673.61; the Nasdaq, 0.80% to 6,903.39. The Russell 2000 small-cap benchmark finished 2017 at 1,535.51, rising 13.14% for the year; the CBOE VIX “fear index” lost 21.37% during 2017, wrapping up the year at 11.04.4,5

THIS WEEK: Monday, U.S. financial markets are closed in observance of New Year’s Day. Nothing major is slated for Tuesday. Wednesday, the Federal Reserve releases the minutes from its December policy meeting, the Institute for Supply Management presents its December factory PMI, and Rite Aid announces quarterly earnings. Thursday, a new Challenger job-cut report and ADP payrolls report arrive along with earnings from Monsanto, Sonic, and Walgreens Boots Alliance. The Department of Labor’s December employment report appears Friday, plus quarterly results from Constellation Brands.

% CHANGE 2017 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +25.08 +24.72 +18.21 +8.49
NASDAQ +28.24 +27.09 +26.64 +15.81
S&P 500 +19.42 +18.87 +18.13 +8.08
REAL YIELD 12/29 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.44% 0.55% -0.73% 1.78%

Sources: wsj.com, bigcharts.com, treasury.gov – 12/29/174,6,7,8
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

“We are not entitled to our opinions; we are entitled to our informed opinions. Without research, without background, without understanding, it’s nothing.”

– Harlan Ellison

WEEKLY TIP

Do you think you will have a 2018 tax refund? Consider using it to pay off a high-interest debt. If you have a debt at 18% interest, doing away with it is effectively like getting an 18% return.

WEEKLY RIDDLE

It occasionally comes up in conversation, and it never goes down. What is it?

Last week’s riddle:
Emily takes a picture at an art museum in Michigan. Why is she subsequently told not to leave the museum?

Last week’s answer:
She took a picture off the wall and took it with her.

Citations.
1 – businessinsider.com/consumer-confidence-conference-board-december-2017-2017-12 [12/27/17]
2 – marketwatch.com/story/oil-ends-above-60-for-the-first-time-in-about-2-12-years-2017-12-29 [12/29/17]
3 – tinyurl.com/ycwuvg59 [12/27/17]
4 – markets.wsj.com/us [12/29/17]
5 – finance.google.com/finance?q=INDEXSP:.INX&ei=5rRGWvGeL4GC2Aaah52YDw [12/29/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F29%2F16&x=0&y=0 [12/29/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F29%2F16&x=0&y=0 [12/29/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F29%2F16&x=0&y=0 [12/29/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F28%2F12&x=0&y=0 [12/29/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F28%2F12&x=0&y=0 [12/29/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F28%2F12&x=0&y=0 [12/29/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F28%2F07&x=0&y=0 [12/29/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F28%2F07&x=0&y=0 [12/29/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F28%2F07&x=0&y=0 [12/29/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/29/17]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/29/17]

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, Mark is known as a Wealth Advisor, The 401k Advisor, Investor Coach, The Financial Advisor, The Financial Planner 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 investment and retirement planning for individuals and 401k consulting for small businesses. Stonecreek is located in Park City, Salt Lake City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, and American Fork City 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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