Jul

31

Growth Report – Monday, July 30, 2018

First estimate of Q2 GDP: 4.1%
Not since the third quarter of 2014 has the economy grown at such a pace. In its report released Friday, the Bureau of Economic Analysis noted 4.0% growth in consumer outlays during the quarter, a 7.3% improvement in business spending, and 3.5% more federal government spending. The BEA also revised the first-quarter GDP number up 0.2% to 2.2%.1

CONSUMER SENTIMENT FALLS TO A 6-MONTH LOW
The University of Michigan’s final July consumer sentiment index came in at 97.9, 0.8 points higher than its preliminary reading earlier in the month, but 0.3 points below its final June mark. This minor month-over-month descent left the gauge at its lowest level since January.2

HOME SALES RETREAT
Existing home purchases slowed 0.6% in June, and new home buying weakened 5.3%. June was the third straight month to see a pullback in resales, according to the National Association of Realtors, and existing home sales were down 2.2%, year-over-year, as the first half of 2018 ended. In its monthly report, the Census Bureau noted that new home sales are up 6.9% YTD.3

STOCKS PULL OUT OF CORRECTION MODE
On Wednesday, the S&P 500 – the Wall Street index that the financial media typically uses as shorthand for the broad stock market – exited its longest correction in nearly 34 years by settling at 2,846.07. (A correction is defined as a descent of at least 10% from an index’s peak close; an index recovers from a correction when it climbs 10% above a closing low.) The S&P gained 0.61% for the week, finishing Friday at 2,818.82. The Dow Industrials bettered that, adding 1.57% in five days to reach 25,451.06 at Friday’s closing bell. Losing 1.06% for the week, the Nasdaq Composite declined to 7,737.42.4,5

T I P O F T H E W E E K
It is better to create an emergency fund with gradual amounts from your paycheck than with a lump sum taken from an investment account. Retirement savings will not grow and compound if they are drawn down early.

THIS WEEK
On Monday, the NAR presents its June pending home sales index, and Acadia Healthcare, AK Steel, Bloomin’ Brands, Booz Allen Hamilton, Caterpillar, CNA Financial, Denny’s, KBR, Kemper, Loews, Logitech, Nautilus, Nutrisystem, Rent-A-Center, Seagate Technology, and Transocean offer earnings news. | Tuesday, June personal spending data emerges, along with the June PCE price index, the Conference Board’s latest consumer confidence index, and earnings from Anadarko Petroleum, Apple, Archer Daniels Midland, Baidu, BP, Charter Communications, Container Store, Credit Suisse, Cummings, Extra Space Storage, Fidelity National, Fortis, Fresh Del Monte Produce, Frontier Communications, Genworth, Huntsman, Hyatt Hotels, Pandora Media, Pfizer, Procter & Gamble, Ralph Lauren, Sony, Unisys, Vulcan Materials, WestJet, and William Lyon Homes. | On Wednesday, the Federal Reserve issues its latest policy statement, ADP puts out its latest payrolls report, the Institute for Supply Management unveils its June manufacturing PMI, and earnings arrive from Alamo Group, Allstate, AMC Entertainment, AmeriGas, Arcelor Mittal, AutoNation, Chesapeake Energy, Cirrus Logic, Diebold Nixdorf, Energizer Holdings, Express Scripts, Fitbit, Garmin, Hanesbrands, Herbalife, Humana, Macerich, Marathon Oil, MetLife, Molson Coors, Pitney Bowes, Prudential Financial, Public Storage, Sprint, Square, Taylor Morrison, Tesla, TripAdvisor, U.S. Steel, Valvoline, Voya Financial, Wyndham Hotels & Resorts, and Zynga. | Thursday’s earnings roll call includes Activision Blizzard, Aetna, AMC Networks, AIG, Avon, Blue Apron, CBRE Group, CBS, Cigna, Clorox, DowDuPont, Duke Energy, Fluor, GoDaddy, GoPro, Icahn Enterprises, Kellogg, MGM Resorts, Motorola Solutions, Parker Hannifin, Pinnacle Foods, RE/MAX Holdings, Shake Shack, Spectra Energy, Symantec, Take-Two Interactive, Teva Pharmaceutical, Western Union, Wingstop, and Yum! Brands. | A new employment report from the Department of Labor appears Friday, plus ISM’s June non-manufacturing PMI and earnings from Kraft Heinz.

Q U O T E O F T H E W E E K

“No act of kindness, no matter how small, is ever wasted.”
AESOP

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

2.96

16.59

12.72

12.86

NASDAQ

12.08

21.38

22.83

24.17

S&P 500

5.43

14.03

13.33

12.84

REAL YIELD

7/27 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.84

0.49

0.43

1.70

Sources: wsj.com, bigcharts.com, treasury.gov – 7/27/185,6,7,8
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.

T H E W E E K L Y R I D D L E

What can you feel but never touch, hear but never see?

LAST WEEK’S RIDDLE: Scott has math 4 times a week. If he has math at 8:00 Monday, 9:00 on Tuesday and Wednesday, and 8:00 on Friday, when does he have math on Thursday?
ANSWER: Scott does not have math on Thursday, as he already has math at the four other times.

CITATIONS:
1 – cnbc.com/2018/07/27/us-gdp-q2-2018.html [7/27/18]
2 – bloomberg.com/news/articles/2018-07-27/u-s-consumer-sentiment-falls-to-six-month-low-on-trade-concern [7/27/18] 
3 – nytimes.com/aponline/2018/07/25/us/politics/ap-us-new-home-sales.html [7/25/18]
4 – marketwatch.com/story/the-sp-500-just-ended-its-longest-stint-in-correction-territory-since-1984-2018-07-25 [7/25/18]
5 – markets.wsj.com/us [7/27/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F28%2F17&x=0&y=0 [7/27/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F28%2F17&x=0&y=0 [7/27/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F28%2F17&x=0&y=0 [7/27/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F26%2F13&x=0&y=0 [7/27/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F26%2F13&x=0&y=0 [7/27/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F26%2F13&x=0&y=0 [7/27/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F28%2F08&x=0&y=0 [7/27/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F28%2F08&x=0&y=0 [7/27/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F28%2F08&x=0&y=0 [7/27/18]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/27/18]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/27/18]

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. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment and retirement planning for individuals and 401k consulting for small businesses. Cities served but not limited to are: 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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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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