JOBS REPORT SHOWS UNEMPLOYMENT AT 4.6%
America’s jobless rate fell to a nine-year low in November as companies added 178,000 net new jobs. The U-6 rate (including the underemployed decreased) 0.2% to 9.3%. There were some negatives: yearly wage growth moderated to 2.5%, and the labor force participation rate ticked down to 62.7%, in part because of baby boomer retirements.1
STRONG CONSUMER CONFIDENCE, SPENDING, GDP
As November ended, the Conference Board’s monthly consumer confidence index rose 6.3 points to a mark of 107.1. In October, personal spending increased 0.3%, according to the Census Bureau, with personal incomes up 0.6%. The Bureau of Economic Analysis revised third quarter growth upward by 0.3% to 3.2% last week.2
PENDING HOME SALES, HOME PRICES SEE GAINS
The S&P/Case-Shiller 20-city home price index showed a 5.5% annualized gain in its September edition, improved from 5.2% in August. Housing contract activity rose another 0.1% in October, according to the National Association of Realtors.2
MANUFACTURING INDEX IMPROVES
The Institute for Supply Management’s November purchasing manager index for the factory sector rose 1.3 points to 53.2, indicating another month of expansion. Analysts polled by MarketWatch had projected a reading of 52.5.2
OIL PRICES SKYROCKET; S&P 500 DECLINES
News of OPEC’s oncoming production cut drove WTI crude to its best week since January 2009. Futures settled Friday at $51.68 on the NYMEX, up 12.2% in five days (including a Thursday-Friday leap of almost 13%). Only the Dow Jones Industrial Average advanced among key Wall Street indices last week, rising 0.10% to 19,170.42. The S&P 500 dipped 0.97% on the week to 2,191.95; the Nasdaq Composite, 2.65% to 5,255.65; and the Russell 2000, 2.45% to 1,314.25.3,4
THIS WEEK: November’s ISM non-manufacturing PMI appears Monday. Earnings from Analogic, AutoZone, Bob Evans Farms, Dave & Buster’s, Michaels Stores, and Toll Brothers arrive Tuesday, plus a report on October factory orders. Wednesday’s earnings parade includes results from Casey’s General Stores, Costco, H&R Block, and Lululemon Athletica. A new initial jobless claims report comes out on Thursday, along with earnings from Broadcom, Dell, Hovnanian, and Toro. Friday brings the initial December consumer sentiment index from the University of Michigan.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +10.02 +8.13 +11.90 +5.72
NASDAQ +4.96 +2.58 +20.01 +11.78
S&P 500 +7.24 +5.41 +15.23 +5.69
REAL YIELD 12/2 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.49% 0.62% 0.00% 2.10%
Sources: wsj.com, bigcharts.com, treasury.gov – 12/2/164,5,6,7
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
“Reprove thy friend privately; commend him publicly.”
– Solon
WEEKLY TIP
Jointly owned assets typically avoid probate when one owner dies. With regard to asset transfer, joint ownership can result in a savings of money and time for a surviving spouse.
WEEKLY RIDDLE
Take away the first four letters of this word, and you have something to sleep on. Replace the last three letters with an L, and you have a month of the year. What is this seven-letter word?
Last week’s riddle:
A rope ladder dangles over the railing of a boat docked at a lake, its bottom end 4 inches above the water. One day, the lake waters rise 4 inches. How high off the water is the rope ladder now?
Last week’s answer:
4 inches. The boat rises with the water, so the gap between water and rope ladder doesn’t change.
Citations.
1 – businessinsider.com/us-jobs-report-november-2016-2016-12 [12/2/16]
2 – marketwatch.com/economy-politics/calendars/economic [12/2/16]
3 – marketwatch.com/story/oil-prices-edge-lower-as-investors-assess-what-opec-oil-deal-can-deliver-2016-12-02/ [12/2/16]
4 – markets.wsj.com/us [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F2%2F15&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F2%2F15&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F2%2F15&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F2%2F11&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F2%2F11&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F2%2F11&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F1%2F06&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F1%2F06&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F1%2F06&x=0&y=0 [12/2/16]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/2/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/2/16]
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 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.