Growth Report – Monday, January 14, 2019

FOR THE FIRST TIME SINCE MARCH, INFLATION RETREATS
December brought a 0.1% decline in the Consumer Price Index, the first in nine months. As in November, cheaper gasoline was a factor: gas prices took a 7.5% monthly fall. The CPI advanced 1.9% across 2018. The core CPI, which excludes food and energy costs, rose 0.2% in December for a third consecutive month and gained 2.2% for the year. In short, yearly inflation is back in the vicinity of the Federal Reserve’s 2.0% target.1

SERVICE SECTOR GROWTH RATE SLOWS
The Institute for Supply Management said that its purchasing manager index service, tracking industry activity, descended to 57.6 in December, paralleling the dip of its factory sector PMI. While the decrease of 3.1 points was a disappointment, the new orders sub-index did rise slightly to 62.7, and the service sector expanded for the 107th straight month.2

OIL RECORDS ITS LONGEST DAILY WINNING STREAK IN 9 YEARS
Crude oil futures are no longer scraping near 52-week lows. WTI crude settled at $51.59 on the New York Mercantile Exchange at Friday’s close, up 7.6% for the week. A down day on Friday broke a 9-session streak of advances for the commodity, the longest seen since January 2010.3

BENCHMARKS RISE ON THE EVE OF EARNINGS SEASON
Investors were encouraged by hints of progress in U.S.-China trade negotiations last week and seemed unruffled by the ongoing shutdown of parts of the federal government. Across five trading days, all three major Wall Street equity indices rose 2.4% or more, and both the S&P 500 and Dow Jones Industrial Average exited correction territory with the fourth-quarter reporting season just ahead. (See the table within this Weekly Economic Update for their Friday closes as well as weekly and YTD performances.)4

T I P O F T H E W E E K

Many people sign up for credit cards without looking at their interest rates and terms. Be sure to read the fine print when applying for a card.

THIS WEEK
A new earnings season starts Monday as Citigroup presents Q4 results. | JPMorgan Chase, UnitedHealth Group, and Wells Fargo report earnings on Tuesday, and the December Producer Price Index also emerges. | Wednesday, Alcoa, Bank of America, BNY Mellon, Blackrock, Comerica, CSX, Goldman Sachs, PNC Financial Services Group, and U.S. Bancorp announce earnings, the Federal Reserve publishes a new Beige Book, and data on December retail sales arrives. | Thursday, earnings roll in from American Express, BB&T, KeyCorp, and Netflix; in addition, investors will consider a Census Bureau report on December housing starts and the latest initial jobless claims figures. | Regions Financial, Schlumberger, and SunTrust Bank offer earnings Friday, which is also when the University of Michigan provides its preliminary January consumer sentiment index.

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

“Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations.”
Steve JOBS

MARKET INDEX

CLOSE

WEEK

Y-T-D

DJIA

23,995.95

+2.40

+2.87

NASDAQ

6,971.48

+3.45

+5.07

S&P 500

2,596.26

+2.54

+3.57

TREASURY

CLOSE

WEEK

Y-T-D

10 YEAR NOTE

2.71

-0.04

+0.02

Sources: wsj.com, treasury.gov – 1/11/195,6,7
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. Weekly and year-to-date market index returns are expressed as percentages. 10-year Treasury note yield = projected return on investment, expressed as a percentage, on the U.S. government’s 10-year bond. Weekly and year-to-date 10-year Treasury note yield differences are expressed in basis points.

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

What speaks, also listens, and has ten digits yet no hands?

LAST WEEK’S RIDDLE: Bryn’s mother and father have three kids. One is Kenzie, the second one is Carrie, who is the third?
ANSWER: Bryn.

CITATIONS:
1 – cnbc.com/2019/01/10/consumer-price-index-december-2018.html [1/11/19]
2 – dailyfx.com/forex/market_alert/2019/01/07/ISM-Services-Index-Dec-2018.html [1/7/19]
3 – marketwatch.com/story/us-oil-prices-end-lower-to-snap-9-session-streak-of-gains-2019-01-11 [1/11/19]
4 – marketwatch.com/story/stock-market-ends-session-flat-but-books-weekly-gains-as-government-shutdown-approaches-a-record-2019-01-11 [1/11/19]
5 – markets.wsj.com/ [1/11/19]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [1/11/19]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [1/11/19]

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: Salt Lake County, 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, American Fork City, and Utah County in Utah.

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