ECONOMY ADDS 321,000 JOBS
November 2014 was the best month for hiring since January 2012. Analysts polled by MarketWatch had projected payrolls expanding by 235,000 jobs last month, and that forecast was trumped. While seasonal jobs constituted 50,000 of the new positions, professional and business hires comprised 86,000 more. The Labor Department also found average hourly wages rising 0.4% last month (though they were still just up 2.1% in 12 months). More hiring gains like this might lead the Federal Reserve to tighten a bit sooner than investors anticipate. The jobless rate (which the Labor Department determines from a different survey of households) stayed at 5.8% in November, but the U-6 rate including both the jobless and underemployed ticked down to 11.4%.1,2
FACTORY, SERVICE SECTORS STAY HEALTHY
November brought a major gain for the non-manufacturing PMI maintained by the Institute for Supply Management: it advanced 2.2 points to 59.3. ISM’s factory PMI dipped from October’s 59.0 reading to 58.7, still far above the 50 mark that delineates expansion from contraction. A MarketWatch survey of economists projected both PMIs to come in at 57.7.2,3
GOLD RALLIES, OIL RETREATS FURTHER
Across December 1-5, the precious metal gained 1.3% on the COMEX, ending the week at $1,190.40 an ounce. That happened even as the greenback hit a 5-year high versus a number of key currencies Friday, reducing gold’s lure. Oil prices declined again – NYMEX crude settled Friday at a 5½-year low of $65.84 a barrel.4
DOW NEARS 18,000
The blue chips settled just a rally removed from that milestone Friday at 17,958.79, rising 0.73% in 5 days. How did the Nasdaq and S&P 500 do? The former declined 0.23% on the week to 4,780.76; the latter rose 0.38% during the week to 2,075.37.5
THIS WEEK: Nothing major is scheduled for Monday. Tuesday, earnings from AutoZone, Burlington Stores and Krispy Kreme arrive along with data on October wholesale inventories. Wednesday brings earnings from Men’s Wearhouse, Costco, Casey’s General Stores and Toll Brothers. November retail sales numbers are out Thursday, plus reports on initial jobless claims and October business stockpiles and Q3 results from Lululemon Athletica. Friday, Wall Street interprets the University of Michigan’s initial December consumer sentiment index, November’s Producer Price Index and a report on China’s November factory output.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +8.34 +13.51 +14.57 +7.03
NASDAQ +14.47 +18.54 +23.57 +12.22
S&P 500 +12.28 +16.27 +17.53 +7.44
REAL YIELD 12/5 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.56% 0.76% 1.34% 1.70%
Sources: online.wsj.com, bigcharts.com, treasury.gov – 12/5/146,7,8,9
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 what we pretend to be, so we must be careful what we pretend to be.”
– Kurt Vonnegut
WEEKLY TIP
If you care for an elderly parent or a grandparent, reserve a drawer in the house where their financial, legal and insurance documents can be stored and easily located in an emergency. Or, opt for an online vault for these documents.
WEEKLY RIDDLE
Olivia throws a softball as hard as she can, and even though it doesn’t touch anything and nobody touches it, the softball comes right back to her. How is this possible?
Last week’s riddle:
It can be less thick than your finger when it folds, yet as thick as what it carries when it holds. What is it?
Last week’s answer:
A sack.
Citations.
1 – forbes.com/sites/samanthasharf/2014/12/05/jobs-report-u-s-economy-added-321000-jobs-in-november-unemployment-steady-at-5-8/ [12/5/14]
2 – marketwatch.com/economy-politics/calendars/economic [12/5/14]
3 – ism.ws/ [12/5/14]
4 – proactiveinvestors.com/companies/news/58616/gold-drops-14-us-crude-retreats-to-over-5-yr-low-58616.html [12/5/14]
5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [12/5/14]
6 – markets.wsj.com/us [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F5%2F13&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F5%2F13&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F5%2F13&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F4%2F09&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F4%2F09&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F4%2F09&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F6%2F04&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F6%2F04&x=0&y=0 [12/5/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F6%2F04&x=0&y=0 [12/5/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/5/14]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/5/1
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 private investment management services for professional athletes and select 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.
