HOW LOW WILL OIL FUTURES GO?
Did they hit bottom Friday afternoon, when WTI crude settled at $35.62 on the NYMEX? Maybe not, given the International Energy Agency’s new advisory that the oil glut may grow larger in 2016. Even Brent crude, the global benchmark, closed at $37.94 at the end of the week. Forecasts for a mild winter have also disappointed oil investors. Not since February 2009 have WTI crude prices been this low.1
RETAIL SALES IMPROVE 0.2%
The November gain fell short of the 0.3% advance projected by analysts polled by Briefing.com, but it surpassed the 0.1% increase for October. Core retail sales (minus auto, gas, and home improvement purchases) rose a healthy 0.4% last month.2
CONSUMERS GROW A BIT MORE POSITIVE
Last week brought a minor gain for the University of Michigan’s consumer sentiment index. It had ended November at 91.3; its preliminary December reading was slightly better at 91.8, beating a Briefing.com consensus forecast of 91.6.2
PRODUCER PRICES HEAD NORTH
After three months without an advance, the federal government’s Producer Price Index rose 0.3% for November. The core PPI increased by the same amount. Year over year, headline PPI was still down 1.1% while core PPI was up 0.5%.2,3
STOCKS RETREAT AS CRUDE PRICES SINK
All three major indices were rattled by the rout in oil. On the week, the Dow lost 3.26%, the S&P 500 3.79%, and the Nasdaq 4.06%. Their Friday closes: Nasdaq, 4,933.47; Dow, 17,265.21; S&P, 2,012.37.4
THIS WEEK: Monday, China releases new data on its industrial output and Navistar and VeriFone offer Q4 earnings news. The November CPI arrives Tuesday. Wednesday, investors around the world will react to the Federal Reserve’s latest policy decision (announcement at 2:00pm EST with subsequent press conference); reports on November housing starts, building permits and industrial production will also appear, plus earnings news from Cintas, FedEx, Jabil Circuit, Oracle, and Pier 1. Thursday, the Conference Board issues its November leading indicator index, new initial claims figures are released, and Accenture, Carnival, General Mills, Red Hat, Scholastic Corp., and Winnebago all present earnings. CarMax, Darden Restaurants, and Lennar round out the week with earnings news on Friday.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -3.13 -1.88 +10.26 +6.03
NASDAQ +4.17 +4.79 +17.41 +11.82
S&P 500 -2.26 -1.13 +12.45 +5.97
REAL YIELD 12/11 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.67% 0.49% 1.16% 2.17%
Sources: wsj.com, bigcharts.com, finance.yahoo.com, treasury.gov – 12/11/155,6,7,8,9
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 can have facts without thinking but we cannot have thinking without facts.”
– John Dewey
WEEKLY TIP
Too many people believe they can create a great lifestyle for themselves by buying goods and services. They end up with depreciating material items and large debts. Paying yourself first and investing for the long term is a better path toward a better quality of life.
WEEKLY RIDDLE
Gaze at my flat and anchored face. You will not see 13 any place. What am I?
Last week’s riddle:
These two things are measured by units associated with temperature and time, yet they mark no time and have no temperature. What are they?
Last week’s answer:
Latitude and longitude.
Citations.
1 – cnbc.com/2015/12/10/us-crude-oil-holds-near-2009-lows-as-global-glut-persists.html [12/11/15]
2 – briefing.com/investor/calendars/economic/2015/12/07-11 [12/11/15]
3 – briefing.com/Investor/Calendars/Economic/Releases/ppi.htm [12/11/15]
4 – markets.on.nytimes.com/research/markets/overview/overview.asp [12/11/15]
5 – markets.wsj.com/us [12/11/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F11%2F14&x=0&y=0 [12/11/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F11%2F14&x=0&y=0 [12/11/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F11%2F14&x=0&y=0 [12/11/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F10%2F10&x=0&y=0 [12/11/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F10%2F10&x=0&y=0 [12/11/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F12%2F05&x=0&y=0 [12/11/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F12%2F05&x=0&y=0 [12/11/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F12%2F05&x=0&y=0 [12/11/15]
7 – finance.yahoo.com/q/hp?s=^DJI&a=11&b=8&c=2010&d=11&e=11&f=2010&g=d [12/11/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/11/15]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/11/15]
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 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 401k consulting for small businesses and financial Advisor services for professional athletes and individuals. 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.
