LARGEST INFLATION ADVANCE IN 5 YEARS
The Consumer Price Index rose 2.1% in 2016, marking its greatest annual gain since 2011. During 2015, consumer prices only increased by 0.7%. December saw a 0.3% rise for the headline CPI and a 0.2% gain for the core CPI (which excludes food and energy costs). The core CPI gained 2.2% last year.1
MUCH MORE GROUNDBREAKING IN DECEMBER
Cold had little impact on residential construction as 2016 ended. Housing starts advanced 11.3% last month and rose 5.7% for the year. Single-family starts declined 4.0% in December, but they still improved 3.9% in 2016. Building permits were down 0.2% last month and posted a yearly gain of 0.7%.2
GOLD GOES BACK ABOVE $1,200
The yellow metal rose 1.84% week-over-week to settle Friday at $1,210.00 on the COMEX. (Silver ended the week at $17.12.) On the NYMEX, oil ended up at $52.33 as Wall Street rang its closing bell Friday, retreating 0.19% week-over-week.3
MAJOR INDICES DRIFT LOWER
Stocks retreated last week, but just slightly. Across four trading days, losses trimmed the Dow Industrials by 0.30%, the S&P 500 by 0.15%, and the Nasdaq Composite by 0.32%. Friday’s settlements: Dow, 19,827.25; Nasdaq, 5,555.33; S&P, 2,271.31.4
THIS WEEK: On Monday, Halliburton, McDonalds, and Yahoo! report Q4 results. December existing home sales numbers arrive Tuesday, complementing earnings from 3M, Alibaba, Capital One, Corning, D.R. Horton, Discover, Fifth Third Bancorp, Johnson & Johnson, Kimberly-Clark, Lockheed Martin, Seagate Technology, Stryker, Texas Instruments, Travelers, and Verizon. Wednesday’s earnings parade features Abbott Labs, AT&T, Boeing, Briggs & Stratton, Brinker International, Dolby Labs, Citrix, Freeport-McMoRan, eBay, Norfolk Southern, Qualcomm, Raymond James, Rockwell Automation, United Rentals, W.W. Grainger, and Western Digital. New initial claims data appears Thursday, plus December new home sales figures and earnings from Alphabet, Biogen, Bristol-Myers Squibb, Caterpillar, Celgene, Comcast, Dow Chemical, E*TRADE, Ford, Intel, JetBlue, Microsoft, Northrop Grumman, PayPal, Praxair, PulteGroup, Quest Diagnostics, Raytheon, Regis, Royal Caribbean, Sherwin-Williams, Southwest Airlines, Stanley Black & Decker, and Starbucks. Friday offers the first estimate of Q4 GDP, December durable goods orders, the final January University of Michigan consumer sentiment index, and earnings from Chevron, American Airlines, Colgate-Palmolive, Honeywell, NextEra Energy, and Whirlpool.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +0.33 +25.75 +11.17 +5.78
NASDAQ +3.20 +24.23 +19.87 +12.66
S&P 500 +1.45 +22.16 +14.53 +5.88
REAL YIELD 1/20 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.44% 0.69% 0.01% 2.47%
Sources: wsj.com, bigcharts.com, treasury.gov – 1/20/175,6,7,8
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.
WEEKLY QUOTE
“Always laugh when you can. It is cheap medicine.”
– Lord Byron
WEEKLY TIP
If you think you will receive a federal tax refund this year, why not file electronically and arrange a direct deposit to your checking or savings account? Alternately, you can use IRS Direct Pay to make individual and estimated tax payments from your bank accounts.
WEEKLY RIDDLE
A bus without passengers pulls into Tucson, where 10 passengers board it. In Las Cruces, 5 passengers get off the bus, and twice as many passengers get on as in Tucson. Then in El Paso, 25 passengers get off the bus. How many people are on the bus as it leaves El Paso?
Last week’s riddle:
It is a home with no doors, and when its occupant leaves it cracks and it is no more. What is it?
Last week’s answer:
An egg.
Citations.
1 – houstonchronicle.com/business/economy/article/Consumer-prices-up-a-moderate-0-3-percent-last-10867241.php [1/18/17]
2 – marketwatch.com/story/housing-starts-surge-in-december-to-second-highest-pace-of-recovery-2017-01-19 [1/19/17]
3 – markets.on.nytimes.com/research/markets/commodities/commodities.asp [1/20/17]
4 – google.com/finance?q=INDEXDJX%3A.DJI&ei=pYOCWLmWKsn_jAHphIqQBg [1/20/17]
5 – markets.wsj.com/us [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F20%2F16&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F20%2F16&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F20%2F16&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F20%2F12&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F20%2F12&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F20%2F12&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F19%2F07&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F19%2F07&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F19%2F07&x=0&y=0 [1/20/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/20/17]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/20/17]
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.
