GOOD NEWS ABOUT CONSUMER SPENDING, Q4 GDP
Personal spending and personal wages both increased 0.5% in January, according to the Bureau of Economic Analysis. The BEA also revised Q4 growth up to 1.0% from its initial estimate of 0.7%. As a footnote to all this, capital goods orders jumped 4.9% in January.1
CONSUMER CONFIDENCE WANES
The Conference Board’s much-watched monthly index tumbled 5.6 points in February to a 7-month low of 92.2. Rather than a significant monthly fall, the University of Michigan’s consumer sentiment index took only a small one: it declined 0.3 points from its final January mark to a final February reading of 91.7.1,2
HOME PRICES, EXISTING HOME SALES ADVANCE
Despite severe weather in many parts of the nation, existing home sales rose 0.4% in January, the National Association of Realtors announced. The Census Bureau reported a 9.2% fall for new home sales in January, countering an 8.2% ascent in December. The December edition of the 20-city S&P/Case-Shiller home price index showed no monthly advance, but the index rose 5.7% in 2015.1
SOLID GAINS FOR THE MAJOR INDICES
During the past five trading days, investors saw the S&P 500 rise 1.58% to 1,948.05. The Dow Jones Industrial Average and Nasdaq Composite mirrored that weekly gain, improving 1.51% and 1.91%, respectively, on the way to Friday closes of 16,639.97 and 4,590.47. Like stocks, oil advanced for a second straight week, rising 3.2% in five days and settling at $32.78 on the NYMEX Friday.3,4
THIS WEEK: Monday offers NAR’s latest pending home sales index and earnings from Acadia Pharmaceuticals, Global Partners, Hertz Global, Magellan Health, and Tribune Media. ISM’s January factory PMI and China’s latest manufacturing PMI appear Tuesday, plus earnings from AutoZone, Bob Evans, Dick’s Sporting Goods, Dollar Tree, Progressive, and TiVo. Wednesday, investors assess the January ADP employment change report and a new Federal Reserve Beige Book, along with earnings announcements from Abercrombie & Fitch, American Eagle Outfitters, Costco, and Weibo. Wall Street looks at the January Challenger job-cut report, a new initial claims report, and ISM’s service sector PMI on Thursday, along with earnings from Barnes & Noble, Broadcom, Burlington Stores, Diamond Foods, H&R Block, Kroger Co., Planet Fitness, Smith & Wesson, and Wingstop. Friday, the Labor Department presents its January employment report, complementing Q4 results from Big Lots and Staples.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -4.51 -8.64 +7.44 +4.99
NASDAQ -8.33 -7.97 +13.01 +9.90
S&P 500 -4.69 -7.71 +9.52 +5.05
REAL YIELD 2/26 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.35% 0.24% 1.02% 2.04%
Sources: wsj.com, bigcharts.com, treasury.gov – 2/26/165,6,7,8
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
“We are made to persist. That’s how we find out who we are.”
– Tobias Wolff
WEEKLY TIP
Once a year, you should look at your insurance policies (life, disability, any others) to see if your coverage has any weak spots.
WEEKLY RIDDLE
I go back and forth constantly, but I never go forward. What am I?
Last week’s riddle:
Everywhere on earth I am found, I should not make you frown, I will always bring you down, but I will never send you up. What am I?
Last week’s answer:
Gravity.
Citations.
1 – tradingeconomics.com/united-states/calendar [2/26/16]
2 – tinyurl.com/zc93as5 [2/26/16]
3 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [2/26/16]
4 – marketwatch.com/story/oil-prices-remain-under-pressure-as-traders-stick-to-bearish-mood-2016-02-26/ [2/26/16]
5 – markets.wsj.com/us [2/26/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F26%2F15&x=0&y=0 [2/26/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F26%2F15&x=0&y=0 [2/26/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F26%2F15&x=0&y=0 [2/26/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F25%2F11&x=0&y=0 [2/26/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F25%2F11&x=0&y=0 [2/26/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F25%2F11&x=0&y=0 [2/26/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F27%2F06&x=0&y=0 [2/26/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F27%2F06&x=0&y=0 [2/26/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F27%2F06&x=0&y=0 [2/26/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/26/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/26/16]
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 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.
