WHY DID CONSUMER SPENDING DECLINE IN JULY?
Last month’s 0.1% dip surprised analysts. In inflation-adjusted terms, the Commerce Department measured the pullback at 0.2%. Household confidence, though, continues to increase. The University of Michigan’s consumer sentiment index finished August at 82.5, up from 81.8 at the end of July and refuting the Wall Street Journal consensus forecast for a retreat to 80.2. The Conference Board consumer confidence index also got an August bump, rising to 92.4 from the previous 90.3 reading.1,2
HOME PRICE GROWTH CONTINUES TO MODERATE
So indicates the June S&P/Case-Shiller Home Price Index: its 20-city composite index shows a year-over-year overall increase of 8.1% (down from 9.3% in May). It did post a 1.0% monthly gain. The National Association of Realtors said pending home sales increased 3.3% in July, while the Census Bureau found new home buying declining 2.4% last month.2
RECORD MONTHLY LEAP FOR DURABLES
According to the Census Bureau, July saw a 22.6% gain in hard goods orders. What was behind that? A record order for Boeing jets. Minus transportation orders, core durable goods orders actually dipped 0.8% in July.2,3
BROAD BENCHMARK SURPASSES 2,000
The S&P 500 crawled over that important psychological milestone last week and stayed above it at week’s end, settling Friday at 2,003.37 and gaining 0.75% in five days. Last week also saw advances for the DJIA (+0.57% to 17,098.45) and the NASDAQ (+0.92% to 4,580.27).4
THIS WEEK: Wall Street is closed Monday for the Labor Day holiday. On Tuesday, the August ISM manufacturing index appears. Wednesday brings a new Federal Reserve Beige Book, federal government reports on August auto sales and July factory orders, and earnings from Toll Brothers and H&R Block. ISM’s August service sector index comes out Thursday, along with the August ADP employment change report, the August Challenger job cuts report, new initial jobless claims numbers and earnings from Quiksilver, Hovnanian and VeriFone. The Labor Department issues its August employment report Friday.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +3.15 +15.21 +15.83 +6.89
NASDAQ +9.67 +26.52 +25.15 +14.94
S&P 500 +8.39 +22.29 +18.94 +8.23
REAL YIELD 8/29 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.23% 0.65% 1.76% 1.83%
Sources: online.wsj.com, bigcharts.com, treasury.gov – 8/29/145,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.
WEEKLY QUOTE
“One can never consent to creep when one feels an impulse to soar.”
– Helen Keller
WEEKLY TIP
Retirement savings calculators are handy, but not all of them account for variables. Take their estimates with a grain of salt.
WEEKLY RIDDLE
Glittering points that downward thrust. Sparkling spears that cannot rust. What are they?
Last week’s riddle:
What is located in the middle of nowhere?
Last week’s answer:
The letter H.
Citations.
1 – nasdaq.com/article/endaugust-reutersmich-sentiment-rises-to-825-above-expectations-20140829-00273 [8/29/14]
2 – investing.com/economic-calendar/ [8/29/14]
3 – marketwatch.com/story/durable-goods-orders-jump-226-in-july-on-boeing-contracts-2014-08-26 [8/26/14]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [8/29/14]
5 – markets.wsj.com/us [8/29/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F29%2F13&x=0&y=0 [8/29/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F29%2F13&x=0&y=0 [8/29/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F29%2F13&x=0&y=0 [8/29/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F28%2F09&x=0&y=0 [8/29/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F28%2F09&x=0&y=0 [8/29/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F28%2F09&x=0&y=0 [8/29/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F30%2F04&x=0&y=0 [8/29/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F30%2F04&x=0&y=0 [8/29/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F30%2F04&x=0&y=0 [8/29/14]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/29/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/29/14]
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.
