FOURTH QUARTER SAW 2.6% GROWTH
Given the final 5.0% GDP reading for Q3, this initial Commerce Department estimate displeased many investors – even though the personal spending rate rose an impressive 4.3% in Q4. Investors also disliked the 3.4% overall dip in hard goods orders for December, which followed a 2.1% descent in November.1,2
HOUSEHOLDS IN AN UPBEAT MOOD
At 102.9, January’s Conference Board consumer confidence index shattered the 96.9 forecast of analysts polled by MarketWatch. The University of Michigan’s January consumer sentiment index reached 98.1, its best final monthly reading in 11 years.1,2
NEW HOME SALES ACCELERATE
They advanced 11.6% in December, with the Census Bureau noting an 8.8% yearly rise in the sales pace. On the other hand, the National Association of Realtors found pending home sales down 3.7% in December. November’s S&P/Case-Shiller home price index showed an overall 4.3% yearly gain, 0.2% less than the October edition.1,3
A ROUGH MONTH ENDS ON WALL STREET
While the January 28 Federal Reserve policy statement bullishly referenced an economy growing at “a solid pace,” disappointment over key earnings reports and the Q4 GDP number sent stocks further south. Losing another 2.77% across five trading days, the S&P 500 concluded January at 1,994.99. The Dow and Nasdaq also gave up ground last week – the Dow lost 2.87% to close at 17,164.95 Friday, while the Nasdaq retreated 2.58% in five days to slip to 4,635.24.4,5
THIS WEEK: Monday brings December personal spending numbers, ISM’s latest factory activity index, new factory PMIs for the eurozone and China and earnings from ExxonMobil, Sysco, Hartford Financial and Pitney Bowes. Tuesday offers data on December factory orders and January auto sales plus earnings from Chipotle, UPS, Archer Daniels Midland, Walt Disney, BP, Aetna and Gannett. ISM’s January services index and ADP’s employment change report are out Wednesday, along with earnings from Clorox, Marathon Petroleum, Whirlpool, Sony, Yum! Brands, General Motors, Merck, Humana, Keurig Green Mountain, Ralph Lauren, Under Armour, Allstate and Suncor Energy. Thursday brings January’s Challenger job-cut report, new initial claims figures and earnings from Twitter, Lions Gate Entertainment, Buffalo Wild Wings, Pandora, Sprint, Activision Blizzard, GoPro, Philip Morris, Symantec, AstraZeneca, Sirius XM, Michael Kors, Teva Pharmaceutical, Yelp, Dunkin Brands, LinkedIn and Expedia. Friday sees the release of the Labor Department’s January jobs report plus earnings from Alcatel-Lucent and Moody’s.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -3.69 +8.31 +14.10 +6.36
NASDAQ -2.13 +12.42 +23.17 +12.47
S&P 500 -3.10 +11.19 +17.16 +6.89
REAL YIELD 1/30 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.03% 0.57% 1.30% 1.65%
Sources: online.wsj.com, bigcharts.com, treasury.gov – 1/30/156,7,8,9
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
“Never promise more than you can perform.”
– Publilius Syrus
WEEKLY TIP
Retirement living is fundamentally about income versus expenses. If you retire with numerous debts and liabilities and high expenses, retirement may fast become financially uncomfortable for you. Do what you can to whittle debt and expenses down.
WEEKLY RIDDLE
A ship cruised out of the Pacific Ocean and into the Atlantic Ocean through the Panama Canal – but as it went through the Panama Canal, it didn’t travel east. How is this possible?
Last week’s riddle:
Francis had finished cleaning the windows on his 2-story house when he slipped and fell off a ladder. He wasn’t injured, however. How come?
Last week’s answer:
He slipped off of one of the ladder’s lowest steps, so he was only a few feet above the ground when he fell.
Citations.
1 – marketwatch.com/economy-politics/calendars/economic [1/30/15]
2 – latimes.com/business/la-fi-gdp-fourth-quarter-economy-20150130-story.html [1/30/15]
3 – consumeraffairs.com/news/new-home-sales-surge-in-december-012715.html [1/27/15]
4 – reuters.com/article/2015/01/28/us-usa-fed-idUSKBN0L10DZ20150128 [1/28/15]
5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [1/30/15]
6 – markets.wsj.com/us [1/30/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F30%2F14&x=0&y=0 [1/30/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F30%2F14&x=0&y=0 [1/30/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F30%2F14&x=0&y=0 [1/30/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F29%2F10&x=0&y=0 [1/30/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F29%2F10&x=0&y=0 [1/30/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F29%2F10&x=0&y=0 [1/30/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F31%2F05&x=0&y=0 [1/30/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F31%2F05&x=0&y=0 [1/30/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F31%2F05&x=0&y=0 [1/30/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/30/15]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/30/15]
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, 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 financial Advisor services for professional athletes and 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.
