LATEST ISM FACTORY PMI IS A LETDOWN
The 3.2-point December descent of the Institute for Supply Management’s manufacturing index may not be as troubling as it first appeared to Wall Street. Purchasing managers surveyed by ISM noted that labor disputes at west coast ports held up raw material and hard goods shipments last month. At 55.5, the index still pointed to a growing factory sector even though it missed expectations (it came in 1.5 points beneath the forecast of economists polled by MarketWatch). The ISM factory PMI averaged 55.8 in 2014 for its best year since 2010.1,2
CONFIDENCE UP AS 2014 ENDS
In December, the Conference Board’s consumer confidence index reached 92.6, approaching a seven-year high that the CB recorded in October. In addition, the CB’s index measuring the outlook on current economic conditions hit a high unseen since February 2008. November’s reading was revised up to 91.0 from the prior 88.7.3
AN UPTURN FOR PENDING HOME SALES
According to the National Association of Realtors, they rose 0.8% in November – much better than October’s 1.1% retreat. October’s S&P/Case-Shiller home price index showed a 4.5% annual gain in its 20-city version, the smallest in two years; the nationwide gain was 4.6%, down from 4.8% in the September edition.3,4
STOCKS PULL BACK AS NEW YEAR BEGINS
Another abbreviated trading week brought losses for the Dow, S&P 500 and Nasdaq Composite. The NASDAQ slipped 0.98% for the week to end up at 4,726.81 Friday; respective 1.09% and 1.46% retreats for the DJIA and S&P left those benchmarks at 17,832.99 and 2,058.20 settlements.5,6
THIS WEEK: No major releases are scheduled on Monday. Tuesday brings not only ISM’s December services index, but also key December PMIs from China, Japan and the eurozone. Wednesday, ADP’s December employment change report accompanies the minutes from the December 16-17 Federal Reserve policy meeting and earnings from Monsanto and Family Dollar. The December Challenger job-cut report arrives Thursday, plus a new round of initial claims figures and earnings from Bed Bath & Beyond, PriceSmart, Ruby Tuesday, Barracuda Networks, The Container Store and Constellation Brands. The Labor Department puts out its December jobs report Friday.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +0.06 +8.46 +14.20 +6.62
NASDAQ -0.20 +14.09 +21.66 +11.96
S&P 500 -0.03 +12.35 +16.92 +7.12
REAL YIELD 1/2 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.41% 0.74% 1.48% 1.70%
Sources: online.wsj.com, bigcharts.com, treasury.gov – 1/2/156,7,8,9
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 RIDDLE
As I age my height changes, but not my importance. Your hand guides me and I help articulate what you want to say. When we part, I am not important or useful to you. What am I?
Last week’s riddle:
It can be measured even though it lacks length, width or height. What is it?
Last week’s answer:
Temperature.
Citations.
1 – marketwatch.com/story/ism-manufacturing-index-falls-in-december-to-slowest-rate-since-summer-2015-01-02 [1/2/15]
2 – haver.com [1/2/15]
3 – businessweek.com/news/2014-12-30/consumer-confidence-index-in-u-dot-s-dot-increased-to-92-dot-6-in-december [12/30/14]
4 – marketwatch.com/economy-politics/calendars/economic [1/2/15]
5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [1/2/15]
6 – markets.wsj.com/us [1/2/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F2%2F14&x=0&y=0 [1/2/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F2%2F14&x=0&y=0 [1/2/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F2%2F14&x=0&y=0 [1/2/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F31%2F09&x=0&y=0 [1/2/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F31%2F09&x=0&y=0 [1/2/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F31%2F09&x=0&y=0 [1/2/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F3%2F05&x=0&y=0 [1/2/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F3%2F05&x=0&y=0 [1/2/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F3%2F05&x=0&y=0 [1/2/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/2/15]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/2/15]
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.
