CPI SHOWS ANNUAL DEFLATION
Dipping 0.7% in January, the Labor Department’s Consumer Price Index posted a 0.1% annual retreat – its first yearly decline since 2009. As the core CPI rose 0.2% in January and gas prices are moving north, the headline CPI’s stint in deflation territory may be short-lived. The federal government also announced its second estimate of Q4 GDP last week – a passable 2.2% – and a 2.8% boost in hard goods orders for January.1,2
HOUSEHOLD CONFIDENCE DECLINES
The Conference Board’s monthly survey of consumers slipped 7.4 points in February to a reading of 96.4. At the end of January, the University of Michigan’s consumer sentiment index reached 98.1; the final February index came in lower at 95.4.2,3
PENDING HOME SALES, HOME PRICES RISE
The National Association of Realtors said housing contract activity increased 1.7% in January, and December’s S&P/Case-Shiller index showed a 4.5% overall annual increase in existing home prices. The Census Bureau noted an 0.2% dip in new home sales in January, however; the NAR found resales falling 4.9% in that month.2,4
FEBRUARY WAS FANTASTIC FOR STOCKS
Look at these monthly gains: S&P 500, 5.49%; Dow, 5.64%; Nasdaq, 7.08%. Last week, the S&P lost 0.27% and the Dow 0.04% while the Nasdaq rose 0.15%. Final numbers: DJIA, 18,132.70; Nasdaq, 4,963.53; S&P, 2,104.50. Oil fell 1.32% to $49.27 on the NYMEX, gold rose 1.21% to $1,213.60 on the COMEX.5,6
THIS WEEK: ISM’s January manufacturing index appears Monday, plus January’s consumer spending report and earnings from Progressive, NutriSystem and Molycorp. On Tuesday, the Street examines earnings from Best Buy, AutoZone, Smith & Wesson, Revlon, Bob Evans, TiVo and Dick’s Sporting Goods, and Federal Reserve chair Janet Yellen speaks on bank regulation in New York. Wednesday brings February’s ADP employment change report, a new Beige Book from the Federal Reserve, ISM’s February services index and earnings from Abercrombie & Fitch, American Eagle, Korn/Ferry, PetSmart, Jamba, Tribune Publishing, Scripps Co. and H&R Block. February’s Challenger job cuts report arrives Thursday along with the latest bank stress test results from the Fed, new initial claims numbers and a report on January factory orders; earnings roll in from Chesapeake Utilities, Marcus & Millichap, Costco, Martha Stewart Living, Fresh Market, Quiksilver and Kroger. The Labor Department’s February employment report comes out Friday, as well as earnings from Foot Locker, BigLots! and Staples.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +1.74 +11.43 +15.12 +6.84
NASDAQ +4.80 +14.92 +24.35 +14.19
S&P 500 +2.21 +13.49 +18.11 +7.49
REAL YIELD 2/26 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.24% 0.49% 1.48% 1.70%
Sources: online.wsj.com, bigcharts.com, treasury.gov – 2/27/155,7,8,9,10
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
“Try not to become a man of success but rather to become a man of value.”
– Albert Einstein
WEEKLY TIP
Plan your charitable gifts well in advance of the end of the year; explore possibilities and define the size of such gifts today.
WEEKLY RIDDLE
They have wings. As they grow up, they also grow down. What are they?
Last week’s riddle:
Katherine and Sterling each have the same amount of pears. How many pears does Katherine need to give Sterling so that Sterling has 10 more pears than she does?
Last week’s answer:
5. When Katherine gives Sterling 5 pears, she will lose 5 and he will gain five, resulting in a net difference of 10. So they both have at least 5 pears to begin with.
Citations.
1 – tinyurl.com/pn4rvqe [2/26/15]
2 – marketwatch.com/economy-politics/calendars/economic [2/27/15]
3 – investing.com/economic-calendar/michigan-consumer-sentiment-320 [2/27/15]
4 – usnews.com/news/business/articles/2015/02/25/us-new-home-sales-barely-nudge-up-in-january [2/25/15]
5 – markets.wsj.com/us [2/27/15]
6 – markets.on.nytimes.com/research/markets/commodities/commodities.asp [2/27/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F27%2F14&x=0&y=0 [2/27/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F27%2F14&x=0&y=0 [2/27/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F27%2F14&x=0&y=0 [2/27/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F26%2F10&x=0&y=0 [2/27/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F26%2F10&x=0&y=0 [2/27/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F26%2F10&x=0&y=0 [2/27/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F28%2F05&x=0&y=0 [2/27/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F28%2F05&x=0&y=0 [2/27/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F28%2F05&x=0&y=0 [2/27/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/27/15]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/27/15]
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.
