RETAIL SALES JUMP 0.6%
This September gain was impressive – minus auto sales, the advance was still 0.5%. In August, both headline and core retail sales fell 0.2%. While consumers bought more last month, they were less confident earlier this month – the University of Michigan’s initial October consumer sentiment index fell 3.3 points to 87.9.1
INTEREST RATES MAY SOON RISE
The minutes from September’s Federal Reserve policy meeting affirmed what some investors suspected. One, last month’s decision not to raise the federal funds rate was a “close call.” Two, the Federal Open Market Committee expects to make a move “relatively soon.” Last month, 74% of economists responding to a Wall Street Journal survey thought the central bank would raise rates in December.2
PRODUCER PRICE INDEX UP 0.3%
A 2.5% advance in energy prices became the biggest factor in September’s PPI gain. The headline PPI rose 0.7% in the 12 months ending in September.3
STOCKS PULL BACK AS EARNINGS SEASON BEGINS
During five choppy trading days last week, the Dow Jones Industrial Average retreated 0.56% to 18,138.38; the S&P 500, 0.96% to 2,132.98; and the Nasdaq Composite, 1.48% to 5,214.16. The CBOE Volatility Index closed at 16.00 Friday, up 18.69% for the week.4
THIS WEEK: Monday, Wall Street looks at earnings from Bank of America, Celanese, Del Taco, Hasbro, IBM, J.B. Hunt, Lennox International, and Netflix, plus numbers on September industrial output. On Tuesday, BlackRock, Domino’s Pizza, Goldman Sachs, Harley-Davidson, Intel, Johnson & Johnson, Philip Morris, Yahoo!, Regions Financial, UnitedHealth, and W.W. Grainger join the earnings parade, and the September CPI arrives. Abbott Labs, American Express, BB&T, Citrix, eBay, Mattel, Halliburton, Morgan Stanley, Northern Trust, Seagate, St. Jude Medical, SuperValu, U.S. Bancorp, and United Rentals all report earnings Wednesday; investors will also consider September data on housing starts and building permits, and a new Federal Reserve Beige Book. Thursday offers earnings from Alaska Air, American Airlines, BoNY Mellon, Dunkin’ Brands, E*TRADE, Fifth Third, IMAX, Invacare, Microsoft, Nucor, PayPal, PulteGroup, Quest Diagnostics, Schlumberger, Union Pacific, Verizon, and Walgreens Boots Alliance; reports on initial jobless claims and September existing home sales also appear. Friday, the key earnings reports come from General Electric, Honeywell International, McDonalds, Parker Hannifin, SunTrust, and Whirlpool.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +4.09 +7.17 +11.15 +5.17
NASDAQ +4.13 +9.02 +19.09 +12.12
S&P 500 +4.36 +6.96 +14.84 +5.62
REAL YIELD 10/14 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.13% 0.50% 0.28% 2.47%
Sources: wsj.com, bigcharts.com, treasury.gov – 10/14/164,5,6,7
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
“Young is the one that plunges into the future and never looks back.”
– Milan Kundera
WEEKLY TIP
If you are trying to rebuild or ramp up your retirement savings in your forties or fifties, avoid grasping at straws. Extremely speculative, high-risk investments are often hard to understand and may drastically underperform compared to their hype.
WEEKLY RIDDLE
I possess a single eye, yet I cannot see. I could, however, hurt you – even if I don’t move. What am I?
Last week’s riddle:
I have 6 faces, but I wear no makeup. I often roll around and bump into things. What am I?
Last week’s answer:
A die (singular of dice).
Citations.
1 – marketwatch.com/economy-politics/calendars/economic [10/14/16]
2 – tinyurl.com/hhanz42 [10/12/16]
3 – foxbusiness.com/markets/2016/10/14/september-producer-prices-rise-more-than-expected.html [10/14/16]
4 – markets.wsj.com/us [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F14%2F15&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F14%2F15&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F14%2F15&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F14%2F11&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F14%2F11&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F14%2F11&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F13%2F06&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F13%2F06&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F13%2F06&x=0&y=0 [10/14/16]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/14/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/14/16]
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 a Wealth Advisor, 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 investment and retirement planning for individuals and 401k consulting for small businesses. 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.
