142,000 NEW JOBS CREATED IN SEPTEMBER
Is a global slowdown impacting the U.S. economy? The latest Labor Department jobs report seemed to say yes. Hiring last month fell far short of the 200,000 total projected by economists in a MarketWatch survey. Moreover, job gains across July and August were revised down by 59,000. There was some good news – the U-6 (underemployment) rate declined 0.3% to 10.0%. The headline jobless rate stayed at 5.1%. After the report’s release, just 2% of futures investors on the Chicago Mercantile Exchange felt the Federal Reserve would raise interest rates in October; only 29% thought the Fed would do so in December.1,2
CONSUMER SPENDING, CONFIDENCE BOTH RISE
Good news from the Commerce Department – August brought an 0.4% rise in personal spending and an 0.3% rise in personal wages. A day later, another encouraging number arrived from Main Street – the Conference Board’s consumer confidence index rose 1.5 points in September to 103.0.2
ISM MANUFACTURING PMI SINKS TO 50.2
As 50 is the Institute for Supply Management’s line between sector growth and contraction, the September reading for this globally watched factory index was troubling. In another disconcerting development, the Commerce Department said factory orders declined 1.7% in August.2
PENDING HOME SALES INDEX SLIPS
The National Association of Realtors announced a 1.4% reduction in the number of home sale contracts in September. That followed a 0.5% increase in August. July’s edition of the S&P/Case-Shiller home price index showed an overall 5.0% yearly advance, ticking up from 4.9% in the June edition.2
INVESTORS SEE LESS CAUSE FOR FED TO TIGHTEN
The subpar job report spurred a rally, and so the S&P 500 ended up 1.04% higher for the week, closing Friday at 1,951.36. The Dow and Nasdaq settled Friday at 16,472.37 and 4,707.78 after respective weekly gains of 0.97% and 0.45%.3
THIS WEEK: ISM’s service sector PMI appears Monday, along with quarterly results from The Container Store. PepsiCo and Yum! Brands report earnings on Tuesday. Wednesday offers earnings from Constellation Brands and Monsanto. Minutes from the Federal Reserve’s September policy meeting arrive Thursday, along with initial jobless claims numbers and earnings from Alcoa, Domino’s and Ruby Tuesday. Nothing major is slated for Friday.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -7.58 -1.96 +10.42 +5.64
NASDAQ -0.60 +6.27 +19.72 +11.84
S&P 500 -5.22 +0.27 +14.05 +5.90
REAL YIELD 10/2 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.51% 0.49% 0.75% 1.84%
Sources: wsj.com, bigcharts.com, treasury.gov – 10/2/154,5,6,7
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
“Character is much easier kept than recovered.”
– Thomas Paine
WEEKLY TIP
Maintain an emergency fund in retirement. It can help you in a crisis. It can be tapped if income taxes from your RMDs turn out to be higher than anticipated. It could also help you avoid making withdrawals from retirement accounts when there are market dips.
WEEKLY RIDDLE
What wintry thing flies as it is born, lies when alive, and runs when dead?
Last week’s riddle:
Take a letter out of it, and it stays put and the same; remove all the letters from it and it still stays put and stays the same. What is it?
Last week’s answer:
A mailbox.
Citations.
1 – forbes.com/sites/samanthasharf/2015/10/02/jobs-report-u-s-added-142000-jobs-in-september-unemployment-rate-steady-at-5-1/ [10/2/15]
2 – marketwatch.com/economy-politics/calendars/economic [10/2/15]
3 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [10/2/15]
4 – markets.wsj.com/us [10/2/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F2%2F14&x=0&y=0 [10/2/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F2%2F14&x=0&y=0 [10/2/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F2%2F14&x=0&y=0 [10/2/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F1%2F10&x=0&y=0 [10/2/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F1%2F10&x=0&y=0 [10/2/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F1%2F10&x=0&y=0 [10/2/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F3%2F05&x=0&y=0 [10/2/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F3%2F05&x=0&y=0 [10/2/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F3%2F05&x=0&y=0 [10/2/15]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/2/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/2/15]
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, Mark is known as 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 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, and American Fork in Utah.
