FED HINTS AT A DECEMBER RATE HIKE
Minutes from the October Federal Open Market Committee meeting were released last Wednesday, and they revealed that “most” of the 10 FOMC members thought that conditions for a rate hike “could well be met by the time of the next meeting.” Another passage noted that “it may well become appropriate to initiate the normalization process” at the December 15-16 Fed policy meeting. The minutes also stated that “economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run.”1
CONSUMER PRICES ROSE 0.2% IN OCTOBER
This advance in the headline CPI contrasted with retreats in August and September. The core CPI also rose 0.2% last month. In annualized terms, the headline CPI increased 0.2% in the 12 months ending in October, the core CPI 1.9%.2
OIL CLOSES UNDER $4o
Light crude settled at just $39.39 a barrel on the NYMEX Friday. That was the lowest close seen since late August. Oil has sunk 10.35% so far in November. On the COMEX, gold ended the week at $1,075.90 per ounce, silver at $14.09 per ounce.3
FALL RALLY RESUMES
Investors seemed relieved rather than bothered by the prospect of higher interest rates before the end of the year. The Dow, Nasdaq and S&P 500 had great weeks, posting respective 5-day gains of 3.35%, 3.59% and 3.27%. When things settled Friday, the Dow ended the week at 17,823.81, the Nasdaq at 5,104.92 and the S&P at 2,089.17.4
THIS WEEK: On Monday, Wall Street looks at October existing home sales and earnings from GameStop, Palo Alto Networks and Tyson Foods. Tuesday offers the Conference Board’s November consumer confidence index, the second estimate of Q3 GDP from the BEA, the S&P/Case-Shiller home price index for September and earnings from Campbell Soup, Chico’s, Cracker Barrel, Dollar Tree, DSW, Fred’s, GUESS?, Hormel Foods, HP, Tiffany and TiVo. Wednesday sees the release of the University of Michigan’s final November consumer sentiment index, the latest initial claims numbers, reports on October new home sales, capital goods orders and personal spending, and Q3 results from Deere. Thursday is Thanksgiving Day, so U.S. stock and bond markets will be closed. Wall Street will have a shortened trading day on Friday (the NYSE and NASDAQ will close at 1:00pm EST) with no major economic or earnings reports scheduled.
% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +0.00004 +0.59 +11.82 +6.47
NASDAQ +7.79 +8.57 +20.55 +12.77
S&P 500 +1.47 +1.77 +14.83 +6.65
REAL YIELD 11/20 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.66% 0.49% 0.77% 2.08%
Sources: wsj.com, bigcharts.com, treasury.gov – 11/20/155,6,7,8
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
“Far and away the best prize that life offers is the chance to work hard at work worth doing.”
– Theodore Roosevelt
WEEKLY TIP
As you plan for retirement, view Social Security benefits as a supplement to your retirement savings. You do not want to have to “rely” on Social Security once retired.
WEEKLY RIDDLE
You cannot see me. I am inside everyone. I only emerge in anger. The shorter I am, the hotter I am. What am I?
Last week’s riddle:
5 letters have I, I start in E and end in Y. Take away my first, third and last letter and the 2 letters left will sound the same as when you started with me. I am a 5-letter word; what word am I?
Last week’s answer:
Empty.
Citations.
1 – foxbusiness.com/economy-policy/2015/11/18/federal-reserve-minutes/ [11/18/15]
2 – cnbc.com/2015/11/17/us-consumer-price-index-oct-2015.html [11/20/15]
3 – money.cnn.com/data/commodities/ [11/20/15]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [11/20/15]
5 – markets.wsj.com/us [11/20/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F31%2F14&x=0&y=0 [11/20/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F20%2F14&x=0&y=0 [11/20/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F20%2F14&x=0&y=0 [11/20/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F20%2F14&x=0&y=0 [11/20/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F19%2F10&x=0&y=0 [11/20/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F19%2F10&x=0&y=0 [11/20/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F19%2F10&x=0&y=0 [11/20/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F21%2F05&x=0&y=0 [11/20/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F21%2F05&x=0&y=0 [11/20/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F21%2F05&x=0&y=0 [11/20/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/20/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/20/15]
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 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.
