Weekly Economic Update – December 5, 2016

WEEKLY QUOTE

“Reprove thy friend privately; commend him publicly.” – Solon

WEEKLY TIP

Jointly owned assets typically avoid probate when one owner dies. With regard to asset transfer, joint ownership can result in a savings of money and time for a surviving spouse.

WEEKLY RIDDLE

Take away the first four letters of this word, and you have something to sleep on. Replace the last three letters with an L, and you have a month of the year. What is this seven-letter word?

Last week’s riddle:

A rope ladder dangles over the railing of a boat docked at a lake, its bottom end 4 inches above the water. One day, the lake waters rise 4 inches. How high off the water is the rope ladder now?

Last week’s answer:

4 inches. The boat rises with the water, so the gap between water and rope ladder doesn’t change.

JOBS REPORT SHOWS UNEMPLOYMENT AT 4.6%

America’s jobless rate fell to a nine-year low in November as companies added 178,000 net new jobs. The U-6 rate (including the underemployed decreased) 0.2% to 9.3%. There were some negatives: yearly wage growth moderated to 2.5%, and the labor force participation rate ticked down to 62.7%, in part because of baby boomer retirements.1

STRONG CONSUMER CONFIDENCE, SPENDING, GDP

As November ended, the Conference Board’s monthly consumer confidence index rose 6.3 points to a mark of 107.1. In October, personal spending increased 0.3%, according to the Census Bureau, with personal incomes up 0.6%. The Bureau of Economic Analysis revised third quarter growth upward by 0.3% to 3.2% last week.2

PENDING HOME SALES, HOME PRICES SEE GAINS

The S&P/Case-Shiller 20-city home price index showed a 5.5% annualized gain in its September edition, improved from 5.2% in August. Housing contract activity rose another 0.1% in October, according to the National Association of Realtors.2

MANUFACTURING INDEX IMPROVES

The Institute for Supply Management’s November purchasing manager index for the factory sector rose 1.3 points to 53.2, indicating another month of expansion. Analysts polled by MarketWatch had projected a reading of 52.5.2

OIL PRICES SKYROCKET; S&P 500 DECLINES

News of OPEC’s oncoming production cut drove WTI crude to its best week since January 2009. Futures settled Friday at $51.68 on the NYMEX, up 12.2% in five days (including a Thursday-Friday leap of almost 13%). Only the Dow Jones Industrial Average advanced among key Wall Street indices last week, rising 0.10% to 19,170.42. The S&P 500 dipped 0.97% on the week to 2,191.95; the Nasdaq Composite, 2.65% to 5,255.65; and the Russell 2000, 2.45% to 1,314.25.3,4

THIS WEEK: November’s ISM non-manufacturing PMI appears Monday. Earnings from Analogic, AutoZone, Bob Evans Farms, Dave & Buster’s, Michaels Stores, and Toll Brothers arrive Tuesday, plus a report on October factory orders. Wednesday’s earnings parade includes results from Casey’s General Stores, Costco, H&R Block, and Lululemon Athletica. A new initial jobless claims report comes out on Thursday, along with earnings from Broadcom, Dell, Hovnanian, and Toro. Friday brings the initial December consumer sentiment index from the University of Michigan.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+10.02
+8.13
+11.90
+5.72
NASDAQ
+4.96
+2.58
+20.01
+11.78
S&P 500
+7.24
+5.41
+15.23
+5.69
REAL YIELD
12/2 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.49%
0.62%
0.00%
2.10%

Sources: wsj.com, bigcharts.com, treasury.gov – 12/2/164,5,6,7

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.

Best regards,

Greg R. Solis, AIF®
President and CEO

Bob Medler, CRPC, CMFC, AIF®
Wealth Advisor / Investment Analyst

78-075 Main Street
Suite 204
La Quinta, CA 92253
Office: (760) 771-3339
Fax: (760) 771-3181

www.soliswealth.com
E-Mail: greg.solis@lpl.com
E-Mail: robert.medler@lpl.com
CA Insurance License #0795867

The Wealth Advisors of Solis Wealth Management are also Registered Representatives with and securities and advisory services are offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC

The information contained in this email message is being transmitted to and is intended for the use of only the individual(s) to whom it is addressed. If the reader of this message is not the intended recipient, you are hereby advised that any dissemination, distribution or copying of this message is strictly prohibited. If you have receivedthis message in error, please immediately delete.

P.S. You have my permission to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. 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 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. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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.

Citations.

1 – businessinsider.com/us-jobs-report-november-2016-2016-12 [12/2/16]
2 – marketwatch.com/economy-politics/calendars/economic [12/2/16]
3 – marketwatch.com/story/oil-prices-edge-lower-as-investors-assess-what-opec-oil-deal-can-deliver-2016-12-02/ [12/2/16]
4 – markets.wsj.com/us [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F2%2F15&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F2%2F15&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F2%2F15&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F2%2F11&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F2%2F11&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F2%2F11&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F1%2F06&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F1%2F06&x=0&y=0 [12/2/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F1%2F06&x=0&y=0 [12/2/16]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/2/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/2/16]