Weekly Economic Update – February 1, 2016

WEEKLY QUOTE
“It is better to offer no excuse than a bad one.” – George Washington

WEEKLY TIP
When you eliminate a high-interest debt, direct the money that was once going toward it into an emergency fund, a college fund, or your retirement savings.

WEEKLY RIDDLE
Karen parks her car beside a hotel and instantly recognizes that she is bankrupt. How does she know this?

Last week’s riddle:
The more of them you will have, the longer you will live – but as you have more and more of them, the less you have left. What are they?

Last week’s answer:
Heartbeats.

ONE CONFIDENCE POLL RISES, ANOTHER FALLS

The Conference Board’s consumer confidence index rose in January to 98.1, beating the Briefing.com forecast of 96.3. The University of Michigan’s consumer sentiment index lost 0.6 points on the month, ending January at 92.0.1,2

NEW HOME SALES LEAP 10.8%

Census Bureau data showed new home buying at its hottest pace in 10 months in December – a seasonally adjusted annual rate of 544,000 sales. New home sales were up 14.5% for 2015. In other housing news, the National Association of Realtors said pending home sales rose 0.1% in December after a 1.1% November dip.1,3

FIRST ESTIMATE OF Q4 GROWTH: 0.7%

Away from that disappointing number, the Bureau of Economic Analysis presented some better data: America’s economy grew 2.4% in 2015, and household spending rose 3.1% last year. Still, another indicator affirmed recent manufacturing weakness: after an 0.5% retreat in December, durable goods orders fell 5.1% in January.1,2

STOCKS RALLY AS JANUARY ENDS

The Federal Reserve stood pat on interest rates last week, the Bank of Japan opted for negative interest rates, and oil prices stabilized. These developments sent shares higher: across five days, the Dow gained 2.32% to 16,466.30, the Nasdaq 0.50% to 4,613.95, and the S&P 500 1.75% to 1,940.24.4,5

THIS WEEK: On Monday, the December personal spending report and Institute for Supply Management’s January factory Purchasing Managers Index complement earnings from Aetna, Aflac, Alphabet, AmeriGas, Anadarko Petroleum, Mattel, Rent-A-Center, Sysco, Tesoro, and Wynn Resorts.Archer Daniels Midland, Chipotle, Dow Chemical, ExxonMobil, Gilead Sciences, Keurig Green Mountain, Michael Kors, Motorola Solutions, Pfizer, Pitney Bowes, Ryder, Sirius XM, and Yahoo! all offer earnings Tuesday. ISM’s latest service sector PMI and ADP’s January employment change report appear Wednesday, plus earnings from Allstate, Buffalo Wild Wings, Comcast, Exelon, General Motors, GlaxoSmithKline, GoPro, Marathon Petroleum, Merck, MetLife, Noble Corp., Shutterfly, Spectra Energy, Take-Two Interactive, and Yum! Brands. Thursday, the January Challenger job-cut report and a new initial claims report accompany earnings from Beazer Homes, Cigna, Clorox, ConocoPhillips, Dunkin’ Brands, Genworth Financial, GrubHub, Kemper, LinkedIn, Lions Gate, Magellan Midstream, News Corp., Occidental Petroleum, Philip Morris, Piper Jaffray, Ralph Lauren, SkyWest, Snap-On, and Valero Energy. The Labor Department’s January jobs report and earnings from Estee Lauder, Tyson Foods, and Weyerhaeuser emerge Friday.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-5.50
-5.46
+7.85
+5.11
NASDAQ
-7.86
-1.48
+14.34
+10.00
S&P 500
-5.07
-4.01
+10.40
+5.10
REAL YIELD
1/29 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.53%
0.55%
1.09%
2.03%

Sources: wsj.com, bigcharts.com, treasury.gov – 1/29/166,7,8,9

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

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
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

 

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Disclosure

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 – briefing.com/investor/calendars/economic/2016/01/25-29 [1/29/16]
2 – bloomberg.com/news/articles/2016-01-29/fourth-quarter-growth-sentiment-cool-u-s-economic-takeaways [1/29/16]
3 – usnews.com/news/business/articles/2016-01-27/us-new-home-sales-soar-in-december [1/27/16]
4 – reuters.com/article/us-usa-fed-kaplan-idUSKCN0V7293 [1/29/16]
5 – markets.wsj.com/us [1/29/16]
6 – markets.wsj.com/us [1/29/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F29%2F15&x=0&y=0 [1/29/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F29%2F15&x=0&y=0 [1/29/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F29%2F15&x=0&y=0 [1/29/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F28%2F11&x=0&y=0 [1/29/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F28%2F11&x=0&y=0 [1/29/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F28%2F11&x=0&y=0 [1/29/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F30%2F06&x=0&y=0 [1/29/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F30%2F06&x=0&y=0 [1/29/16]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F30%2F06&x=0&y=0 [1/29/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/29/16]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/29/16]