Weekly Economic Update – February 15, 2016

WEEKLY QUOTE
“Laughter is the closest distance between two people.” – Victor Borge

WEEKLY TIP
Some people moonlight for extra income, but getting that second job may just be a response to uncontrolled spending. Added income will not correct that problem; it may even encourage it.

WEEKLY RIDDLE
Switch one letter each from the words “plus” and “minus” to the other word, and you have two entirely new words. What are they?

Last week’s riddle:
When you lack me, you feel a sort of gloom. When you use me, it is time you consume. What am I?

Last week’s answer:
Sleep.

OIL JUMPS 12%, BUT STOCKS RETREAT FOR THE WEEK

On Friday, West Texas Intermediate crude closed at a NYMEX price of $29.44 after a 12.32% surge. However, it fell 4.69% on the week, and major U.S. stock benchmarks fell as well. Across five days, the Dow Jones Industrial Average declined 1.43% to 15,973.84; the Nasdaq Composite, 0.58% to 4,337.51; and the S&P 500, 1.95% to 1,864.78. Gold closed Friday at $1,239.00 on the COMEX, capping its best week since 2008 and its first four-week win streak since last April.^1,2

BETTER NEWS ABOUT RETAIL SALES
Commerce Department data showed retail purchases increasing 0.2% last month, with impressive 0.6% growth for core retail sales (a category excluding auto, home improvement, and restaurant purchases). The 0.1% pullback in headline retail sales in December was revised to a 0.2% advance.³

A HINT OF CONSUMER PESSIMISM

The University of Michigan’s initial February consumer sentiment index displayed a 90.7 reading compared to 92.0 at the end of January. Its future expectations component fell 1.7 points to a 6-month low, a major reason for the decline.³

MORTGAGE RATES REACH 10-MONTH LOW

On February 11, Freddie Mac’s Primary Mortgage Market Survey showed the average interest rate on a 30-year home loan at 3.65%, moving lower for the sixth straight week. The recent rush to Treasuries by investors has helped keep rates low. Last week, the average interest for the 15-year fixed rate home loan was 2.95%.⁴

THIS WEEK: Monday is Presidents Day, so U.S. financial markets will be closed. On Tuesday, Cheesecake Factory, Dean Foods, Express Scripts, Fossil Group, Hormel, Kaiser Aluminum, and Public Storage announce earnings. Minutes from the January Federal Reserve policy meeting arrive Wednesday, along with the January PPI, reports on January housing starts, building permits and industrial output, and earnings from Denny’s, Domino’s, Dr. Pepper Snapple, Gannett, Jack in the Box, Garmin, La-Z-Boy, Marathon Oil, Marriott, Newmont Mining, Noble Energy, Nvidia, NetApp, Priceline, Progressive, and T-Mobile. Thursday, new initial claims figures arrive along with earnings from America’s Car-Mart, Applied Materials, Cabela’s, BJ’s Restaurants, Boise-Cascade, Choice Hotels, DISH Network, Duke Energy, Fluor, Hyatt Hotels, MGM Resorts, Six Flags Entertainment, Novatel Wireless, Nordstrom, Starwood Hotels & Resorts, Virgin America, and Wal-Mart. The January CPI will be out Friday, along with quarterly results from Deere & Co.

Sources: wsj.com, bigcharts.com, treasury.gov – 2/12/16^2,5,6,7

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

Bob Medler, CRPC, CMFC, AIF®
LPL Wealth Advisor

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 – foxbusiness.com/markets/2016/02/12/wall-street-surges-but-caps-week-in-red.html [2/12/16]
2 – markets.wsj.com/us [2/12/16]
3 – investors.com/news/economy/retail-sales-looked-stronger-in-january-as-consumer-stays-solid/ [2/12/16]
4 – usatoday.com/story/money/personalfinance/2016/02/11/mortgage-rates-housing-freddie-mac/80231032/ [2/11/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F12%2F15&x=0&y=0 [2/12/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F12%2F15&x=0&y=0 [2/12/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F12%2F15&x=0&y=0 [2/12/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F11%2F11&x=0&y=0 [2/12/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F11%2F11&x=0&y=0 [2/12/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F11%2F11&x=0&y=0 [2/12/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F13%2F06&x=0&y=0 [2/12/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F13%2F06&x=0&y=0 [2/12/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F13%2F06&x=0&y=0 [2/12/16]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/12/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/12/16]