Weekly Economic Update – February 21, 2017

WEEKLY QUOTE

“Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.” – George S. Patton

WEEKLY TIP

When a divorce settlement requires a party to keep up their life insurance, the insured should go through the underwriting process before signing the agreement. If new coverage cannot be easily obtained, trusts or other estate planning tools can be created in response.

WEEKLY RIDDLE

Picture three trees. Whatever happens to the third tree must happen to the first tree, and anything that happens to the second tree must be replicated on the third. What happens if the second tree is cut down?

Last week’s riddle:

Call loudly it does for great distances, thanks to its hard shell and tongue. Yet it will never breathe in making its noise, for it has no lung. What is it?

Last week’s answer:

A bell.

RETAIL SALES ROSE 0.4% IN JANUARY

Consumer spending on household electronics and appliances powered this gain. Analysts polled by Reuters had expected a 0.1% advance. Core retail purchases also rose 0.4% last month. The Department of Commerce revised the December increase for retail sales upward to 1.0%. Across the 12 months ending in January, retail sales advanced 5.6%.1

INFLATION PRESSURE MOUNTS

In January, the headline Consumer Price Index climbed 0.6%. That was its greatest monthly gain in four years, and it took annualized inflation to a 4-year high of 2.5%. Producer prices also jumped 0.6% in January, in the largest monthly increase seen since September 2012; that development left them up 1.6% year-over-year.1,2

BUILDING PERMITS UP, HOUSING STARTS DOWN

Unsurprisingly, groundbreaking declined in January. The Census Bureau recorded a 2.6% fall for housing starts in the winter weather. The rate of permits issued for future projects, however, increased by 4.6%.3

FURTHER GAINS IN A BULLISH FEBRUARY

The S&P 500 pulled off another weekly advance, adding 1.51% from February 13-17 on its way to a Friday settlement of 2,351.16. Its 5-day performance actually lagged both the Dow and the Nasdaq: the blue chips gained 1.75%, to 20,624.05, as the broad tech sector benchmark rose 1.82%, to 5,838.58.4

THIS WEEK: Monday is Presidents Day, so U.S. stock and bond markets are closed; America’s Car-Mart and Dillard’s report Q4 results. Tuesday, Advance Auto Parts, Cracker Barrel, HealthSouth, Home Depot, Kaiser Aluminum, La-Z-Boy, Macy’s, Medtronic, Newmont Mining, Nautilus, Papa John’s, Red Robin, and Walmart all join the earnings parade. On Wednesday, earnings from Cheesecake Factory, Chico’s FAS, DISH Network, Fitbit, Garmin, Green Dot, HP, Jack-in-the-Box, L Brands, Popeyes, Public Storage, Six Flags Entertainment, Square, Sunoco, Tesla, TJX, Toll Brothers, Transocean, and Weibo complement minutes from February’s Federal Reserve policy meeting and January existing home sales numbers. A new initial claims report arrives Thursday, along with earnings from AMC Networks, Baidu, Chesapeake Energy, Gap, Herbalife, Hewlett Packard Enterprise, Hormel Foods, iHeartMedia, Intuit, Kohl’s, Live Nation, Mitel, Nordstrom, Pinnacle Foods, Sears Holdings, Sprouts, and Toro. Friday, earnings from Berkshire Hathaway, Boise Cascade, Foot Locker, JCPenney, Magellan Health, and Revlon emerge, plus the final February University of Michigan consumer sentiment index and the January new home sales report.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+4.36
+25.34
+11.85
+6.15
NASDAQ
+8.46
+28.77
+19.56
+13.39
S&P 500
+5.02
+22.02
+14.54
+6.15
REAL YIELD
2/17 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.41%
0.53%
-0.23%
2.36%

Sources: wsj.com, bigcharts.com, treasury.gov – 2/17/174,5,6,7 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 – reuters.com/article/us-usa-economy-idUSKBN15U1NB [2/15/17]
2 – tradingeconomics.com/united-states/producer-prices [2/17/17]
3 – investing.com/economic-calendar/ [2/17/17]
4 – markets.wsj.com/us [2/17/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F17%2F16&x=0&y=0 [2/17/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F17%2F16&x=0&y=0 [2/17/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F17%2F16&x=0&y=0 [2/17/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F17%2F12&x=0&y=0 [2/17/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F17%2F12&x=0&y=0 [2/17/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F17%2F12&x=0&y=0 [2/17/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F16%2F07&x=0&y=0 [2/17/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F16%2F07&x=0&y=0 [2/17/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F16%2F07&x=0&y=0 [2/17/17]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/17/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/17/17]