Weekly Economic Update – February 22, 2016

WEEKLY QUOTE
“A hunch is creativity trying to tell you something.” – Frank Capra

WEEKLY TIP
Every two years, you should check to see if your retirement strategy needs adjusting in light of life events and changing goals.

WEEKLY RIDDLE
Everywhere on earth I am found, I should not make you frown, I will always bring you down, but I will never send you up. What am I?

Last week’s 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 answer:
Plum and sinus.

WALL STREET HAS ITS BEST WEEK OF 2016

Across four trading days, the S&P 500 rose 2.84% and the Dow Jones Industrial Average, 2.62%; the Nasdaq Composite beat them both with a 3.85% gain. The Friday settlements: Dow Jones, 16,391.99; Nasdaq, 4,504.43; S&P, 1,917.78. West Texas Intermediate crude settled at $29.64 on the NYMEX Friday and gold at $1,230.80 on the COMEX.1

WHOLESALE PRICES OUTPACE CONSUMER PRICES

Core producer prices rose o.4% in January according to the Bureau of Labor Statistics, with the headline Producer Price Index up 0.1%. The Consumer Price Index was flat in January, with the core index up 0.3%; core consumer prices rose 2.2% across the 12 months ending in January.2

BUILDERS STARTED FEWER PROJECTS LAST MONTH

January saw a 0.2% decline in building permits and a 3.8% dip in housing starts. Permits are still outpacing starts, so both Commerce Department indicators could see gains in February.3

INDUSTRIAL OUTPUT IMPROVES 0.9% IN JANUARY

This was the largest monthly increase reported by the Federal Reserve since November 2014, and it included a 0.5% advance for the manufacturing sector. Prior to January, five months had passed without a gain in industrial production.3

THIS WEEK: Wall Street looks at earnings from Allergan, Dillard’s, Fitbit, Motorola Solutions, and Republic Airways on Monday. January existing home sales figures, the December Case-Shiller home price index, and the Conference Board consumer confidence index appear Tuesday, plus earnings from Avis Budget Group, Cablevision, Cracker Barrel, Dollar Tree, HealthSouth, Home Depot, J.M. Smucker, Macy’s, Office Depot, Papa John’s, Popeye’s, and Toll Bros. Wednesday sees January new home sales numbers and earnings from Chesapeake Energy, Etsy, L Brands, La Quinta Holdings, Lowe’s, NetEase, Sunoco, Target, TJX, and Transocean. Thursday offers reports on initial claims and January capital goods orders, plus earnings from AMC Networks, Baidu, Best Buy, Campbell Soup, Domino’s, Gap, Health Net, Healthways, Icahn Enterprises, iHeart Media, Ingram Micro, Intuit, Kohl’s, Kraft Heinz, Live Nation, Monster Beverage, Pinnacle Foods, Sears Holdings, Palo Alto Networks, and Sprouts. January personal spending figures, the second estimate of Q4 GDP, and the University of Michigan’s final January consumer sentiment index arrive Friday, plus earnings from Berkshire Hathaway, Foot Locker, Hilton Worldwide Holdings, J.C. Penney, KBR, and Sempra Energy.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-5.93
-8.86
+6.46
+4.81
NASDAQ
-10.04
-8.53
+11.79
+9.91
S&P 500
-6.17
-8.57
+8.56
+4.95
REAL YIELD
2/19 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.50%
0.37%
1.25%
2.03%

Sources: wsj.com, bigcharts.com, treasury.gov – 2/19/164,5,6,7

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

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 – cnbc.com/2016/02/19/us-markets.html [2/19/16]
2 – investing.com/economic-calendar/ [2/19/16]
3 – reuters.com/article/us-usa-economy-idUSKCN0VQ1NV [2/17/16]
4 – markets.wsj.com/us [2/19/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F19%2F15&x=0&y=0 [2/19/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F19%2F15&x=0&y=0 [2/19/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F19%2F15&x=0&y=0 [2/19/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F18%2F11&x=0&y=0 [2/19/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F18%2F11&x=0&y=0 [2/19/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F18%2F11&x=0&y=0 [2/19/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F21%2F06&x=0&y=0 [2/19/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F21%2F06&x=0&y=0 [2/19/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F21%2F06&x=0&y=0 [2/19/16]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/19/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/19/16]