Weekly Economic Update – February 6, 2017

WEEKLY QUOTE

“Achievement is largely the product of steadily raising one’s levels of aspiration and expectation.” – Jack Nicklaus

WEEKLY TIP

Be sure to study your potential Medicare choices in the years before you turn 65. Evaluate whether you should go with original Medicare (and Part D coverage) or a Part C plan.

WEEKLY RIDDLE

It doesn’t have eyes, but once it held two. It once held thoughts, but is now empty. What could it be?

Last week’s riddle:

Double S, double P, it has four Is and not one C. What oft-seen 11-letter word is this?

Last week’s answer:

Mississippi.

POSITIVES & NEGATIVES IN JANUARY’S JOB DATA

The Department of Labor’s latest jobs report showed 227,000 net new hires last month. Unfortunately, wages grew just 0.1% in January as the headline jobless rate rose slightly to 4.8%. The U-6 rate, counting the underemployed, rose 0.2% to 9.4%.1

STRONG CONSUMER CONFIDENCE & SPENDING

While the Conference Board’s monthly consumer confidence index declined 1.5 points in January, it remained at a high level with a 111.8 reading. Personal spending improved 0.5% in December, with personal incomes up 0.3%.2

ISM INDICES SHOW FURTHER SECTOR EXPANSION

The Institute for Supply Management’s purchasing manager indices were at high levels in January. ISM’s factory index gained 1.5 points to 56.0. Its service sector gauge ticked down 0.1 points to 56.5, but that still signaled solid growth.3

DODD-FRANK ACT FACES A REVIEW

Through an executive order issued Friday, President Donald Trump authorized a review of this law aimed at regulating activities of big banks. According to the New York Times, the directive also calls for major sections of Dodd-Frank to be revised.4

MINOR PROGRESS FOR THE S&P 500

The Federal Reserve stood pat on interest rates, bank shares rose on the Dodd-Frank news, and January hiring totals exceeded forecasts. These developments helped stocks make small weekly gains. In five days, the S&P 500 rose 0.12% to 2,297.42, and the Nasdaq 0.11%, to 5,666.77. The Dow lost 0.11% to settle at 20,071.46 Friday.5

THIS WEEK: CNA Financial, Hasbro, Loews Corp., Sysco, Tesoro, 21st Century Fox, and Tyson Foods announce earnings Monday. Tuesday’s earnings roll call features results from Akamai, Aramark, Archer Daniels Midland, Buffalo Wild Wings, Container Store, General Motors, Genworth Financial, Gilead Sciences, Lennox, Michael Kors, Mosaic, NETGEAR, O’Reilly, Panera Bread, Penske, Spirit Airlines, Take-Two Interactive, Vulcan Materials, and Walt Disney Co. Wednesday, earnings emerge from Alaska Air, Allergan, Exelon, GlaxoSmithKline, Goodyear, Humana, Prudential Financial, Time Warner, W.R. Grace, and Whole Foods. New initial claims numbers arrive Thursday, plus earnings from Activision Blizzard, Advance Auto Parts, Beazer, Coca-Cola, Cummins, CVS Health, Dunkin’ Brands, Expedia, Gannett, Kellogg, Kemper, NCR, Nvidia, Occidental Petroleum, Pandora, Skechers, Twitter, Viacom, Western Union, Yelp, Yum! Brands, and Zynga. Friday, the University of Michigan’s latest household sentiment index appears, plus Q4 results from CBRE Group.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+1.56
+22.86
+11.21
+5.86
NASDAQ
+5.27
+25.81
+19.01
+12.89
S&P 500
+2.62
+20.12
+14.16
+5.86
REAL YIELD
2/3 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.44%
0.50%
-0.21%
     2.42%
Sources: wsj.com, bigcharts.com, treasury.gov – 2/3/17 5,6,7,8

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

 

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 – investopedia.com/news/strong-january-jobs-report-wage-growth-still-soft/ [2/3/17]
2 – investing.com/economic-calendar/ [2/3/17]
3 – instituteforsupplymanagement.org/ismreport/nonmfgrob.cfm [2/3/17]
4 – nytimes.com/2017/02/03/business/dealbook/trump-congress-financial-regulations.html [2/3/17]
5 – markets.wsj.com/us [2/3/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F3%2F16&x=0&y=0 [2/3/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F3%2F16&x=0&y=0 [2/3/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F3%2F16&x=0&y=0 [2/3/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F3%2F12&x=0&y=0 [2/3/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F3%2F12&x=0&y=0 [2/3/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F3%2F12&x=0&y=0 [2/3/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F2%2F07&x=0&y=0 [2/3/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F2%2F07&x=0&y=0 [2/3/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F2%2F07&x=0&y=0 [2/3/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/3/17]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/3/17]