Weekly Economic Update – January 11, 2016

WEEKLY QUOTE
“No one is useless in this world who lightens the burdens of another.” – Charles Dickens

WEEKLY TIP
Try to contribute the maximum amount to your IRA(s) as early as you can this year, rather than waiting until the April deadline. By doing so, you give those dollars a little more time to potentially grow and compound.

WEEKLY RIDDLE
A man and a woman wearing very expensive outfits manage, without using wheels or any form of assistance, to push a 6-ton object entirely through their own physical effort. Under what circumstances are they able to do this?

Last week’s riddle:
There is an adjective. When you take away the whole from it, some still remains. What adjective is this?

Last week’s answer:
Wholesome.

CAN STOCKS REGAIN THEIR FOOTING THIS WEEK?

Investors hope so after a very rough start to 2016. Declining oil prices and disappointing manufacturing data in both the U.S. and China helped trigger a global selloff: the major equity indices in Europe and Asia fell between 5-9% last week with our benchmarks following suit. The Dow Jones Industrial Average lost 6.19% in five days to 16,346.45, paralleled by a 6.13% fall for the S&P 500 to 1,922.03 and a 7.27% descent for the Nasdaq Composite to 4,643.60. The week ended with the S&P 9.8% below its May 2015 peak, and with Wall Street hoping for some stability and a decent Q4 earnings season.1,2

292,000 NEW HIRES IN DECEMBER

The Labor Department’s latest employment report affirmed the durability of the U.S. economy. Last month’s impressive payroll growth was complemented by upward revisions to hiring totals for October (307,000) and November (252,000). Economists surveyed by the Wall Street Journal had expected 210,000 new jobs in December. The U-3 and U-6 jobless rates remained at 5.0% and 9.9% last month. Year-over-year wage growth rose to 2.5%.3

FACTORY SECTOR CONTRACTS FOR ANOTHER MONTH

In December, the Institute for Supply Management’s manufacturing Purchasing Managers Index remained under 50, slipping 0.4 points lower to a reading of 48.2. ISM’s service sector PMI declined 0.6 points last month, but still showed strong sector growth at 55.3.4

GOLD PRICES CLIMB, OIL PRICES SLIDE

Rallying in the flight to safety that occurred last week, COMEX gold settled Friday at 1,097.90. The yellow metal gained 3.6% in five trading days. NYMEX crude ended the week at its lowest close since 2005 – just $33.16, a price resulting from a 10.0% five-day decline.5

THIS WEEK: Earnings season starts Monday evening with Q4 results from Alcoa. Nothing major is slated for Tuesday. Wednesday, a new Federal Reserve Beige Book appears, plus Q4 results from SuperValu. Earnings from Intel, JPMorgan Chase, and Rocky Mountain Chocolate Factory arrive Thursday. Friday offers earnings from BlackRock, Citigroup, Fastenal, PNC Financial Services, Wells Fargo, Regions Financial, and U.S. Bancorp, the initial January University of Michigan household sentiment index, the December PPI, and reports on December industrial production and retail sales.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-6.19
-8.72
+8.00
+4.84
NASDAQ
-7.27
-1.95
+14.36
+10.03
S&P 500
-6.13
-6.79
+10.23
+4.90
REAL YIELD
1/8 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.65%
0.41%
0.98%
2.05%

Sources: investing.com, bigcharts.com, treasury.gov – 1/8/161,6,7,8

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

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.

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 – investing.com/indices/major-indices [1/8/16]
2 – bloomberg.com/news/articles/2016-01-08/u-s-index-futures-signal-rebound-as-yuan-fixing-soothes-nerves [1/8/16]
3 – news.morningstar.com/all/dow-jones/us-markets/201601085057/us-job-market-closed-2016-on-strong-note.aspx [1/8/16]
4 – briefing.com/investor/calendars/economic/2016/01/04-08 [1/8/16]
5 – 247wallst.com/investing/2016/01/08/the-4-stocks-that-weighed-on-the-djia-friday-2/ [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F8%2F15&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F8%2F15&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F8%2F15&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F7%2F11&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F7%2F11&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F7%2F11&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F9%2F06&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F9%2F06&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F9%2F06&x=0&y=0 [1/8/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/8/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/8/16]