Weekly Economic Update – January 4, 2016

WEEKLY QUOTE
“To imagine the unimaginable is the highest use of the imagination.” – Cynthia Ozick

WEEKLY TIP
As the year begins, review your estate plan to see if there are any documents that need revising.

WEEKLY RIDDLE
There is an adjective. When you take away the whole from it, some still remains. What adjective is this?

Last week’s riddle:
They are found around the world, attached to ground. They lack mouths, yet they enjoy a “light” meal each day. What are they?

Last week’s answer:
Plants.

HOUSEHOLDS MORE OPTIMISTIC AS 2016 APPROACHES

In December, consumer confidence increased. The Conference Board’s respected index posted a reading of 96.5 in the last month of the year, 3.9 points above its revised November mark. Economists surveyed by Briefing.com expected a reading of just 93.5.1

PENDING HOME SALES INDEX FALLS

The National Association of Realtors reported a 0.9% decrease in housing contract activity in November, in contrast to the 0.5% improvement that economists contacted by the Wall Street Journal had expected. Pending home sales were still up 2.7% annually through November, despite declining for three of the past four months.2

HOME PRICES ADVANCE 5.5% YEAR-OVER-YEAR

This annualized gain in the latest (October) edition of the 20-city S&P/Case-Shiller Home Price Index is the largest recorded since August 2014. Through October, the Case-Shiller had risen 36.4% from its March 2012 low.1,3

S&P 500 POSTS SMALL LOSS FOR 2015

At the close on December 31, the broad benchmark settled at 2,043.94, going -0.21% for the shortened trading week and -0.73% for the year. The Dow ended 2015 at 17,425.03, going -0.18% for the week and -2.23% year-over-year. Of the three major U.S. indices, only the NASDAQ had a positive 2015; after a -0.20% weekly descent to a December 31 close of 5,007.41, its yearly performance was still strongly in the plus column at +5.73%. Oil ended the year at $37.04 on the NYMEX, posting a 30.5% 2015 loss; gold ended 2015 at $1,060.20 on the COMEX, down 10.5% for the year.4,5

THIS WEEK: Institute for Supply Management’s December manufacturing Purchasing Managers Index appears Monday, and markets will also react to China’s latest factory PMI readings. Sonic and SuperValu present earnings on Tuesday. Wall Street will scrutinize the minutes from the December Federal Reserve policy meeting on Wednesday, as well as the December ADP employment change report, the December ISM non-manufacturing PMI and earnings from Monsanto. The December Challenger job-cut report arrives on Thursday, plus new initial claims figures and earnings from Barracuda Networks, Bed Bath & Beyond, Constellation Brands, The Container Store, KB Home, PriceSmart, Ruby Tuesday, WD-40, and Walgreens Boots Alliance. Investors will consider the Labor Department’s December jobs report on Friday.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-2.23
-2.23
+10.10
+6.26
NASDAQ
+5.73
+5.73
+17.75
+12.71
S&P 500
-0.73
-0.73
+12.50
+6.37
REAL YIELD
12/31 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.73%
0.49%
1.00%
2.06%

Sources: wsj.com, bigcharts.com, treasury.gov – 12/31/155,6,7,8

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.

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 – briefing.com/investor/calendars/economic/2015/12/28-01 [12/30/15]
2 – foxbusiness.com/economy-policy/2015/12/30/pending-home-sales-post-unexpected-drop-in-november/ [12/30/15]
3 – marketwatch.com/story/double-digit-home-price-gains-continue-in-some-cities-spcase-shiller-says-2015-12-29 [12/29/15]
4 – markets.wsj.com/us [12/24/15, 12/31/15]
5 – schaeffersresearch.com/content/ezines/2015/12/31/s-p-dow-jones-industrial-average-snap-annual-winning-streaks [12/31/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F31%2F10&x=0&y=0 [12/31/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F31%2F10&x=0&y=0 [12/31/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F31%2F10&x=0&y=0 [12/31/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F30%2F05&x=0&y=0 [12/31/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F30%2F05&x=0&y=0 [12/31/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F30%2F05&x=0&y=0 [12/31/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/31/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/31/15]