Weekly Economic Update – July 13, 2015

WEEKLY QUOTE
“The wisest mind has something yet to learn.”
– George Santayana

WEEKLY TIP
Do you have any idle money around – money parked in an account that is basically forgotten or earning little or no interest? It may be time to explore other options for those dollars. That money could be working harder for you.

WEEKLY RIDDLE
Jacquie and her daughter Amanda walk past a man in a café. Amanda says “Hello, father” – and a split-second later, so does Jacquie. How are they both able to make this remark to him without any confusion or embarrassment?

Last week’s riddle:
What has no arms, legs or form, yet goes up without ever coming down?

Last week’s answer:
Your age.

GREECE GIVES IN, STOCKS RALLY

In an about-face development, the Greek government acceded to the demands of its creditors Thursday night. Prime minister Alexis Tsipras submitted a bailout proposal similar to the one the Greek people had rejected by referendum on July 5, including sales tax hikes, pension spending cuts and debt restructuring. Leaders of the European Union will discuss the new proposal at a Sunday summit. A 3-year, €53.5 billion relief package depends on their approval, and the approval of Greece’s parliament. Wall Street certainly approved the turn of events on Friday, with the S&P 500 rising 1.23%. For the week, the S&P went -0.01% to settle at 2,076.62, the Dow +0.17% t0 reach 17,760.41, and the NASDAQ -0.23% to descend to 4,997.70.1,2

A GAIN FOR THE ISM SERVICES PMI

The Institute for Supply Management’s services sector purchasing manager index rose 0.3 points in May to a mark of 56.0. For the past year, it has averaged a reading of 57.2. By ISM’s barometer, the sector has expanded for 65 straight months.3

YELLEN: 2015 RATE HIKE SEEMS “APPROPRIATE”

Speaking in Cleveland Friday, Federal Reserve chair Janet Yellen said that “it will be appropriate at some point later this year to take the first step to raise the federal funds rate and thus begin normalizing monetary policy.” She noted that the steps to normalization would be data-dependent and gradual, adding that “monetary policy will need to be highly supportive of economic activity for quite some time.”4

CRUDE & GOLD PRICES SINK

West Texas Intermediate crude closed down at $52.74 on the NYMEX Friday after rising more than $1.oo for the session. Gold and silver both lost 0.5% for the week, respectively settling at $1,157.90 and $15.48 on the COMEX Friday.5

THIS WEEK: U.S. markets will react to the outcome of the EU summit Monday; no major news is scheduled stateside. Tuesday, June retail sales figures complement earnings from Fastenal, Johnson & Johnson, JPMorgan Chase, Wells Fargo and Yum! Brands. Wednesday, Fed chair Janet Yellen testifies on monetary policy in Congress; Wall Street also considers a new Fed Beige Book, the June PPI, June industrial output and earnings from Bank of America, BlackRock, Intel, Delta Air Lines, East West Bancorp, Kinder Morgan, Seagate, U.S. Bancorp and Netflix. Thursday brings new initial claims numbers and earnings from BB&T, Blackstone Group, Charles Schwab, Domino’s, eBay, Goldman Sachs, Google, Mattel, Philip Morris, Schlumberger, Citigroup, Sherwin-Williams and UnitedHealth. Friday, earnings from Comerica, GE and Honeywell appear plus the June CPI.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-0.35

+5.00

+14.83

+6.88

NASDAQ

+5.52

+13.68

+25.51

+13.40

S&P 500

+0.86

+5.70

+18.53

+7.03

REAL YIELD

7/10 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.55%

0.27%

1.26%

1.81%

Sources: wsj.com, bigcharts.com, treasury.gov – 7/10/156,7,8,9

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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DISCLOSURES

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 – bloomberg.com/news/articles/2015-07-10/greece-seeks-eu53-5-billion-bailout-as-tsipras-bows-to-demands [7/10/15]

2 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [7/10/15]

3 – instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm [7/6/15]

4 – businessinsider.com/janet-yellen-us-economic-outlook-speech-july-10-2015-7 [7/10/15]

5 – proactiveinvestors.com/companies/news/62360/gold-drops-01-to-1157-wti-little-changed-at-5274-62360.html [7/10/15]

6 – markets.wsj.com/us [7/10/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F10%2F14&x=0&y=0 [7/10/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F10%2F14&x=0&y=0 [7/10/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F10%2F14&x=0&y=0 [7/10/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F9%2F10&x=0&y=0 [7/10/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F9%2F10&x=0&y=0 [7/10/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F9%2F10&x=0&y=0 [7/10/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F11%2F05&x=0&y=0 [7/10/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F11%2F05&x=0&y=0 [7/10/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F11%2F05&x=0&y=0 [7/10/15]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/10/15]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/10/15]