Weekly Economic Update – July 2, 2018

INCOME AND SPENDING RISE, ALONG WITH CORE INFLATION

According to the latest monthly Department of Commerce snapshot, personal incomes improved 0.4% in May. Personal spending, however, advanced just 0.2% (half the gain forecast by economists polled by Reuters) and was actually flat when adjusted for inflation. May also brought the sixth straight 0.2% monthly increase for the core PCE price index, which the Federal Reserve uses as its inflation yardstick. The core PCE was up 2.0% year-over-year through May, reaching the central bank’s annualized inflation target for the first time in more than six years.1

CONSUMER CONFIDENCE GAUGES SHOW JUNE DECLINES

The University of Michigan consumer sentiment index and the Conference Board consumer confidence index both came in lower for June. The UMich index dipped 1.1 points from its previous reading to a final June mark of 98.2; meanwhile, the CB’s gauge dipped 2.4 points to a still-impressive 126.4.2

New Home SALES JUMP 6.7%

In part, this May gain can be credited to a 17.9% surge in the South, which left new home buying in that region at its best annual pace in 11 years. The Census Bureau also noted that the median new home sale price fell 3.3% across the 12 months ending in May.3

A LOSING WEEK, BUT A WINNING QUARTER

All three of the major Wall Street indices retreated last week. The S&P 500 lost 1.33%; the Nasdaq Composite, 2.37%; the Dow Jones Industrial Average, 1.26%. Friday’s settlements: S&P, 2,718.37; Nasdaq, 7,510.30; Dow, 24,271.41. This data aside, all three benchmarks were in the green in the second quarter – the S&P advanced 2.93%; the Nasdaq, an impressive 6.33%; the Dow, 0.70%.4,5

TIP OF THE WEEK

Are you concerned about your elderly parent’s ability to manage financial matters? Consider accompanying your mom or dad when they meet with their financial professional or CPA. You may gain some insight.

THIS WEEK

Monday, the Institute for Supply Management releases its June manufacturing PMI. | Nothing major is scheduled for Tuesday. | Wednesday is July 4th; U.S. financial markets are closed for the holiday. | Minutes from the Federal Reserve’s June policy meeting appear Thursday, in addition to the latest initial claims numbers, the June Challenger job-cut report, the June ADP payrolls report, and a new ISM service sector PMI. | The Department of Labor presents its June employment report Friday.

QUOTE OF THE WEEK

“Age is mind over matter. If you don’t mind, it doesn’t matter.” – SATCHEL PAIGE

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -1.81 14.02 12.56 11.38
NASDAQ 8.79 22.23 24.14 22.75
S&P 500 1.67 12.34 13.85 11.24
REAL YIELD (%) 6/29 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.74 0.55 0.53 1.48

Sources: wsj.com, bigcharts.com, treasury.gov – 6/29/184,6,7,8

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.

THE WEEKLY RIDDLE

You see them every day, but never together. They appear everywhere, but never at the same time. What are they?

LAST WEEK’S RIDDLE:

You have three coins that add up to $0.31. Two of them are not quarters. What kind of coins do you have?

ANSWER:
A penny, a nickel, and a quarter.

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@soliswealth.com
E-Mail: bob@soliswealth.com
CA Insurance License #0795867 & 0C05523

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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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.

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CITATIONS:

1 – reuters.com/article/usa-economy/wrapup-1-u-s-core-pce-price-index-hits-2-0-percent-spending-slows-idUSL1N1TU1BT [6/29/18]
2 – marketwatch.com/economy-politics/calendars/economic [6/29/18]
3 – bloomberg.com/news/articles/2018-06-25/u-s-new-home-sales-climb-to-six-month-high-on-surge-in-south [6/25/18]
4 – markets.wsj.com/us [6/29/18]
5 – quotes.wsj.com/index/SPX [6/29/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F29%2F17&x=0&y=0 [6/29/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F29%2F17&x=0&y=0 [6/29/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F29%2F17&x=0&y=0 [6/29/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F28%2F13&x=0&y=0 [6/29/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F28%2F13&x=0&y=0 [6/29/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F28%2F13&x=0&y=0 [6/29/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F30%2F08&x=0&y=0 [6/29/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F30%2F08&x=0&y=0 [6/29/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F30%2F08&x=0&y=0 [6/29/18]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/29/18]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/29/18]