Weekly Economic Update – July 31, 2017

WEEKLY QUOTE

“Time sneaks up on you like a windshield on a bug.” – John Lithgow

WEEKLY TIP

Are you short on retirement savings? One response may be to work longer. Even part-time work could lessen the pressure to draw down your retirement assets.

WEEKLY RIDDLE

They had weight in their stomachs, tall trees on their backs, nails in their ribs, yet feet they lacked. The world saw thousands of them centuries ago. What were they?

Last week’s riddle:

After badly losing an away game, a college football team doesn’t want their coach to come in and yell at them, so they put 1,000 pounds of weights against a locker room door to prevent him from opening it. He comes in and yells at them face-to-face anyway. Why are they unable to keep him from coming through the doorway?

Last week’s answer:

The door opens outward.

HOUSEHOLDS ARE FEELING OPTIMISTIC

Unemployment is at a 16-year low, and the Conference Board’s consumer confidence index is near a 16-year high. It reached 121.1 in July, rising 3.8 points; analysts polled by MarketWatch expected a reading of 116.9. The University of Michigan’s consumer sentiment index rose to 93.4.1,2

HAVE HOME SALES REACHED A PLATEAU?

Last week, the National Association of Realtors announced a 1.8% June retreat for existing home sales. New home buying only advanced 0.8% for June by Census Bureau calculations. Analysts point to tight supply limiting resales and a scarcity of affordably priced new developments discouraging new home shoppers.3

GROWTH PICKED UP IN THE SECOND QUARTER

According to the Bureau of Economic Analysis, the economy expanded at an annual rate of 2.6% in Q2, with the yearly personal spending rate at 2.8%. As it presented its Q2 estimate, the BEA also revised Q1 consumer spending up from 1.1% to 1.9%.2

The DOW LEADS THE WAY ON WALL STREET

Ascending 1.16% in five days, the Dow Industrials closed at 21,830.24 Friday. In contrast, both the S&P 500 and Nasdaq Composite staged minor weekly retreats. The S&P declined 0.02% to 2,472.08; the Nasdaq, 0.20% to 6,374.68.4

THIS WEEK: On Monday, NAR releases its June pending home sales index, and CNA Financial, Loews Corp., Pandora Media, and Papa John’s announce earnings. Tuesday offers earnings from Allstate, Apple, Archer Daniels Midland, Beazer Homes, Big 5 Sporting Goods, Cummins, Denny’s, Extended Stay America, HanesBrands, Herbalife, Pfizer, Phillips 66, Pitney Bowes, Sprint, Under Armour, Unisys, and Xerox, plus June consumer spending figures and ISM’s July factory PMI. A new ADP payrolls report appears Wednesday, along with earnings news from AmeriGas, AutoNation, Choice Hotels, Container Store, Cumulus Media, Energizer Holdings, Exelon, Fitbit, Garmin, Groupon, Humana, Icahn Enterprises, Marathon Oil, Square, Symantec, Take Two Interactive, Tesla, Time Warner, Transocean, and Vulcan Materials. On Thursday, investors review earnings from AMC Networks, Activision Blizzard, Aetna, Allergan, Avon, Berkshire Hathaway, Callaway Golf, Chesapeake Energy, Duke Energy, Fluor, GoPro, Hyatt, iHeartMedia, Kellogg, Kraft Heinz, Motorola, Noble Energy, Parker-Hannifin, RE/MAX Holdings, Shake Shack, TiVo, Viacom, Western Union, Wingstop, Wyndham Worldwide, Yelp, and Yum! Brands, plus new initial claims numbers and ISM’s July services PMI. The Department of Labor’s latest jobs report arrives Friday, along with earnings from Cigna, ITT, Revlon, and Sempra Energy.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +10.46 +18.28 +13.39 +6.46
NASDAQ +18.42 +23.66 +23.10 +14.88
S&P 500 +10.42 +13.92 +15.67 +6.94
REAL YIELD 7/28 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.47% 0.00% -0.61% 2.48%

Sources: wsj.com, bigcharts.com, treasury.gov – 7/28/174,5,6,7

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.

Greg R. Solis
President and CEO

Bob Medler, CRPC®, CMFC®
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@solisweatlh.com
E-Mail: bob@soliswealth.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

The information contained in this email message is being transmitted to and is intended for the use of only the individual(s) to whom it is addressed. If the reader of this message is not the intended recipient, you are hereby advised that any dissemination, distribution or copying of this message is strictly prohibited. If you have received this message in error, please immediately delete.

P.S.  You have my permission to forward this commentary to family, friends, or colleagues.  If you would like us to add them to the list, please reply to this e-mail with their e-mail address and we will ask for their permission to be added.

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.

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. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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 – marketwatch.com/story/consumer-confidence-back-near-16-year-high-2017-07-25 [7/25/17]
2 – investors.com/market-trend/stock-market-today/indexes-mostly-down-gop-health-failure-hurts-this-stock/ [7/28/17]
3 – foxbusiness.com/features/2017/07/26/u-s-new-home-sales-edged-higher-in-june-update.html [7/26/17]
4 – markets.wsj.com/us [7/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F28%2F16&x=0&y=0 [7/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F28%2F16&x=0&y=0 [7/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F28%2F16&x=0&y=0 [7/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F27%2F12&x=0&y=0 [7/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F27%2F12&x=0&y=0 [7/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F27%2F12&x=0&y=0 [7/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F27%2F07&x=0&y=0 [7/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F27%2F07&x=0&y=0 [7/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F27%2F07&x=0&y=0 [7/28/17]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/28/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/28/17]