Weekly Economic Update – June 27, 2016

WEEKLY QUOTE

“Next to trying and winning, the best thing is trying and failing.” – L.M. Montgomery

WEEKLY TIP

Will you soon be using a credit card outside the U.S.? Call the card issuer before your trip, and let your bank know the exact countries and territories you will be visiting. Otherwise, you may run the risk of having your card suspended on suspicion of fraud.

WEEKLY RIDDLE

When is L greater than XL?

Last week’s riddle:

What goes with you wherever you go, often demands an answer, and never asks you a question?

Last week’s answer:

Your cell phone.

BREXIT VOTE BATTERS GLOBAL MARKETS

The world reacted to the news Thursday night that U.K. voters had decided to leave the European Union. Germany’s DAX, France’s CAC-40, and Japan’s Nikkei 225 respectively ended their Friday trading sessions with losses of 6.82%, 8.04%, and 7.92%. Wall Street was not hit as hard, but the Dow fell 3.39% Friday, while the Nasdaq declined 4.12% and the S&P 500 retreated 3.60%.1,2

A GAIN FOR EXISTING HOME SALES IN MAY

Last month, the pace of residential resales accelerated another 1.8%. According to the National Association of Realtors, the latest annual rate of 5.53 million sales marked a 9-year high. Separately, a Census Bureau report showed a 6.0% drop in new home buying in May.3

CONSUMER SENTIMENT GAUGE DECLINES IN JUNE

Displaying a final June reading of 93.5, the University of Michigan’s monthly consumer sentiment index finished the sixth month of the year 1.2 points below its final May mark. A year ago, the index was at 96.1.4

STOCKS END ROCKY TRADING WEEK LOWER

Even with global markets plunging on Friday, weekly losses for the major U.S. indices were not extreme. The Nasdaq declined 1.92% across five days, while the Dow and S&P 500 respectively retreated 1.56% and 1.64%. As the dust settled Friday, the Dow closed the week at 17,399.86; the S&P, at 2,037.30; and the Nasdaq, at 4,707.98. Gold jumped $59.30 Friday to a COMEX close of $1,322.40. Oil settled at $47.64 Friday on the NYMEX.2,5

THIS WEEK: Global markets will react further to the Brexit on Monday; stateside, no major news releases are scheduled. Tuesday, an E.U. leadership summit begins in Brussels; the Conference Board presents its June consumer confidence index; the April Case-Shiller home price index appears; the BEA issues its final estimate of Q1 GDP; and Nike reports quarterly results. Wednesday, Federal Reserve chair Janet Yellen, European Central Bank president Mario Draghi, and Bank of England governor Mark Carney take part in a panel discussion at an ECB forum in Portugal; Wall Street will also pay attention to May pending home sales, May personal spending figures, and earnings news from General Mills, Monsanto, and Pier 1. Thursday, a new initial claims report complements earnings from ConAgra Foods, Constellation Brands, Darden Restaurants, and Paychex. Friday, investors consider ISM’s June U.S. manufacturing PMI and China’s latest factory PMI reading.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-0.14
-3.15
+9.16
+5.83
NASDAQ
-5.98
-8.09
+15.49
+12.19
S&P 500
-0.32
-3.38
+12.12
+6.37
REAL YIELD
6/24 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.15%
0.48%
0.64%
2.64%

Sources: wsj.com, bigcharts.com, treasury.gov – 6/24/162,6,7,8

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 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.solis@lpl.com
E-Mail: robert.medler@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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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 – markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [6/24/16]
2 – markets.wsj.com/us [6/24/16]
3 – investors.com/news/economy/new-home-sales-fall-6-jobless-claims-near-43-year-low/ [6/23/16]
4 – investing.com/economic-calendar/michigan-consumer-sentiment-320 [6/24/16]
5 – cnbc.com/2016/06/24/us-markets.html [6/24/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F24%2F15&x=0&y=0 [6/24/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F24%2F11&x=0&y=0 [6/24/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F23%2F06&x=0&y=0 [6/24/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/24/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/24/16]