Weekly Economic Update – March 14, 2016

WEEKLY QUOTE

“Believe those who are seeking the truth. Doubt those who find it.” – Andre Gide

WEEKLY TIP

If your student will graduate from college with multiple, large student loans with different lenders, consolidating those loans may leave just one payment to one lender at one low interest rate. If your student has multiple but relatively small student loans, just paying them off as quickly as possible is often a better choice than consolidation.

WEEKLY RIDDLE

What mathematical symbol can be put between 5 and 9 to get a number bigger than 5 and smaller than 9?

Last week’s riddle:

You drop a coin into a bottle through its opening. Then, you push a cork into that same bottle opening to seal the opening. How do you get the coin out of the bottle without breaking the bottle or taking out the cork?

Last week’s answer:

Push the cork into the bottle.

STOCKS SETTLE AT 2016 HIGHS

A 5-day gain of 1.10% left the S&P 500 at 2,022.19 at the closing bell Friday. Settling at 17,213.31 Friday afternoon, the Dow Jones Industrial Average rose 1.20% for the week while the Nasdaq Composite advanced 0.67% to end the week at 4,748.47. On March 11, the S&P settled above its moving average for the first time since December 30, and both the S&P and DJIA had their highest closes of the year, reaching peaks unseen since intraday trading on January 4.1

OIL RALLIES, GOLD RETREATS

Light sweet crude closed at $38.50 a barrel Friday on the NYMEX, going +7.2% in five trading days. It was the highest settlement for a most-active contract since December. Gold went -0.9% for the week as appetite for risk grew, settling Friday at $1,259.40 an ounce in COMEX trading.2,3

WALL STREET WATCHES ECB, WAITS ON FED

Economists polled by Reuters widely believe the Federal Reserve will leave interest rates alone next week, but in their consensus estimate, they put the chance of a rate hike by mid-year at 60%. The European Central Bank went in for more easing last week, unexpectedly expanding the scope of its economic stimulus measures and reducing all three of its interest rates.4

BULL MARKET TURNS SEVEN

At 84 months, this bull market is now the third-longest in history, and it could soon surpass the 1949-56 bull, which ended after 85½ months. The current bull market rose an astonishing 68.6% in its first year. It advanced more than 10% in five of its first six years. It has lost ground over the past 12 months, but it has been rebounding.5

THIS WEEK: On Monday, Wall Street considers Q1 earnings from Cintas and Lennar. February’s PPI, February retail sales numbers and earnings from Oracle arrive Tuesday. Wednesday, the Federal Reserve releases its latest policy statement; investors will also evaluate the February CPI, data on February housing starts and industrial output, and earnings announcements from FedEx, Guess?, Jabil Circuit, and Williams-Sonoma. Thursday brings a new initial jobless claims report, plus earnings from Adobe Systems, Aeropostale, Lands’ End, and Michaels Companies. The University of Michigan’s preliminary March consumer sentiment index appears Friday, along with Q4 results from Tiffany.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-1.22

-2.39

+8.58

+5.54

NASDAQ

-5.17

-2.09

+14.97

+10.99

S&P 500

-1.06

-0.88

+11.01

+5.78

REAL YIELD

3/11 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.44%

0.39%

0.96%

2.23%

 

Sources: wsj.com, bigcharts.com, treasury.gov – 3/11/166,7,8,9

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

Bob Medler, CRPC, CMFC, AIF®
LPL Wealth Advisor

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 – cnbc.com/2016/03/11/us-markets.html [3/11/16]
2 – marketwatch.com/story/crude-zigzags-back-above-38-a-barrel-amid-production-freeze-questions-2016-03-11 [3/11/16]
3 – marketwatch.com/story/gold-prices-dull-as-dollar-stocks-oil-gain-2016-03-11/ [3/11/16]
4 – nytimes.com/reuters/2016/03/10/business/10reuters-usa-economy-poll.html [3/10/16]
5 – usatoday.com/story/money/markets/2016/03/08/wall-street-bull-market-turns-7/81438562/ [3/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F9%2F09&x=0&y=0 [3/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F9%2F16&x=0&y=0 [3/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F11%2F15&x=0&y=0 [3/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F11%2F15&x=0&y=0 [3/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F11%2F15&x=0&y=0 [3/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F11%2F11&x=0&y=0 [3/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F11%2F11&x=0&y=0 [3/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F11%2F11&x=0&y=0 [3/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F10%2F06&x=0&y=0 [3/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F10%2F06&x=0&y=0 [3/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F10%2F06&x=0&y=0 [3/11/16]
7 – markets.wsj.com/us [3/11/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/11/16]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/11/16]