Weekly Economic Update – May 1, 2017

WEEKLY QUOTE

“Never suffer youth to be an excuse for inadequacy, nor age and fame to be an excuse for indolence.” – Benjamin Haydon

WEEKLY TIP

Young adults who receive sudden wealth should realize the threats that could end up eroding it: their inexperience handling such large sums of money, their possibly inadequate financial literacy, and the pressure to overspend in our culture. For these reasons, they should chat with a financial professional.

WEEKLY RIDDLE

I have hands, my hands move, but you will never hear me clap. What am I?

Last week’s riddle:

They can hear you, you can touch them, but they will never see you. What are they?

Last week’s answer:

Your ears.

CONSUMER CONFIDENCE DIPS SLIGHTLY

The University of Michigan and Conference Board consumer confidence indices descended a little last month, but remained in great shape. The CB index displayed an April reading of 120.6, down from 124.9 in March. Slipping a point from its initial April mark, the Michigan barometer fell to 97.0.1

LATEST HOUSING DATA IS MOSTLY POSITIVE

New home sales rose 5.8% in March, the Census Bureau noted last week; headline sales were 15.6% improved from a year earlier. The latest 20-city S&P/Case-Shiller home price index (January) showed 5.8% average yearly house price appreciation, up from 5.6% in December. Pending home sales retreated 0.8% in March, the National Association of Realtors reported.1,2

FIRST QUARTER SAW LITTLE ECONOMIC GROWTH

According to the Bureau of Economic Analysis, America’s economy expanded at a pace of 0.7% in Q1, well below the 2.1% growth seen in Q4. Economists polled by MarketWatch had projected a 0.8% Q1 GDP reading.1

NASDAQ POSTS SIXTH WINNING MONTH IN A ROW

The tech benchmark added 2.32% this past week and 2.30% for April, shattering the 6,000 ceiling in the process. Upbeat earnings news and talk of corporate tax cuts also aided the S&P 500 – that index rose 0.91% for April, capping things off with a 1.51% weekly gain. How did the blue chips perform? The Dow advanced 1.34% on the month and 1.91% during April’s last five trading sessions. Friday, the big three settled like so: Dow, 20,940.51; Nasdaq, 6,047.61; S&P, 2,384.20.3,4

THIS WEEK: Monday, investors study March personal spending figures, ISM’s April factory PMI, and earnings from Edison International. Earnings announcements from Altria, Anadarko Petroleum, Apple, ConocoPhillips, Cummins, Gilead Sciences, Hilton Worldwide, MasterCard, Merck, PG&E, Pfizer, and Twenty-First Century Fox appear Tuesday. Wednesday, the Street considers the latest Federal Reserve policy statement, ISM’s March service sector index, the April ADP payrolls report, and earnings from Alibaba, Allstate, Estee Lauder, Facebook, Humana, Kraft Heinz, MetLife, Prudential Financial, Tesla, Time Warner, and Yum! Brands. Thursday offers a new Challenger job-cut report, initial jobless claims numbers, and earnings from Activision Blizzard, Anheuser-Busch, Berkshire Hathaway, Occidental Petroleum, and Viacom. March employment figures are out Friday, along with earnings from Cigna; also, Federal Reserve chair Janet Yellen speaks at Brown University in Rhode Island.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +5.96 +17.44 +11.66 +5.96
NASDAQ +12.34 +25.85 +19.41 +13.65
S&P 500 +6.49 +14.86 +13.98 +5.96
REAL YIELD 4/28 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.37% 0.12% -0.30% 2.25%

Sources: wsj.com, bigcharts.com, treasury.gov – 4/28/174,5,6,7

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.

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. 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. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. 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/economy-politics/calendars/economic [4/28/17]
2 – blogs.barrons.com/incomeinvesting/2017/04/25/new-home-sales-move-into-higher-gear/ [4/28/17]
3 – marketwatch.com/story/us-stocks-face-a-muted-start-even-as-amazon-alphabet-get-set-to-roar-2017-04-28/ [4/28/17]
4 – markets.wsj.com/us [4/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F28%2F16&x=0&y=0 [4/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F28%2F16&x=0&y=0 [4/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F28%2F16&x=0&y=0 [4/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F27%2F12&x=0&y=0 [4/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F27%2F12&x=0&y=0 [4/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F27%2F12&x=0&y=0 [4/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F27%2F07&x=0&y=0 [4/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F27%2F07&x=0&y=0 [4/28/17]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F27%2F07&x=0&y=0 [4/28/17]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/28/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/28/17]