Weekly Economic Update – November 16, 2015

WEEKLY QUOTE
“It pays to be obvious, especially if you have a reputation for subtlety.”
– Isaac Asimov

WEEKLY TIP
Are your investment allocations still in agreement with your investing goals? An annual review can help you find that out, and determine whether rebalancing is necessary.

WEEKLY RIDDLE
5 letters have I, I start in E and end in Y. Take away my first, third and last letter and the 2 letters left will sound the same as when you started with me. I am a 5-letter word; what word am I?

Last week’s riddle:
When you shop for clothes, XL is always larger than L… but clothing sizes aside, in what numerical context is L larger than XL?

Last week’s answer:
In Roman numerals. The Roman numeral L = 50. However, X placed before L means “ten less” than L, so the Roman numeral XL = 40.

RETAIL PURCHASES UP JUST 0.1% IN OCTOBER

The tiny increase was actually an improvement, as retail sales were flat in both August and September. Gas station sales tailed off 0.9% in October, car sales 0.5%; offsetting those declines, online retail purchases were up 1.4% last month, spending at restaurants and bars up 0.5%. The Commerce Department’s latest report notwithstanding, the National Retail Federation projects holiday season retail sales to rise 3.7% this year to $630.5 billion.1

HOUSEHOLDS THINK POSITIVE

Economists polled by Bloomberg expected the preliminary November University of Michigan consumer sentiment index to rise 2.0 points to 92.0. It surpassed that forecast, reaching 93.1 thanks in large part to consumer expectations of low inflation and larger wage gains in 2016. Twelve months ago, the index was at 88.8.2

PRODUCER PRICE INDEX DECREASES AGAIN

The Labor Department’s barometer of wholesale inflation declined 0.4% in October. September saw the index fall 0.5%. Through October, the Producer Price Index was down 1.6% year-over-year, even though wholesale gasoline prices rose 3.8% last month. Core producer prices have risen but 0.1% in 12 months.1,3

STOCKS RETREAT ON SOFT DATA, LOW OIL PRICES
Negative wholesale inflation, tepid retail sales and light sweet crude ending the week at $40.74 on the NYMEX, its lowest close since August 26 – that was enough to snap Wall Street’s winning streak. The S&P 500 lost 3.63% on the week to fall to 2,023.04 Friday. The Dow (-3.71%) and Nasdaq (-4.26%) made similar descents, wrapping up the week at respective closes of 17,245.24 and 4,927.88.4,5

THIS WEEK: Monday offers quarterly results from Agilent Technologies and Dillard’s. Tuesday, October’s Consumer Price Index and a report on October industrial output complement earnings from Dick’s Sporting Goods, Home Depot, Jack-in-the-Box, La-Z-Boy, TJX and Walmart. Minutes from the October Federal Reserve policy meeting appear on Wednesday, along with October’s housing starts report and earnings from Aramark, Keurig Green Mountain, L Brands, Lowe’s, NetApp, Staples, Target, The Children’s Place and Weibo. Thursday brings the Conference Board’s latest leading indicator index, a new initial claims report and earnings from America’s Car-Mart, Best Buy, Fresh Market, Gap, Intuit, J.M. Smucker, Kirkland’s, Ross, Stein Mart and Williams-Sonoma. Abercrombie & Fitch and Foot Locker report Q3 results on Friday.<

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-3.24
-2.31
+10.82
+6.12
NASDAQ
+4.05
+5.29
+19.14
+12.40
S&P 500
-1.74
-0.80
+13.74
+6.40
REAL YIELD
11/13 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.76%
0.47%
0.71%
2.14%

Sources: wsj.com, bigcharts.com, treasury.gov – 11/13/156,7,8,9

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

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
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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Disclosure

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 – nbcnews.com/business/economy/online-purchases-eating-out-help-october-retail-sales-edge-higher-n462846 [11/13/15]
2 – 247wallst.com/economy/2015/11/13/consumer-sentiment-climbs-again/ [11/13/15]
3 – usnews.com/news/business/articles/2015/11/13/us-producer-prices-drop-in-latest-sign-of-tame-inflation [11/13/15]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [11/13/15]
5 – marketwatch.com/story/oil-settles-lower-down-8-on-week-2015-11-13 [11/13/15]
6 – markets.wsj.com/us [11/13/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F13%2F14&x=0&y=0 [11/13/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F13%2F14&x=0&y=0 [11/13/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F13%2F14&x=0&y=0 [11/13/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F12%2F10&x=0&y=0 [11/13/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F12%2F10&x=0&y=0 [11/13/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F12%2F10&x=0&y=0 [11/13/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F14%2F05&x=0&y=0 [11/13/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F14%2F05&x=0&y=0 [11/13/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F14%2F05&x=0&y=0 [11/13/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/13/15]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/13/15]