Weekly Economic Update – November 28, 2016

WEEKLY QUOTE

“One accurate measurement is worth a thousand expert opinions.” – Grace Hopper

WEEKLY TIP

If you are giving cash gifts to relatives this holiday season, make sure that the gifts do not force you into making financial compromises. In helping others, you should not seriously hurt your own finances.

WEEKLY RIDDLE

A rope ladder dangles over the railing of a boat docked at a lake; its bottom end, 4 inches above the water. One day, the lake waters rise 4 inches. How high off of the water is the rope ladder now?

Last week’s riddle:

Kathryn decides to donate $10 million to charity. After she makes the donation, she becomes a multi-millionaire. How is this possible?

Last week’s answer:

She was a billionaire before making the donation; after donating the $10 million, her net worth fell below $1 billion.

STOCKS SETTLE AT ALL-TIME HIGHS

An abbreviated trading week was also a historic week on Wall Street, as the four key U.S. equity indices all reached new peaks. At Friday’s closing bell, the Russell 2000 settled at a record 1,347.20 after its fifteenth straight day of gains; it was up 2.37% for the week. The Dow advanced 1.47% on the week to a Friday close of 19,152.14. Adding 1.42% in three-and-a-half days, the Nasdaq ended the week at 5,398.92. The S&P 500, which finished Friday up more than 3% since the election, rose 1.40% on the week to 2,213.35.1,2,5

EXISTING HOME SALES RISE, NEW HOME SALES FALL

The National Association of Realtors announced a 2.0% gain for resales in October. Existing home sales have kept their momentum, even with inventory down 4.3% and the median sale price up 6.0% in the past year. According to the Census Bureau, new home sales declined 1.9% in October, but were still up 12.7% year-over-year.3

CONSUMER SENTIMENT IMPROVES

At a final November mark of 93.8, the University of Michigan’s household sentiment index surpassed the consensus forecast of economists polled by MarketWatch, who expected a 92.0 reading. The index’s initial November edition had a reading of 91.6.4

DURABLE GOODS ORDERS RISE 4.8%

October’s gain in capital goods orders was the largest measured by the Department of Commerce in a year. A 94% increase in commercial aircraft orders was a major factor. Business investment rose 0.4% in October.3,4

THIS WEEK: Shoe Carnival and Thor Industries announce earnings on Monday. On Tuesday, the federal government releases its second estimate of Q3 growth, the Conference Board’s November consumer confidence index and the September S&P/Case-Shiller home price index both appear, and Autodesk and Tiffany present Q3 results. Wednesday brings ADP’s November employment change report, October consumer spending figures, the October PCE price index, a new Beige Book from the Federal Reserve, the NAR’s latest pending home sales index, and earnings from American Eagle Outfitters, Guess, and La-Z-Boy. Thursday, investors look at the latest initial jobless claims figures, the November Challenger job-cut report, November’s ISM manufacturing PMI, and earnings from Dollar General, Express, Five Below, Kroger, Land’s End, Sears Holdings, and Smith & Wesson. The November employment report from the Department of Labor arrives Friday, along with earnings from Big Lots and Fred’s.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+9.91
+7.52
+14.10
+5.60
NASDAQ
+7.82
+5.53
+24.23
+11.94
S&P 500
+8.29
+5.96
+18.21
+5.80
REAL YIELD
11/25 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.47%
0.62%
0.05%
2.27%

Sources: wsj.com, bigcharts.com, treasury.gov – 11/25/165,6,7,8

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

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 receivedthis 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. 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 – marketwatch.com/story/dow-poised-for-fresh-record-highs-black-friday-boost-in-view-2016-11-25/ [11/25/16]
2 – google.com/finance?q=INDEXSP:.INX&ei=TqE4WIO4F4eu2AaDyayACQ [11/25/16]
3 – usatoday.com/story/money/business/2016/11/23/economy-manufacturing-durable–goods-jobless-claims/94329992/ [11/23/16]
4 – marketwatch.com/economy-politics/calendars/economic [11/25/16]
5 – markets.wsj.com/us [11/25/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F25%2F15&x=0&y=0 [11/25/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F25%2F15&x=0&y=0 [11/25/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F25%2F15&x=0&y=0 [11/25/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F25%2F11&x=0&y=0 [11/25/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F25%2F11&x=0&y=0 [11/25/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F25%2F11&x=0&y=0 [11/25/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F24%2F06&x=0&y=0 [11/25/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F24%2F06&x=0&y=0 [11/25/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F24%2F06&x=0&y=0 [11/25/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/25/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/25/16]