Weekly Economic Update – October 12, 2015

WEEKLY QUOTE
“True originality consists not in a new manner but in a new vision.”
– Edith Wharton

WEEKLY TIP
If you are divorced and currently single, but the marriage lasted 10 years or longer, you may be eligible to collect spousal benefits from Social Security after you and your former spouse both turn 62 – even if they’ve remarried. Visit ssa.gov to learn more.

WEEKLY RIDDLE
What has hundreds or even thousands of ears but hears absolutely nothing?

Last week’s riddle:
What wintry thing flies as it is born, lies when alive, and runs when dead?

Last week’s answer:
A snowflake.

SEPTEMBER FED MINUTES SHOW CAUTION

Minutes from last month’s Federal Open Market Committee meeting provided a bit more insight into the Federal Reserve’s decision not to tighten monetary policy in September. Fed officials opted to “wait for additional information” before making a move, noting that “recent global economic and financial developments may have increased the downside risks to economic activity somewhat.” Even so, most FOMC members thought it appropriate to raise rates “before the end of the year”, believing that slowing economies elsewhere had not “materially altered” the economic outlook for America.1

ISM SERVICES INDEX FALLS SHORT OF EXPECTATIONS

According to the Institute for Supply Management, the U.S. service sector grew at a solid pace last month – the September reading for ISM’s non-manufacturing purchasing manager index was 56.9. Still, that was down from 59.0 in August. Analysts polled by Briefing.com expected a September reading of 58.0.2

WTI CRUDE, GOLD BOTH RALLY

Oil closed at $49.63 a barrel on the NYMEX Friday, gaining 9.0% in five days. A 1.0% advance on Friday took gold to a Friday COMEX settlement of $1,155.90 an ounce – its highest close since August. For the week, the yellow metal gained 1.7%.3

DOVISH FED STANCE HELPS STOCKS JUMP

The bulls certainly came back to Wall Street last week: the S&P 500 had its best five days in some time, rising 3.26% to a Friday close of 2,014.89. Across October 5-9, tech shares rallied to send the Nasdaq 2.61% higher to 4,830.47. The Dow rose 3.72% to 17,084.49 in that time frame.4

THIS WEEK: Monday is Columbus Day, a federal holiday; the stock market will be open, but the bond market will be closed. On Tuesday, eBay, Fastenal, Intel, Johnson & Johnson, JPMorgan Chase and Kinder Morgan all report earnings. Wednesday offers earnings from Bank of America, BlackRock, Delta Air Lines, Netflix and Wells Fargo, along with a new Federal Reserve Beige Book, September’s PPI and September retail sales numbers. The latest initial claims report and the September CPI come out Thursday, plus earnings from BB&T, Blackstone Group, Charles Schwab, Citigroup, First Republic, Goldman Sachs, Mattel, Philip Morris, Schlumberger, U.S. Bancorp, UnitedHealth, WD-40 and Winnebago. On Friday, earnings from Comerica, General Electric, Honeywell International, Progressive and SunTrust Banks arrive, plus October’s initial University of Michigan consumer sentiment index and a report on September industrial output.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-4.14
+2.55
+11.04
+6.69
NASDAQ
+1.99
+10.33
+20.22
+13.24
S&P 500
-2.14
+4.49
+14.59
+6.97
REAL YIELD
10/9 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.58%
0.37%
0.45%
1.92%

Sources: wsj.com, bigcharts.com, treasury.gov – 10/9/155,6,7,8

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

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 – cnbc.com/2015/10/08/fed-minutes-members-worried-about-slower-global-growth.html [10/8/15]
2 – briefing.com/investor/calendars/economic/2015/10/05-09 [10/9/15]
3 – 247wallst.com/investing/2015/10/09/the-4-stocks-that-lifted-the-djia-on-friday-5/ [10/9/15]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [10/9/15]
5 – markets.wsj.com/us [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F9%2F14&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F9%2F14&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F9%2F14&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F8%2F10&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F8%2F10&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F8%2F10&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F10%2F05&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F10%2F05&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F10%2F05&x=0&y=0 [10/9/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/9/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/9/15]