Weekly Economic Update – October 24, 2016

WEEKLY QUOTE

“Learn to obey before you command.” – Solon

WEEKLY TIP

At what age do you want to retire? 62? 65? 70? Having a specific age in mind will help you solidify and refine your retirement plan.

WEEKLY RIDDLE

Ray pulls out of his driveway and immediately drives at 55 miles per hour, but he is not cited even though a police car sees him. Why?

Last week’s riddle:

I possess a single eye, yet I cannot see. I could, however, hurt you – even if I don’t move. What am I?

Last week’s answer:

A needle.

YEARLY INFLATION INCREASES

Consumer prices rose 1.5% in the 12 months ending in September, the Bureau of Labor Statistics announced last week. That is the highest annualized inflation rate seen since October 2014, up from 1.1% in the year ending in August. The headline Consumer Price Index advanced 0.3% last month; the core CPI 0.1%.1

EXISTING HOME SALES REBOUND

September saw a 3.2% gain in resales – the first improvement since June, according to the National Association of Realtors. First-time buyers made up 34% of home purchasers, a 4-year peak. Separately, the Census Bureau reported a 9.0% plunge for groundbreaking in September, but building permits increased by 6.3%.2,3

OIL PRICES KEEP RISING; STOCKS MAKE MINOR GAINS

Settling Friday at $50.85, light sweet crude added 1.0% for the week. Crude now has a 5-week winning streak going on the NYMEX. All three major indices advanced during the past five trading days. The S&P 500 rose 0.38% to 2,141.16; the Nasdaq Composite, 0.83% to 5,257.40; and the Dow Jones Industrial Average, 0.04% to 18,145.71.4,5

THIS WEEK: Boise Cascade, Kimberly-Clark, Sonic, T-Mobile, and Visa present earnings Monday. Tuesday offers the October Conference Board consumer confidence index, the August Case-Shiller home price index and earnings reports from 3M, Apple, AT&T, Capital One, Caterpillar, Chipotle, Chubb, Eli Lilly, Express Scripts, JetBlue, Freeport-McMoRan, General Motors, Lexmark, Merck, NCR, Pandora, Panera, Peabody Energy, Procter & Gamble, Sherwin-Williams, Sprint, Under Armour, Unisys, and Valero Energy. September new home sales numbers are out Wednesday, plus earnings from Allegiant Air, Avery Dennison, Biogen, Boeing, Cheesecake Factory, Coca-Cola, Comcast, Garmin, Hilton Worldwide, Ingersoll-Rand, La Quinta Holdings, Netgear, Newmont Mining, Norfolk Southern, Northrop Grumman, O’Reilly, Penske, Public Storage, Southwest Airlines, State Street, Tesla, Universal Health Services, W.R. Grace, Waste Management, and Western Digital. Besides a new initial claims report and September pending home sales data, Thursday offers earnings from Aetna, Aflac, Alphabet, Altria, Amazon.com, Amgen, Baidu, Bristol-Myers Squibb, Cabela’s, Colgate-Palmolive, ConocoPhillips, Dow Chemical, Expedia, Ford Motor Co., Genworth Financial, Hanesbrands, Ingram Micro, LinkedIn, Marathon Petroleum, Nokia, Praxair, Sirius XM, Twitter, and Virgin America. On Friday, the initial Q3 GDP estimate and the final October University of Michigan consumer sentiment index arrive, plus earnings from AutoNation, Chevron, Exelon, Exxon Mobil, Hershey, Phillips 66, Weyerhaeuser, and Xerox.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+4.14
+5.69
+10.73
+5.12
NASDAQ
+4.99
+8.62
+19.87
+12.45
S&P 500
+4.76
+6.05
+14.58
+5.64
REAL YIELD
10/21 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.07%
0.59%
0.23%
2.49%

Sources: wsj.com, bigcharts.com, treasury.gov – 10/21/165,6,7,8

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

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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.

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Citations.

1 – tradingeconomics.com/united-states/inflation-cpi [10/21/16]
2 – consumeraffairs.com/news/sales-of-existing-homes-rebound-in-september-102016.html [10/20/16]
3 – cnbc.com/2016/10/19/us-housing-starts-sept-2016.html [10/19/16]
4 – marketwatch.com/story/oil-futures-gain-1-for-the-week-2016-10-21 [10/21/16]
5 – markets.wsj.com/us [10/21/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F21%2F15&x=0&y=0 [10/21/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F21%2F15&x=0&y=0 [10/21/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F21%2F15&x=0&y=0 [10/21/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F21%2F11&x=0&y=0 [10/21/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F21%2F11&x=0&y=0 [10/21/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F21%2F11&x=0&y=0 [10/21/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F20%2F06&x=0&y=0 [10/21/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F20%2F06&x=0&y=0 [10/21/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F20%2F06&x=0&y=0 [10/21/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/21/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/21