Weekly Economic Update – September 28, 2015

WEEKLY QUOTE
“Sometimes life is going to hit you in the head with a brick. Don’t lose faith.”
– Steve Jobs

WEEKLY TIP
How many of us think about saving first, spending second? Most households save or invest whatever is left after monthly expenses. Would our savings (and wealth) grow faster if we saw things the other way around?

WEEKLY RIDDLE
Take a letter out of it, and it stays put and the same; remove all the letters from it and it still stays put and stays the same. What is it?

Last week’s riddle:
Brittany carried a load of wood in a wheelbarrow, yet the wood was neither straight nor crooked. How could this be?

Last week’s answer:
She was carrying a load of sawdust.

A BIT MORE OPTIMISM AS SEPTEMBER ENDS

The University of Michigan’s consumer sentiment index advanced slightly in the past couple of weeks, rising to a final September mark of 87.2 from its initial reading of 85.7. Regardless, this was the index’s poorest final monthly reading since October 2014. It did surpass the expectations of analysts polled by Bloomberg, who expected a final number of 86.5.1

DIFFERENT DIRECTIONS FOR AUGUST HOME SALES

New home buying increased 5.7% during the month of August, and the sales pace was the strongest measured by the Census Bureau since February 2008. This put new home sales up 21.6% year-over-year. On the other hand, National Association of Realtors data showed resales slumping 4.8% last month.2
 
DURABLE GOODS ORDERS RETREAT 2.0%

The August reduction matched the consensus forecast at Briefing.com. Beneath the headline number, core durable goods orders (excluding the transportation category) were flat in August.3

Q2 GROSS DOMESTIC PRODUCT REVISED UP TO 3.9%

This is 0.2% better than the previous estimate from the Bureau of Economic Analysis. Household consumption grew at a 3.6% annual pace in Q2 – double what it was in Q1. Residential construction grew at a 9.3% pace in the quarter, business investment at a 5.2% rate.1

A DOWN WEEK FOR EQUITIES

Last week saw the major U.S. indices pull back. On Friday, the Dow Jones Industrial Average settled at 16314.67, the S&P 500 at 1,931.34 and the Nasdaq Composite at 4,686.50. On the week, the Dow lost 0.43%, the S&P 1.36%, and the Nasdaq 2.92%.4

THIS WEEK: August consumer spending figures arrive Monday along with NAR’s latest pending home sales index. Tuesday, the July Case-Shiller home price index and the Conference Board’s September consumer confidence index appear, along with earnings from Barracuda Networks, Costco, and Diamond Foods. Wednesday brings ADP’s September job-change report and quarterly results from Paychex; also, Federal Reserve chair Janet Yellen speaks at a banking conference in St. Louis. On Thursday, Wall Street will watch September’s ISM factory PMI, the September Challenger job-cut report and the latest initial jobless claims figures. The Labor Department issues its September employment report Friday.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-8.46
-3.72
+10.04
+5.62
NASDAQ
-1.05
+4.92
+19.36
+12.09
S&P 500
-6.20
-1.76
+13.63
+5.89
REAL YIELD
9/25 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.71%
0.50%
0.81%
1.78%

Sources: wsj.com, bigcharts.com, treasury.gov – 9/25/155,6,7,8

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 – bloomberg.com/news/articles/2015-09-25/economy-in-u-s-picked-up-on-consumer-spending-construction [9/25/15]
2 – housingwire.com/articles/35142-new-home-sales-climb-57-in-august [9/24/15]
3 – briefing.com/investor/calendars/economic/2015/09/21-25 [9/25/15]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [9/25/15]
5 – markets.wsj.com/us [9/25/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F25%2F14&x=0&y=0 [9/25/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F25%2F14&x=0&y=0 [9/25/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F25%2F14&x=0&y=0 [9/25/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F24%2F10&x=0&y=0 [9/25/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F24%2F10&x=0&y=0 [9/25/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F24%2F10&x=0&y=0 [9/25/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F26%2F05&x=0&y=0 [9/25/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F26%2F05&x=0&y=0 [9/25/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F26%2F05&x=0&y=0 [9/25/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/25/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/25/15]