Weekly Economic Update – September 5, 2016

WEEKLY QUOTE

“Realize deeply that the present moment is all you ever have.” – Eckhart Tolle

WEEKLY TIP

Three actions can help you to build a good financial foundation prior to turning 40: funding retirement accounts, paying off credit card debt and creating an emergency fund.

WEEKLY RIDDLE

You use your hand to write; you use me to keep the writing neat and make a point. Every once in a while, you empty me out. What am I?

Last week’s riddle:

Together, an antique dresser and the old baseball cards found within it are valued at $20,000. If the baseball cards are worth $18,000 more than the dresser, how much is the dresser worth?

Last week’s answer:

$1,000. The baseball cards are worth $19,000.

MODEST JOB GROWTH IN AUGUST

Payrolls expanded with 151,000 net new jobs last month, according to the Department of Labor’s latest report. The jobless rate was unchanged at 4.9%, and the U-6 rate tracking underemployment remained at 9.7%. After the release of the data, Wall Street traders saw only a 21% chance of a September interest rate hike by the Federal Reserve and a 55% chance of a rate increase by the end of 2016.1

FACTORY SECTOR CONTRACTS

Taking a surprisingly steep drop, the Institute for Supply Management’s manufacturing purchasing manager index fell down to 49.4 in August, indicating a slowdown in U.S. factory activity. In July, the PMI had a reading of 52.6.2

SOLID CONSUMER CONFIDENCE, SPENDING NUMBERS

The Bureau of Economic Analysis noted a 0.3% rise in personal spending and a 0.4% gain for personal income in July. The Conference Board’s consumer confidence index rose 4.4 points in August to an impressive 101.1 mark.2

PENDING HOME SALES IMPROVE

Housing contract activity increased 1.3% in July, according to the National Association of Realtors, more than offsetting the 0.8% June fall. The May edition of the 20-city S&P/Case-Shiller home price index showed a 5.1% year-over-year gain in home values.2

S&P 500 LOGS WEEKLY GAIN

Across five trading days, the broad benchmark rose 0.50% to 2,179.98. The Nasdaq and Dow posted similar gains in the same interval – the Nasdaq rose 0.59% to 5,249.90; the Dow, 0.52% to 18,491.96. The CBOE VIX – the “fear index” measuring market volatility – closed at just 11.97 Friday, down 12.31% for the week.3

THIS WEEK: Monday is Labor Day, so U.S. financial markets will be closed. ISM’s August service sector PMI arrives Tuesday, plus earnings from Casey’s General Stores, Dave & Buster’s, and TiVo. Wednesday, Apple may unveil the iPhone 7 (and other new products) at its annual fall media event, the Federal Reserve issues a new Beige Book, and Hewlett Packard Enterprise and Valspar announce quarterly results. Thursday, the Department of Labor presents the latest initial claims figures and Barnes & Noble announces quarterly earnings. Friday, Hovnanian and Kroger report earnings.

% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
+6.12
+13.09
+12.90
+6.13
NASDAQ
+4.84
+10.52
+22.33
+13.94
S&P 500
+6.66
+11.86
+17.14
+6.63
REAL YIELD
9/2 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.13%
0.64%
0.00%
2.25%

Sources: wsj.com, bigcharts.com, treasury.gov – 9/2/163,4,5,6

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 – foxbusiness.com/markets/2016/09/02/tepid-august-jobs-report-lack-wage-growth-muddies-rate-hike-picture.html [9/2/16]
2 – investing.com/economic-calendar/ [9/2/16]
3 – markets.wsj.com/us [9/2/16]
4 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F2%2F15&x=0&y=0 [9/2/16]
4 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F2%2F15&x=0&y=0 [9/2/16]
4 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F2%2F15&x=0&y=0 [9/2/16]
4 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F2%2F11&x=0&y=0 [9/2/16]
4 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F2%2F11&x=0&y=0 [9/2/16]
4 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F2%2F11&x=0&y=0 [9/2/16]
4 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F1%2F06&x=0&y=0 [9/2/16]
4 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F1%2F06&x=0&y=0 [9/2/16]
4 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F1%2F06&x=0&y=0 [9/2/16]
5 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/2/16]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/2/16