Weekly Economic Update – September 7, 2015
WEEKLY QUOTE
“The way we see the problem is the problem.”
– Stephen Covey
WEEKLY TIP
Check your credit report at least annually. You can do it for free. You do not want to be surprised by reporting errors when applying for loans in the future.
WEEKLY RIDDLE
What has a foot on each side and yet another foot in its middle?
Last week’s riddle:
What force and strength cannot get through, it with gentle touch can do. People in many halls would stand were it not in their hand. What is it?
Last week’s answer:
A key.
PACE OF HIRING SLOWED IN AUGUST
Last month, 173,000 Americans found new jobs. Economists polled by MarketWatch forecast 213,000 new hires; analysts surveyed by theWall Street Journal projected 220,000. There were definite silver linings within this disappointing Labor Department report, however. Annualized wage growth increased to 2.2%. June and July job gains were both revised north to 245,000 (and the August hiring total could also potentially be revised upward in the future). Unemployment lessened to 5.1%; the U-6 rate measuring unemployment + underemployment fell to 10.3%, down 1.7% over the past year. Finally, the economy has added jobs for 59 straight months, an all-time record.1,2
ISM INDICES SHOW FURTHER INDUSTRY EXPANSION
Both purchasing manager indices compiled by the Institute for Supply Management remained over the 50 mark for another month in August, though both declined from their July readings. ISM’s service sector PMI came in at 59.0, down from July’s 60.3 mark. The Institute’s manufacturing PMI fell 1.6 points in August to 51.1.1
A SMALL GAIN FOR FACTORY ORDERS
They increased by 0.4% in July according to the Commerce Department. The consensus forecast at MarketWatch was for a 1.0% rise. In June, factory orders were up by 2.2%.1
VOLATILITY CONTINUES ON WALL STREET
Stocks took a turbulent ride last week as investors watched China and interpreted the dip in hiring and the ISM PMIs. Ultimately, the three major indices staged retreats. The Dow settled Friday at 16,102.38, the S&P 500 at 1,921.22, and the Nasdaq at 4,683.92. For the week, the Dow lost 3.25%, the S&P 3.40%, and the Nasdaq 2.99%. Gold lost 1.1% on the week to settle at $1,121.40 Friday on the COMEX. Light sweet crude ended the week at $46.05 on the NYMEX.3,4
THIS WEEK: Monday is Labor Day, so U.S. stock and bond markets will be closed; overseas, China issues a report on its trade surplus. On Tuesday, earnings arrive from Casey’s General Stores, Dave & Buster’s, Korn/Ferry, Men’s Wearhouse, and TiVo. Barnes & Noble, Hovnanian, Krispy Kreme, Pep Boys, and Quiksilver all report earnings on Wednesday. China’s latest CPI and PPI appear Thursday along with U.S. reports on initial jobless claims and July wholesale inventories; in addition, Lululemon Athletica and Restoration Hardware report Q2 results. Friday, investors will look at the August PPI, the initial September University of Michigan consumer sentiment index and Q2 results from Kroger.
|
% CHANGE
|
Y-T-D
|
1-YR CHG
|
5-YR AVG
|
10-YR AVG
|
|
DJIA
|
-9.65
|
-5.67
|
+10.82
|
+5.41
|
|
NASDAQ
|
-1.10
|
+2.67
|
+21.94
|
+11.88
|
|
S&P 500
|
-6.69
|
-3.83
|
+14.79
|
+5.77
|
|
REAL YIELD
|
9/4 RATE
|
1 YR AGO
|
5 YRS AGO
|
10 YRS AGO
|
|
10 YR TIPS
|
0.62%
|
0.28%
|
1.10%
|
1.59%
|
Sources: wsj.com, bigcharts.com, treasury.gov – 9/4/155,6,7,8
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 – marketwatch.com/economy-politics/calendars/economic [9/4/15]
2 – blogs.wsj.com/briefly/2015/09/04/august-jobs-report-the-numbers-2/ [9/4/15]
3 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [9/4/15]
4 – proactiveinvestors.com/companies/news/63384/gold-tallies-11-loss-for-the-week-63384.html [9/4/15]
5 – markets.wsj.com/us [9/4/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F4%2F14&x=0&y=0 [9/4/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F4%2F14&x=0&y=0 [9/4/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F4%2F14&x=0&y=0 [9/4/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F3%2F10&x=0&y=0 [9/4/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F3%2F10&x=0&y=0 [9/4/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F3%2F10&x=0&y=0 [9/4/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F2%2F05&x=0&y=0 [9/4/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F2%2F05&x=0&y=0 [9/4/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F2%2F05&x=0&y=0 [9/4/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/4/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/4/15]
