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Weekly Economic Update August 14, 2017

Weekly Economic Update

Provided by TechGirl Financial

TAME INFLATION PERSISTS

Can the Federal Reserve justify another interest rate hike in the second half of 2017? Given weak inflation pressure, maybe not. The central bank has set a 2% yearly inflation target, but the Consumer Price Index rose only 0.1% in July, resulting in a 1.7% year-over-year gain. Core consumer prices rose 0.1% for a fourth consecutive month in July, so annualized core inflation was also at 1.7%. The Producer Price Index fell 0.1% last month; analysts polled by Briefing.com expected a 0.2% rise.1,2

 

 

ANALYSIS: EARNINGS GROW AT A 10% PACE

More than 90% of companies in the S&P 500 have now reported second-quarter results. FactSet, the respected financial analytics firm, now projects a blended earnings growth rate of 10.2% for the S&P 500 for the second quarter, along a with 5.1% blended sales growth rate. S&P component firms generating less than 50% of their sales outside the U.S., however, are set to record 14.0% blended earnings growth and 6.0% blended revenue growth.3

 

 

THE PRICE OF GOLD RISES

At Friday’s close, the yellow metal hit a 2-month high of $1,294.00 on the COMEX as investors looked away from equities. Gold gained 2.3% on the week.4

 

TURBULENCE FOR WALL STREET

Diplomatic tensions sent stocks lower last week. Across August 7-11, the Dow Jones Industrial Average declined 1.06% to 21,858.32; the S&P 500, 1.43% to 2,441.32; the Nasdaq Composite, 1.50% to 6,256.56. Volatility certainly came back: the CBOE VIX jumped 53.44% to end the week at 15.39.5

 

THIS WEEK

On Monday, Cumulus Media and Sysco report quarterly results. Tuesday brings July retail sales numbers and earnings from Advance Auto Parts, Agilent, Coach, Dick’s Sporting Goods, Home Depot, TJX, and Urban Outfitters. On Wednesday, minutes from the July Federal Reserve policy meeting appear; Wall Street will also interpret a report on July housing starts and building permits and earnings news from Cisco, L Brands, NetApp, Stein Mart, and Target. Fresh reports on initial jobless claims and industrial production roll in Thursday, complemented by earnings from Alibaba Group, America’s Car-Mart, Applied Materials, Bon-Ton Stores, Gap, Ross Stores, Sportsman’s Warehouse, Stage Stores, and Walmart. Friday, investors consider earnings from Deere & Co. and Estee Lauder and the preliminary August consumer sentiment index from the University of Michigan.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+10.60

+17.43

+13.10

+6.51

NASDAQ

+16.23

+19.66

+21.42

+14.58

S&P 500

+9.04

+11.69

+14.73

+6.79

REAL YIELD

8/11 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.40%

0.10%

-0.60%

2.56%

 

Sources: wsj.com, bigcharts.com, treasury.gov – 8/11/175,6,7,8

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.

 

WEEKLY RIDDLE:

Shake me, and I’ll do what you want, but first you must extract me from the earth. I may be on the tip of your tongue and over your shoulder. What am I?

LAST WEEK’S RIDDLE:

What is the only type of “worm” that will never risk ending up on a hook?

LAST WEEK’S ANSWER:

A bookworm.

 

«Kim Gaxiola»

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. Please feel free to forward this article to family, friends or colleagues. If you would like us to add them to our distribution list, please reply with their address. We will contact them first and request their permission to add them to our list.
Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment advisory services offered through Cambridge Investment Research Advisors, a Registered Investment Advisor. TechGirl Financial and Cambridge Investment Research, Inc., are not affiliated companies.
Gaxiola Financial Group | 305 Vineyard Town Center #369 | Morgan Hill, CA 95037
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purposeof 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. 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. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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 – reuters.com/article/us-usa-economy-inflation-idUSKBN1AR19S [8/11/17]

2 – briefing.com/investor/calendars/economic/2017/08/07-11 [8/11/17]

3 – insight.factset.com/sp-500-companies-with-more-global-exposure-reported-higher-earnings-growth-in-q2 [8/11/17]

4 – marketwatch.com/story/gold-marks-highest-finish-since-early-june-up-more-than-2-for-the-week-2017-08-11 [8/11/17]

5 – markets.wsj.com/us [8/11/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F11%2F16&x=0&y=0 [8/11/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F11%2F16&x=0&y=0 [8/11/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F11%2F16&x=0&y=0 [8/11/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F10%2F12&x=0&y=0 [8/11/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F10%2F12&x=0&y=0 [8/11/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F10%2F12&x=0&y=0 [8/11/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F10%2F07&x=0&y=0 [8/11/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F10%2F07&x=0&y=0 [8/11/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F10%2F07&x=0&y=0 [8/11/17]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/11/17]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/11/17]

 

Weekly Economic Update August 20, 2013

Weekly Economic Update August 20, 2013

Provided by Kim Gaxiola

CONSUMER PRICES RISE 0.2% IN JULY

That was exactly the increase that analysts surveyed by Briefing.com expected, and it was a relief after the 0.5% rise in the Consumer Price Index for June. As for July’s Producer Price Index, it was flat – a welcome contrast to June’s 0.8% jump.1

WEEKLY QUOTE

“If you are not criticized, you may not be doing much.”

– Donald Rumsfeld

 

 

RETAIL SALES IMPROVE

July didn’t see as much car and truck buying as in spring, so the gain was 0.2% compared to 0.5% in May and 0.6% in June. The impressive news was the 0.5% rise in core retail sales (excluding auto, gas and construction purchases). That particular indicator hadn’t been so positive since December.2

WEEKLY TIP

Sometimes a sector or industry is touted as the “wave of the future” or the next hot trend. Beware of shifting your investment mix in response to hype or headlines – you may end up with a less diversified portfolio and greater exposure to risk.

 

 

HOUSEHOLD SENTIMENT SLIPS

Analysts polled by Briefing.com expected August’s preliminary University of Michigan consumer sentiment index to be unchanged from the final July reading of 85.1. Instead, it dropped to 80.0 – a 4-month low.1,3,4

 

 

RESIDENTIAL CONSTRUCTION INCREASES

Housing starts were up 5.9% in July, according to the Commerce Department; building permits rose 2.7% last month. Both increases were in line with the estimates of analysts surveyed by Reuters.4

 

 

A 2-WEEK LOSING STREAK ON THE STREET

Shares fell during a week in which 10-year Treasury yields hit a 2-year peak of 2.86%. The S&P 500 (-2.10% to 1,655.83), Dow (-2.23% to 15,081.47) and NASDAQ (-1.57% to 3,602.78) all pulled back. The Dow suffered its poorest week of 2013.3

THIS WEEK: Urban Outfitters announces Q2 results on Monday. Tuesday, Dick’s Sporting Goods, Medtronic, BHP Billiton, Home Depot, Best Buy, TJX, Barnes & Noble, JCPenney, Saks, Analog Devices and La-Z- Boy come out with earnings. Wednesday, the July 31 FOMC minutes will be released, and NAR comes out with July existing home sales numbers; earnings arrive from Target, JM Smucker, Lowe’s, Staples, American Eagle, Toll Brothers, Hewlett-Packard and L Brands. Thursday, we get a new FHFA Housing Price Index, the Conference Board’s July index of leading indicators, new initial jobless claims figures, and earnings from Abercrombie & Fitch, Gold Fields, Hormel Foods, Dollar Tree, Gamestop, Sears, Autodesk, Gap, Marvell, Ross Stores, Aeropostale and Pandora. On Friday, quarterly results from Foot Locker and Ann complement July new home sales figures.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+15.09

+13.82

+5.87

+6.18

NASDAQ

+19.32

+17.65

+9.38

+11.17

S&P 500

+16.10

+16.98

+5.51

+6.71

REAL YIELD

8/16 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.68%

-0.42%

1.66%

2.36%

Sources: cnbc.com, bigcharts.com, treasury.gov – 8/16/133,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.

These returns do not include dividends.

WEEKLY RIDDLE – There are three cups of flour on a counter and you take one away. How many cups of flour do you have now?

Last week’s riddle – A cat falls into a hole 14.5′ deep. The cat can jump 3′ high, but she slides back 1′ with each jump. How many jumps does it take her to get out of the hole?

Last week’s answer – Every 3′ jump accompanied by a 1′ slide equals jumps of 2′ high; at that rate, the cat’s seventh jump, starting at 12′, will put her 15′ above the bottom of the hole and offer her an escape.

 

 

Kim Gaxiola may be reached at (800) 584.3652 or kim@gaxiolafinancialgroup.com or www.techgirlfinancial.com.
TechGirl Financial is a part of Gaxiola Financial Group. Registered representative, securities offered through Cambridge Investment Research, Inc., broker-dealer, member FINRA/SIPC. Investment advisor representative, Cambridge Investment Research Advisors, Inc., a registered investment advisor. Cambridge and Gaxiola Financial Group are not affiliated.
Gaxiola Financial Group | 305 Vineyard Town Center #369 | Morgan Hill, CA 95037

 

1 – briefing.com/investor/calendars/economic/2013/08/12-16 [8/16/13]
2 – nytimes.com/2013/08/14/business/economy/july-retail-sales-rose-0-2-despite-a-drop-in-auto-sales.html [8/14/13]
3 – tinyurl.com/l27dgrz [8/16/13]
4 – reuters.com/article/2013/08/16/us-usa-economy-idUSBRE97E0KS20130816 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F16%2F12&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F16%2F12&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F16%2F12&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F15%2F08&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F15%2F08&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F15%2F08&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F15%2F03&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F15%2F03&x=0&y=0 [8/16/13]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F15%2F03&x=0&y=0 [8/16/13]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/16/13]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/16/13]

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