Economic Update July 25, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Never harbor grudges; they sour your stomach and do no harm to anyone else.” – Robertson Davies WEEKLY TIP               Some parents spend thousands of dollars each year in support of their children’s athletic pursuits. Reducing such expenses could be wise; the money saved could go toward college tuition or retirement. WEEKLY RIDDLE              Take the number 3 and add another number 3, and you get 6 … but how can you get 8 from a pair of threes?       Last week’s riddle: Can you name three consecutive days without using the words Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, or Sunday?   Last week’s answer: Yesterday, today and tomorrow.           July 25, 2016     GAINS IN HOME BUYING & HOUSING STARTS June brought a 1.1% rise in existing home sales. Analysts, polled by the Wall Street Journal, had forecast a 0.7% decline. In its new report, the National Association of Realtors said 33% of June sales involved first-time buyers, which was a 4-year peak. New Department of Commerce data showed housing starts up 4.8% last month.1    SOME EARLY EARNINGS SEASON NUMBERS According to the latest Zacks Earnings Trend report, 68.9% of 103 S&P 500 companies reporting so far this season have beaten estimates and 56.3% have topped revenue projections. Zacks now forecasts a 3.6% year-over-year decline in earnings for S&P member firms, better than its 6.2% appraisal of two weeks ago.2    A DOWN WEEK FOR OIL & GOLD FUTURES Wrapping up the week at a NYMEX price of $44.19, WTI crude slipped 3.8% across...

Economic Update, July 18, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “The only way most people recognize their limits is by trespassing on them.” – Tom Morris WEEKLY TIP               Young adults who consider debt consolidation should weigh the pros and cons of the idea. Lower monthly payments might free up more cash for saving and investing. Extending a credit card balance for decades, though, may cost a borrower much more in the long run. WEEKLY RIDDLE              Can you name three consecutive days without using the words Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, or Sunday?       Last week’s riddle: At times I’m high and low, I never fly but I can rise, and I can creep between your toes. What am I?   Last week’s answer: The tide.           July 18, 2016     TWO SIGNS OF A STRONGER ECONOMY Retail sales improved 0.6% in June, according to the Commerce Department, and the core gain was 0.7% with auto buying and home improvement purchases factored out. Industrial production rose 0.6% in June, making up for a 0.3% May loss. Both indicators could be taken as hints of solid second-quarter growth.1    CORE INFLATION IS OUTPACING HEADLINE INFLATION In the year ending in June, the headline Consumer Price Index increased just 1.0%. According to the Department of Labor, the average 12-month gain in the past decade is 1.7%. The yearly gain in the core CPI, however, was 2.3% in June; it has averaged 1.9% in the past 10 years. June also saw a 0.5% gain for the Producer Price Index.1,2    SENTIMENT INDEX FALLS 4 POINTS The drop...

Economic Update July 11, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Set up as an ideal the facing of reality as honestly and as cheerfully as possible.” – Karl Menninger WEEKLY TIP               Credit reporting agencies may lower your credit score if you rely heavily on installment-type accounts or loans linked to appliance or home goods retailers, or unsecured personal loans from consumer credit companies. You should pay off such debt as quickly as possible.       WEEKLY RIDDLE              At times I’m high and low, I never fly but I can rise, and I can creep between your toes. What am I?       Last week’s riddle: How can you make a sofa, a motorcycle and a tent liquid?   Last week’s answer: Sell them.           July 11, 2016     A REASSURING JOBS REPORT June was the best month for hiring since October. Employers added 287,000 new jobs to their payrolls last month; analysts polled by Bloomberg forecast a gain of 180,000. The headline unemployment rate rose to 4.9% in the Department of Labor’s latest report, a reflection of more Americans looking for work. The broader U-6 rate, including the underemployed, fell a tenth of a point to 9.6%.1    STRONG SERVICE SECTOR GROWTH IN JUNE Rising 3.6 points, the Institute for Supply Management’s non-manufacturing purchasing manager index came in at a June mark of 56.5. The index was last above 56 in November. Referencing the past relationship between the index and the overall health of the economy in its summary, ISM noted that a 56.5 reading for its services PMI has corresponded with annualized GDP growth...

Economic Update July 4, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Not the power to remember, but its very opposite, the power to forget, is a necessary condition for our existence.” – Sholem Asch WEEKLY TIP               How large should an emergency fund be? Large enough to cover at least three months of expenses in cash. In fact, building your emergency fund to twice that size is a worthy goal.       WEEKLY RIDDLE              How can you make a sofa, a motorcycle, and a tent liquid?       Last week’s riddle: When is L greater than XL?   Last week’s answer: When it is a Roman numeral.           July 4, 2016     SOLID GAINS In CONSUMER SPENDING, CONFIDENCE Personal spending rose 0.4% in May, according to the Department of Commerce, complemented by a 0.2% advance for personal incomes. April’s consumer spending increase was revised up to 1.1%. The Conference Board’s monthly consumer confidence index also improved in June, heading north 5.6 points to a reading of 98.0.1    BEST ISM MANUFACTURING PMI in 16 Months The factory purchasing manager index, maintained by the Institute for Supply Management, reached 53.2 in June, a gain of 1.9 points to its highest reading since February 2015. As recently as February of this year, the PMI was below the 50 level, demarcating growth from contraction. In other news concerning economic output, the federal government revised Q1 GDP up 0.3% to a final estimate of 1.1% last week.1,2    HOUSING CONTRACT ACTIVITY SLOWS The National Association of Realtors reported a dip in pending home sales: they declined 3.7% in May. Turning to...

Economic Update, June 27, 2016

Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Next to trying and winning, the best thing is trying and failing.” – L.M. Montgomery WEEKLY TIP               Will you soon be using a credit card outside the U.S.? Call the card issuer before your trip, and let your bank know the exact countries and territories you will be visiting. Otherwise, you may run the risk of having your card suspended on suspicion of fraud.     WEEKLY RIDDLE              When is L greater than XL?       Last week’s riddle: What goes with you wherever you go, often demands an answer, and never asks you a question?   Last week’s answer: Your cell phone.           June 27, 2016     BREXIT VOTE BATTERS GLOBAL MARKETS The world reacted to the news Thursday night that U.K. voters had decided to leave the European Union. Germany’s DAX, France’s CAC-40, and Japan’s Nikkei 225 respectively ended their Friday trading sessions with losses of 6.82%, 8.04%, and 7.92%. Wall Street was not hit as hard, but the Dow fell 3.39% Friday, while the Nasdaq declined 4.12% and the S&P 500 retreated 3.60%.1,2    A GAIN FOR EXISTING HOME SALES IN MAY Last month, the pace of residential resales accelerated another 1.8%. According to the National Association of Realtors, the latest annual rate of 5.53 million sales marked a 9-year high. Separately, a Census Bureau report showed a 6.0% drop in new home buying in May.3    CONSUMER SENTIMENT GAUGE DECLINES IN JUNE Displaying a final June reading of 93.5, the University of Michigan’s monthly consumer sentiment index finished the sixth month...