Economic Update, August 14, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “We are what we pretend to be, so we must be careful what we pretend to be.” – Kurt Vonnegut, Jr. WEEKLY TIP               The investment markets experience cycles, and the major indices inevitably see downturns at some point. If you are focused on long-term performance, the good news is that the markets have the potential to rebound in reasonable time. If your portfolio is diversified, that may provide you with some insulation in a correction. 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.           August 14, 2017     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...

Economic Update, August 7, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Whatever you are by nature, keep to it; never desert your line of talent. Be what nature intended you for and you will succeed.” – Sydney Smith WEEKLY TIP               If you are in your twenties, saving should be your top financial goal: saving for emergencies, for investment, and for retirement. WEEKLY RIDDLE              What is the only type of “worm” that will never risk ending up on a hook?         Last week’s riddle: They had weight in their stomachs, tall trees on their backs, nails in their ribs, yet feet they lacked. The world saw thousands of them centuries ago. What were they?        Last week’s answer: Sailing ships.           August 7, 2017     LATEST JOBS REPORT BRINGS GOOD NEWS U.S. payrolls swelled with 209,000 net new workers in July, according to the Department of Labor. That beat the 183,000 estimate by analysts surveyed by Reuters. About 53,000 of the hires were at restaurants and bars, with another 49,000 in the professional and business services category. While yearly wage growth remained at 2.5%, the headline jobless rate ticked back down to 4.3%. The U-6 rate (which includes the underemployed) stayed at 8.6%.1   A MEAGER GAIN IN CONSUMER SPENDING The 0.1% June advance reported by the Department of Commerce matched the (low) expectations of economists surveyed by MarketWatch. Consumer incomes were flat in June; the same group of forecasters thought they would improve 0.3%. Personal spending had increased 0.2% in May, with income up 0.3%.2     ISM PMIS SHOW CONTINUED BUSINESS Growth...

Economic Update, July 31, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     “Time sneaks up on you like a windshield on a bug.” – John Lithgow WEEKLY TIP               Are you short on retirement savings? One response may be to work longer. Even part-time work could lessen the pressure to draw down your retirement assets. WEEKLY RIDDLE              They had weight in their stomachs, tall trees on their backs, nails in their ribs, yet feet they lacked. The world saw thousands of them centuries ago. What were they?         Last week’s riddle: After badly losing an away game, a college football team doesn’t want their coach to come in and yell at them, so they put 1,000 pounds of weights against a locker room door to prevent him from opening it. He comes in and yells at them face-to-face anyway. Why are they unable to keep him from coming through the doorway?    Last week’s answer: The door opens outward.           July 31, 2017     HOUSEHOLDS ARE FEELING OPTIMISTIC Unemployment is at a 16-year low, and the Conference Board’s consumer confidence index is near a 16-year high. It reached 121.1 in July, rising 3.8 points; analysts polled by MarketWatch expected a reading of 116.9. The University of Michigan’s consumer sentiment index rose to 93.4.1,2   HAVE HOME SALES REACHED A PLATEAU? Last week, the National Association of Realtors announced a 1.8% June retreat for existing home sales. New home buying only advanced 0.8% for June by Census Bureau calculations. Analysts point to tight supply limiting resales and a scarcity of affordably priced new developments discouraging new home shoppers.3    ...

Economic Update, July 24, 2017

Untitled Document Phillip Allen Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Freedom is a possession of inestimable value.” – Cicero WEEKLY TIP               Business owners can waste hours chasing late payments. If you have clients or customers who constantly pay late, ask yourself whether keeping them is worth the headache. It may not be. WEEKLY RIDDLE              After badly losing an away game, a college football team doesn’t want their coach to come in and yell at them, so they put 1,000 pounds of weights against a locker room door to prevent him from opening it. He comes in and yells at them face-to-face anyway. Why are they unable to keep him from coming through the doorway?         Last week’s riddle: Multiply all the numbers on your phone’s keypad. What number do you get?    Last week’s answer: Zero.           July 24, 2017     WILL STOCKS GET AN EARNINGS BOOST? While the first full week of the Q2 earnings season saw no pronounced rallies, there were also no shocks. By Friday’s closing bell, 20% of S&P 500 member firms had reported calendar Q2 results, and a FactSet analysis showed 77% had topped sales projections and 73% had beaten earnings-per-share forecasts – a good sign in an earnings-driven market climate. The Nasdaq Composite gained 1.19% last week and settled at 6,387.75 Friday; the S&P 500 rose to 2,472.54 after a 5-day gain of 0.54%. As blue chips fell 0.27% across five trading days, the Dow Jones Industrial Average closed at 21,580.07 Friday. All three indices hit record highs during the week.1,2   CONSTRUCTION ACTIVITY SURGED IN...

Economic Update, July 17, 2017

Untitled Document Tony Dale Inc.   WEEKLY ECONOMIC UPDATE     WEEKLY QUOTE                “Competition is a painful thing, but it produces great results.” – Jerry Flint WEEKLY TIP               Disability insurance can help to protect your income if you are too sick or hurt to work. If employer-provided disability insurance is absent or inadequate, look at buying a personal policy. WEEKLY RIDDLE              Multiply all the numbers on your phone’s keypad. What number do you get?       Last week’s riddle: What goes up and down stairs without moving in many homes and offices?    Last week’s answer: Carpet.           July 17, 2016     INFLATION PRESSURE WEAKENS The Consumer Price Index was unchanged in June, according to the Bureau of Labor Statistics. That left its yearly advance at only 1.6%, nearly half a point below the Federal Reserve’s target (the core CPI was up 1.7%). After the announcement, some economists and market strategists wondered whether the Fed would rethink its plans for a third interest rate hike in 2017. The Producer Price Index rose 0.1% in June, leaving its yearly increase at 2.0%.1,2     RETAIL SALES, CONSUMER SENTIMENT INDEX DECLINE For the second month in a row, households scaled back their retail purchases – retail sales were down 0.2% in June following a 0.1% May decline. Core sales fell 0.2% after a May retreat of 0.3%. The University of Michigan’s preliminary July consumer sentiment index lost 2.0 points off its final June mark to a reading of 93.1.1,2   OIL RALLIES A projection of rising demand and news of a pipeline shutdown in Nigeria sent the price of...