Economic Update April 20, 2015

Phillip Allen Inc.

 

WEEKLY ECONOMIC UPDATE

 

 

WEEKLY QUOTE
              
“We all have big changes in our lives that are more or less a second chance.”
     
– Harrison Ford
      
   
WEEKLY TIP
             
A cleverly promoted, inexpensive customer loyalty program may help your business realize improved long-term cash flow.
  
   
WEEKLY RIDDLE
            
Wilbert was driving a black car. The car’s lights were off, there was no moonlight – and a cat was in the middle of the road. How did Wilbert know to stop?
 
   
Last week’s riddle:
A 400-yard long promenade has an ornate brass bench every 100 yards on both sides, including ones at its beginning and end. So in total, how many benches are there along this promenade? 
   
Last week’s answer:
10 benches, 5 on either side.

 

 

 

 

 

April 20, 2015

   

MODERATE INFLATION RESUMES
The Consumer Price Index rose 0.2% for a second consecutive month in March, as did the Producer Price Index (in a marked departure from its 0.5% February retreat). Economists polled by MarketWatch had forecast an 0.3% March advance in both the headline CPI and PPI.1
   
GROUNDBREAKING UP 2.0% FOR MARCH
Housing industry analysts had expected a much greater increase; this put the annual pace of housing starts at 926,000 instead of the desired 1 million mark. The Census Bureau also reported building permits declining 5.7% last month.2
      
CONSUMER SENTIMENT, RETAIL SALES BOTH RISE
Shoppers increased retail purchases by 0.9% in March, 0.4% minus auto buying. Retail sales had slipped 1.1% in February. The University of Michigan’s initial April consumer sentiment index came in at 95.9, 2.9 points above its final March reading.1
 
OVERSEAS DEVELOPMENTS IMPEDE U.S. STOCKS
Two factors played major roles in Wall Street’s sharp Friday selloff: renewed fears of Greece defaulting on its debt payments to the International Monetary Fund, and China’s decision to limit margin trading and allow more short selling in its stock market. The major indices retreated as follows across the week: Dow, 1.28% to 17,826.30; Nasdaq, 1.28% to 4,931.81; S&P 500, 0.99% to 2,081.18.3,4
       
THIS WEEK: On Monday, Morgan Stanley, Halliburton, IBM, Rent-A-Center, Hasbro and Royal Caribbean Cruises present earnings. Tuesday, the earnings parade continues with results from Under Armour, Kimberly-Clark, East West Bancorp, Credit Suisse Group, Northern Trust, Chipotle, Discover, Lockheed Martin, Amgen, Fifth Third, Manpower, Verizon, Gannett Co., Harley-Davidson, and Yum! Brands. Wednesday, March existing home sales figures complement earnings from Logitech, Coca-Cola, AT&T, Facebook, Cheesecake Factory, Owens Corning, Boeing, eBay, McDonald’s, Qualcomm, Abbott Labs, Bank of New York Mellon, Raymond James, Ameriprise Financial, AutoNation and Texas Instruments. Thursday brings factory PMIs for China and the euro area, March new home sales numbers, a new initial claims report and earnings from BB&T, Procter & Gamble, Southwest Airlines, 3M, Capital One, Dunkin’ Brands, Altera, General Motors, E*Trade, Caterpillar, Google, Microsoft, Dow Chemical, Amazon, Briggs & Stratton, Dr. Pepper Snapple and PepsiCo. Euro area finance ministers and central bankers meet Friday as Wall Street interprets March hard goods orders and earnings from Siemens, Tyco, State Street, Xerox, American Airlines and Biogen. 

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +0.02 +8.64 +12.36 +7.70
NASDAQ +4.13 +20.42 +19.75 +15.78
S&P 500 +1.08 +11.60 +14.92 +8.16

REAL YIELD

4/3 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.02% 0.52% 1.46% 1.66%

 

Sources: online.wsj.com, bigcharts.com, treasury.gov – 12/26/145,6,7,8

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.

 

 

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 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. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, 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 an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. 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. 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 [4/17/15]
2 – nasdaq.com/article/forex-yen-slightly-stronger-ahead-of-consumer-data-all-eyes-on-greece-cm466250 [4/16/15]
3 – money.cnn.com/2015/04/17/investing/stocks-market-dow-global-selloff/index.html [4/17/15]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [4/17/15]
5 – markets.wsj.com/us [4/17/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F17%2F14&x=0&y=0 [4/17/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F17%2F14&x=0&y=0 [4/17/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F17%2F14&x=0&y=0 [4/17/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F16%2F10&x=0&y=0 [4/17/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F16%2F10&x=0&y=0 [4/17/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F16%2F10&x=0&y=0 [4/17/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F18%2F05&x=0&y=0 [4/17/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F18%2F05&x=0&y=0 [4/17/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F18%2F05&x=0&y=0 [4/17/15]        
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/17/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/17/15]

 

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