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 the five trading days ending Friday. Gold futures gave back 0.3% last week on the COMEX, settling Friday at $1,323.40.3,4
  
AGING BULL SHOWS CONTINUED STRENGTH
All three U.S. benchmarks posted gains last week. During July 18-22, the S&P 500 rose 0.61% to 2,175.03; the Nasdaq Composite, 1.40% to 5,100.16; and the Dow Jones Industrial Average, 0.29% to 18,570.85.5
    

THIS WEEK: On Monday, Celanese, CoreLogic, Express Scripts, Gilead Sciences, Kimberly-Clark, Smith Micro, Sprint, and Texas Instruments announce earnings. June new home sales data, July’s Conference Board consumer confidence index, and May’s Case-Shiller home price index arrive Tuesday, plus earnings from 3M, Ally Financial, Ameriprise Financial, Anadarko Petroleum, Apple, Avery Dennison, Caterpillar, Chubb, Citrix, Eli Lilly, Freeport-McMoRan, JetBlue, McDonald’s, Panera, Sirius XM, Twitter, U.S. Steel, Valero Energy, and Verizon. Wednesday, a Federal Reserve policy meeting wraps up; Wall Street also considers June pending home sales and capital goods orders and earnings from Altria, Amgen, Anthem, Boeing, Coca-Cola, Comcast, Dr. Pepper Snapple, Exelon, Facebook, Garmin, GlaxoSmithKline, Goodyear, GoPro, Hilton, Ingersoll-Rand, Marriott, NextEra Energy, Noble Corp., Northrop Grumman, Owens Corning, Public Storage, Ryder, Six Flags, T-Mobile, and Waste Management. Thursday’s earnings parade includes Aflac, Alphabet, Amazon, Bristol-Myers Squibb, Celgene, ConocoPhillips, Dow Chemical, Edison International, Expedia, Hershey, Marathon Petroleum, MasterCard, Raytheon, and Virgin America. Friday offers the first Q2 GDP estimate, July’s final University of Michigan consumer sentiment index, and earnings from Chevron, ExxonMobil, Phillips 66, Spirit Airlines, UPS, and Xerox.

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA 6.58 4.03 9.29 7.09
NASDAQ 1.85 -1.38 15.68 15.24
S&P 500 6.41 2.88 12.34 7.53
REAL YIELD 7/22 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.06% 0.53% 0.61% 2.49%

 

Sources: wsj.com, bigcharts.com, treasury.gov – 7/8/166,7,8,9
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 – tinyurl.com/jnqb3ej [7/21/16]
2 – zacks.com/stock/news/224604/2-conglomerates-earnings-to-watch-on-jul-25-dhr-cr [7/22/16]
3 – marketwatch.com/story/oil-futures-settle-nearly-4-lower-for-the-week-2016-07-22 [7/22/16]
4 – marketwatch.com/story/gold-stumbles-on-track-for-back-to-back-weekly-loss-2016-07-22 [7/22/16]
5 – markets.wsj.com/us [7/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F22%2F15&x=0&y=0 [7/22/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F22%2F15&x=0&y=0 [7/22/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F22%2F15&x=0&y=0 [7/22/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F22%2F11&x=0&y=0 [7/22/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F22%2F11&x=0&y=0 [7/22/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F22%2F11&x=0&y=0 [7/22/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F21%2F06&x=0&y=0 [7/22/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F21%2F06&x=0&y=0 [7/22/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F21%2F06&x=0&y=0 [7/22/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/22/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/22/16]

 

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