Economic Update June 1, 2015

Phillip Allen Inc.

 

WEEKLY ECONOMIC UPDATE

 

 

 WEEKLY QUOTE
              
“Try to learn something about everything and everything about something.”

– Thomas H. Huxley

WEEKLY TIP
             
Most consumer expenses boil down to choices and options rather than necessities. Keeping that in mind could help you save money month-to-month.   

WEEKLY RIDDLE
            
You throw it out when you need to use it. You bring it up when you don’t. As you travel, it goes with you. What is it?

Last week’s riddle:
Your mother’s brother’s only brother-in-law is taking a picture of you. How is he more closely related to you?  

Last week’s answer:
He is also your father.

 

 

 

 

 

June 1, 2015

   

THREE KEY REAL ESTATE INDICATORS IMPRESS
All of a sudden, the housing market looks much healthier. The Census Bureau reported a 6.8% jump in new home buying in April, and the National Association of Realtors said its pending home sales index improved 3.4% in that month to 108.7 (its best reading since May 2006). The numbers that matter most were also impressive: year-over-year, new home sales were up 26.1% and pending home sales 14.0% (even as existing home inventory declined). Additionally, the March 20-city S&P/Case-Shiller home price index showed a 5.0% annualized gain (the broader national home price index rose 4.1% in 12 months).1,2
   
HARD GOODS REPORT PRESENTS MIXED MESSAGE 
Total durable goods orders fell 0.5% in April, yet the Commerce Department found core durable goods orders (excepting transportation orders) up 0.5% for that month. Shipments of core durables rose 0.8% in April after a 1.0% gain for March.3
 
CONSUMER SENTIMENT HOLDS UP
That was evident in the two major surveys of households. The Conference Board’s consumer confidence index rose 1.1 points for May to 95.4; the University of Michigan’s final May index reached 90.7 after its previous 88.6 reading.4
      
Q1 GDP: WORSE THAN PREVIOUSLY THOUGHT
In its second estimate, the Bureau of Economic Analysis said the economy contracted 0.7% in the first quarter, which precisely matched the consensus forecast at Briefing.com.4
  
MAY ENDS WITH A DOWN WEEK
From Tuesday’s opening bell to Friday’s close, the Dow lost 1.50%, the Nasdaq 0.41% and the S&P 500 0.88%. The Friday settlements for the big three: Dow, 18,010.68; Nasdaq, 5,070.03; S&P, 2,107.39.5
       
THIS WEEK: April’s personal spending report, the May ISM manufacturing PMI and China and euro area factory PMIs arrive Monday. Investors review May auto sales and factory orders Tuesday along with earnings from Cracker Barrel, Guess? and Dollar General. Wednesday brings the May ADP employment report, a new Beige Book from the Federal Reserve and ISM’s May non-manufacturing PMI. On Thursday, Wall Street looks at May’s Challenger job-cut report, new initial claims figures and earnings from VeriFone and J.M. Smucker. The Labor Department issues its May jobs report Friday.  

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +1.05 +7.86 +15.54 +7.08
NASDAQ +7.05 +19.35 +24.93 +14.43
S&P 500 +2.36 +9.76 +18.69 +7.58

REAL YIELD

4/3 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.32% 0.22% 1.32% 1.67%

 

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 – forbes.com/sites/erincarlyle/2015/05/28/april-pending-home-sales-hit-nine-year-high/ [5/28/15]
2 – inman.com/2015/05/26/real-estate-market-update-may-26-2015/ [5/26/15]
3 – investing.com/news/economic-indicators/u.s.-durable-goods-orders-drop-0.5,-core-orders-rise-0.5-343505 [5/28/15]
4 – briefing.com/investor/calendars/economic/2015/05/25-29 [5/29/15]
5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [5/29/15]
6 – markets.wsj.com/us [5/29/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F29%2F14&x=0&y=0 [5/29/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F29%2F14&x=0&y=0 [5/29/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F29%2F14&x=0&y=0 [5/29/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F28%2F10&x=0&y=0 [5/29/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F28%2F10&x=0&y=0 [5/29/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F28%2F10&x=0&y=0 [5/29/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F27%2F05&x=0&y=0 [5/29/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F27%2F05&x=0&y=0 [5/29/15]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F27%2F05&x=0&y=0 [5/29/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/29/15]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/29/15]

 

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