Economic Update June 15, 2015

Phillip Allen Inc.

 

WEEKLY ECONOMIC UPDATE

 

 

WEEKLY QUOTE
              
“How much easier it is to be critical than to be correct.”

– Benjamin Disraeli

WEEKLY TIP
             
If you have a large family, it may seem that you should have 3-4 cars, or at least newer and larger vehicles. Think twice about that, as it invites greater household debt.     

WEEKLY RIDDLE
            
I am the beginning of sorrow, and the end of sickness. You cannot express happiness without me, yet I am always in risk. I am never in danger, though. What am I?

Last week’s riddle:
On a summer day, two fathers and two sons went fishing and each one of them caught one fish. Why did they return home with just three fish?  

Last week’s answer:
Because it was a grandfather, a father and a son who went fishing.

 

 

 

 

 

June 15, 2015

   

SPRING SEES MORE SHOPPING
Last week, the Commerce Department announced a 1.2% jump in retail sales for May, topping the 1.1% rise forecast by analysts polled by Briefing.com. Driving the improvement: a 3.7% leap in gas station sales. Purchases increased 2.1% at home improvement outlets, 2.0% at auto dealers and auto parts stores, 1.5% at clothing shops and 1.4% at online retailers. April retail sales were revised from flat to +0.2%, and that makes three straight months of gains.1
    
WHOLESALE INFLATION INCREASES 
Rising gasoline and egg prices influenced the 0.5% gain in the Producer Price Index for May – its largest monthly advance since fall 2012. The core PPI (which strips out energy and food items) rose just 0.1% following April’s 0.2% retreat.2,3
 
A NICE CONSUMER SENTIMENT SURPRISE
The University of Michigan’s respected consumer sentiment index – which ended May at 90.7, its poorest reading since December – exceeded Wall Street expectations. Instead of a slight gain, the preliminary June edition of the index rose to 94.6.2
      
MIXED WEEK FOR THE MARKET
As the closing bell sounded June 12, the three major U.S. stock indices were little changed from the previous week. Across five trading days, the S&P 500 gained a total of 0.06% to reach 2,094.11, the Dow rose 0.28% to 17,898.84 and the NASDAQ lost 0.34% to fall to 5,051.10. Crude prices rose 1.4% on the NYMEX during the week to a $59.96 Friday close; as for gold, it gained 1.0% in five days to settle at $1,179.20 Friday, snapping a three-week losing streak.3,4
       
THIS WEEK: Monday, Wall Street eyes a Federal Reserve report on May industrial output. On Tuesday, the Census Bureau issues a report on May housing starts and building permits, and earnings arrive from Adobe Systems, Bob Evans Farms and La-Z-Boy. The Fed issues its latest policy statement Wednesday, with investors also evaluating earnings reports from FedEx, Jabil Circuit, Oracle and Pier 1 Imports. May’s Consumer Price Index comes out on Thursday, along with a new initial claims report, the Conference Board’s latest set of leading economic indicators and earnings from Darden Restaurants, Kroger, Rite Aid, Smith & Wesson and Red Hat. CarMax and KB Home report earnings on Friday.  

 

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +0.43 +6.96 +15.06 +7.01
NASDAQ +6.65 +17.53 +25.03 +14.41
S&P 500 +1.71 +8.50 +18.37 +7.44

REAL YIELD

4/3 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.55% 0.39% 1.29% 1.76%

 

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 – briefing.com/Investor/Calendars/Economic/Releases/retail.htm [6/11/15]
2 – thestreet.com/story/13184801/1/stocks-trade-lower-twitter-jumps-on-ceo-exit.html [6/12/15]
3 – proactiveinvestors.com/companies/news/61939/gold-drops-01-to-1179-wti-declines-13-to-5996-61939.html [6/12/15]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [6/12/15]
5 – markets.wsj.com/us [6/12/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F12%2F14&x=0&y=0 [6/12/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F12%2F14&x=0&y=0 [6/12/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F12%2F14&x=0&y=0 [6/12/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F11%2F10&x=0&y=0 [6/12/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F11%2F10&x=0&y=0 [6/12/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F11%2F10&x=0&y=0 [6/12/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F13%2F05&x=0&y=0 [6/12/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F13%2F05&x=0&y=0 [6/12/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F13%2F05&x=0&y=0 [6/12/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/12/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/12/15]

 

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