Economic Update June 8, 2015

Phillip Allen Inc.

 

WEEKLY ECONOMIC UPDATE

 

 

 WEEKLY QUOTE
              
“Sometimes a slow gradual approach does more good than a large gesture.”

– Craig Newmark

WEEKLY TIP
             
If you are starting up a small business, realistically list all essential expenses you will incur during the first six months, from utility and Internet bills to rent and employee wages.   

WEEKLY 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 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 answer:
An anchor.

 

 

 

 

 

June 8, 2015

   

NO LETUP IN HIRING IN MAY
Last Thursday, the International Monetary Fund took the unusual step of offering the Federal Reserve some advice – it urged the central bank not to raise interest rates until 2016. Given the large hiring gains this spring, the Fed may choose to ignore that recommendation. U.S. employers added 280,000 new workers last month; since the labor force participation rate slightly increased, the jobless rate ticked up to 5.5% in May with the broader U-6 rate (unemployed+ underemployed) remaining at 10.8%. According to Labor Department data, 120,000 of the new jobs were in the leisure & hospitality and service industry sectors, but there were also 47,000 hires in the health care sector.1
   
Consumer spending was flat IN April 
This news was a disappointment after the 0.5% advance the Commerce Department measured for March. Consumer incomes, however, improved 0.4% in April; in March, there was no gain.2
 
ISM: SERVICES PMI SLIPS, FACTORY PMI RISES
Falling 2.1 points to 55.7 in May, the Institute for Supply Management’s services sector PMI came in below the 57.0 reading projected by economists polled by MarketWatch. ISM’s manufacturing PMI rose 1.3 points in May to 52.8, beating the MarketWatch consensus forecast by a full point.2
      
A RETREAT ON WALL STREET
The first trading week of June saw the S&P 500 slip 0.69% across five days to 2,092.83. From June 1-5, the Nasdaq lost just 0.03% to 5,068.46 while the Dow declined 0.90% to 17,849.46. Oil slumped 1.9% – its first down week in three months – to a settlement of $59.13 on the NYMEX Friday. COMEX gold gave back 1.8% for the week, closing Friday at $1,168.00 an ounce.3,4
       
THIS WEEK: On Monday, Sears Holdings, H&R Block, Dave & Buster’s and Casey’s General Stores present earnings and Apple kicks off its worldwide developer conference. Tuesday offers earnings from Lululemon Athletica, Converse, Pep Boys, Hovnanian, Burlington Stores and Quiksilver and a Commerce Department report on April wholesale inventories. Krispy Kreme and Men’s Wearhouse announce earnings Wednesday. On Thursday, the Commerce Department releases May retail sales numbers; the latest initial jobless claims report also arrives, plus earnings from Restoration Hardware and Korn/Ferry. Friday, May’s Producer Price Index and the initial June University of Michigan consumer sentiment index appear.  

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +0.15 +6.02 +15.94 +7.05
NASDAQ +7.02 +17.97 +25.68 +14.42
S&P 500 +1.65 +7.85 +19.31 +7.48

REAL YIELD

4/3 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.55% 0.41% 1.26% 1.60%

 

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 – tinyurl.com/p2joeax [6/5/15]
2 – marketwatch.com/economy-politics/calendars/economic [6/4/15]
3 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [6/5/15]
4 – proactiveinvestors.com/companies/news/61835/gold-slides-06-to-1168-wti-adds-2-to-5913-61835.html [6/5/15]
5 – markets.wsj.com/us [6/5/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F5%2F14&x=0&y=0 [6/5/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F5%2F14&x=0&y=0 [6/5/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F5%2F14&x=0&y=0 [6/5/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F4%2F10&x=0&y=0 [6/5/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F4%2F10&x=0&y=0 [6/5/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F4%2F10&x=0&y=0 [6/5/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F6%2F05&x=0&y=0 [6/5/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F6%2F05&x=0&y=0 [6/5/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F6%2F05&x=0&y=0 [6/5/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/5/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/5/15]

 

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