Weekly Economic Update 1/11/2016

Weekly Economic Update 1/11/2016

CAN STOCKS REGAIN THEIR FOOTING THIS WEEK?

Investors hope so after a very rough start to 2016. Declining oil prices and disappointing manufacturing data in both the U.S. and China helped trigger a global selloff: the major equity indices in Europe and Asia fell between 5-9% last week with our benchmarks following suit. The Dow Jones Industrial Average lost 6.19% in five days to 16,346.45, paralleled by a 6.13% fall for the S&P 500 to 1,922.03 and a 7.27% descent for the Nasdaq Composite to 4,643.60. The week ended with the S&P 9.8% below its May 2015 peak, and with Wall Street hoping for some stability and a decent Q4 earnings season.1,2

292,000 NEW HIRES IN DECEMBER
The Labor Department’s latest employment report affirmed the durability of the U.S. economy. Last month’s impressive payroll growth was complemented by upward revisions to hiring totals for October (307,000) and November (252,000). Economists surveyed by the Wall Street Journal had expected 210,000 new jobs in December. The U-3 and U-6 jobless rates remained at 5.0% and 9.9% last month. Year-over-year wage growth rose to 2.5%.3

FACTORY SECTOR CONTRACTS FOR ANOTHER MONTH
In December, the Institute for Supply Management’s manufacturing PMI remained under 50, slipping 0.4 points lower to a reading of 48.2. ISM’s service sector PMI declined 0.6 points last month, but still showed strong sector growth at 55.3.4

GOLD PRICES CLIMB, OIL PRICES SLIDE
Rallying in the flight to safety that occurred last week, COMEX gold settled Friday at 1,097.90. The yellow metal gained 3.6% in five trading days. NYMEX crude ended the week at its lowest close since 2005 – just $33.16, a price resulting from a 10.0% five-day decline.5

THIS WEEK: Earnings season starts Monday evening with Q4 results from Alcoa. Nothing major is slated for Tuesday. Wednesday, a new Federal Reserve Beige Book appears, plus Q4 results from SuperValu. Earnings from Intel, JPMorgan Chase, and Rocky Mountain Chocolate Factory arrive Thursday. Friday offers earnings from BlackRock, Citigroup, Fastenal, PNC Financial Services, Wells Fargo, Regions Financial, and U.S. Bancorp, the initial January University of Michigan household sentiment index, the December PPI, and reports on December industrial production and retail sales.

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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 – investing.com/indices/major-indices [1/8/16]
2 – bloomberg.com/news/articles/2016-01-08/u-s-index-futures-signal-rebound-as-yuan-fixing-soothes-nerves [1/8/16]
3 – news.morningstar.com/all/dow-jones/us-markets/201601085057/us-job-market-closed-2016-on-strong-note.aspx [1/8/16]
4 – briefing.com/investor/calendars/economic/2016/01/04-08 [1/8/16]
5 – 247wallst.com/investing/2016/01/08/the-4-stocks-that-weighed-on-the-djia-friday-2/ [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F8%2F15&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F8%2F15&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F8%2F15&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F7%2F11&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F7%2F11&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F7%2F11&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F9%2F06&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F9%2F06&x=0&y=0 [1/8/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F9%2F06&x=0&y=0 [1/8/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/8/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/8/16]

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