LARGEST INFLATION ADVANCE IN 5 YEARS
The Consumer Price Index rose 2.1% in 2016, marking its greatest annual gain since 2011. During 2015, consumer prices only increased by 0.7%. December saw a 0.3% rise for the headline CPI and a 0.2% gain for the core CPI (which excludes food and energy costs). The core CPI gained 2.2% last year.1
MUCH MORE GROUNDBREAKING IN DECEMBER
Cold had little impact on residential construction as 2016 ended. Housing starts advanced 11.3% last month and rose 5.7% for the year. Single-family starts declined 4.0% in December, but they still improved 3.9% in 2016. Building permits were down 0.2% last month and posted a yearly gain of 0.7%.2
GOLD GOES BACK ABOVE $1,200
The yellow metal rose 1.84% week-over-week to settle Friday at $1,210.00 on the COMEX. (Silver ended the week at $17.12.) On the NYMEX, oil ended up at $52.33 as Wall Street rang its closing bell Friday, retreating 0.19% week-over-week.3
MAJOR INDICES DRIFT LOWER
Stocks retreated last week, but just slightly. Across four trading days, losses trimmed the Dow Industrials by 0.30%, the S&P 500 by 0.15%, and the Nasdaq Composite by 0.32%. Friday’s settlements: Dow, 19,827.25; Nasdaq, 5,555.33; S&P, 2,271.31.4
THIS WEEK: On Monday, Halliburton, McDonalds, and Yahoo! report Q4 results. December existing home sales numbers arrive Tuesday, complementing earnings from 3M, Alibaba, Capital One, Corning, D.R. Horton, Discover, Fifth Third Bancorp, Johnson & Johnson, Kimberly-Clark, Lockheed Martin, Seagate Technology, Stryker, Texas Instruments, Travelers, and Verizon. Wednesday’s earnings parade features Abbott Labs, AT&T, Boeing, Briggs & Stratton, Brinker International, Dolby Labs, Citrix, Freeport-McMoRan, eBay, Norfolk Southern, Qualcomm, Raymond James, Rockwell Automation, United Rentals, W.W. Grainger, and Western Digital. New initial claims data appears Thursday, plus December new home sales figures and earnings from Alphabet, Biogen, Bristol-Myers Squibb, Caterpillar, Celgene, Comcast, Dow Chemical, E*TRADE, Ford, Intel, JetBlue, Microsoft, Northrop Grumman, PayPal, Praxair, PulteGroup, Quest Diagnostics, Raytheon, Regis, Royal Caribbean, Sherwin-Williams, Southwest Airlines, Stanley Black & Decker, and Starbucks. Friday offers the first estimate of Q4 GDP, December durable goods orders, the final January University of Michigan consumer sentiment index, and earnings from Chevron, American Airlines, Colgate-Palmolive, Honeywell, NextEra Energy, and Whirlpool.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||1/20 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.44%||0.69%||0.01%||2.47%|
Sources: wsj.com, bigcharts.com, treasury.gov – 1/20/175,6,7,8
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.
“Always laugh when you can. It is cheap medicine.”
– Lord Byron
If you think you will receive a federal tax refund this year, why not file electronically and arrange a direct deposit to your checking or savings account? Alternately, you can use IRS Direct Pay to make individual and estimated tax payments from your bank accounts.
A bus without passengers pulls into Tucson, where 10 passengers board it. In Las Cruces, 5 passengers get off the bus, and twice as many passengers get on as in Tucson. Then in El Paso, 25 passengers get off the bus. How many people are on the bus as it leaves El Paso?
Last week’s riddle:
It is a home with no doors, and when its occupant leaves it cracks and it is no more. What is it?
Last week’s answer:
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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. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a 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 a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. 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. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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.
1 – houstonchronicle.com/business/economy/article/Consumer-prices-up-a-moderate-0-3-percent-last-10867241.php [1/18/17]
2 – marketwatch.com/story/housing-starts-surge-in-december-to-second-highest-pace-of-recovery-2017-01-19 [1/19/17]
3 – markets.on.nytimes.com/research/markets/commodities/commodities.asp [1/20/17]
4 – google.com/finance?q=INDEXDJX%3A.DJI&ei=pYOCWLmWKsn_jAHphIqQBg [1/20/17]
5 – markets.wsj.com/us [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F20%2F16&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F20%2F16&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F20%2F16&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F20%2F12&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F20%2F12&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F20%2F12&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F19%2F07&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F19%2F07&x=0&y=0 [1/20/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F19%2F07&x=0&y=0 [1/20/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/20/17]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/20/17]