Weekly Economic Update 3/6/2017

YELLEN: RATE MOVE MAY HAPPEN THIS MONTH 

In Chicago Friday, Federal Reserve chair Janet Yellen said that if hiring and inflation indicators continue to meet the central bank’s expectations, an interest rate hike “would likely be appropriate” at its March policy meeting. She also noted that, barring unforeseen events, the pace of tightening in the near term “likely will not be as slow as it was during the past couple of years.” After these statements, the Fed futures market put the chance of a March rate increase at 82%.1      

RISING CONFIDENCE, TEMPERED SPENDING  

At a mark of 114.8, the Conference Board consumer confidence index reached its highest point in 14½ years in February. Just 20.3% of Americans found jobs “hard to get,” the smallest percentage in eight years. A Department of Commerce report, however, showed only average consumer spending in January: personal spending rose just 0.2% in that month, and it actually slipped 0.3% when adjusted for inflation. Personal incomes grew by 0.4% in the first month of the year.2,3       

FACTORIES HUM IN FEBRUARY 

The Institute for Supply Management’s manufacturing purchasing manager index rose 1.7 points to 57.7 last month. That was its best reading since August 2014. ISM’s services gauge also improved; it moved north 1.1 points in February to 57.6.3,4   

HOME VALUES RISE NEARLY 6% in 12 MONTHS 

December’s S&P/Case-Shiller 20-city house price index showed a 5.8% yearly gain in home appreciation. In the November edition, the advance was 5.6%.4        

ANOTHER DOW MILESTONE 

The Dow Industrials closed above 21,000 for the first time last week, adding 0.88% across five days to settle at 21,005.71 Friday. The S&P 500 rose 0.67% for the week to 2,383,12; the Nasdaq Composite, 0.44% to 5,870.75.5    

THIS WEEK: Monday brings earnings from Analogic, Casey’s General Stores, and Thor Industries. Tuesday, investors consider quarterly results from Alamo Group, Dick’s Sporting Goods, H&R Block, Navistar, and Urban Outfitters. Wednesday sees the release of ADP’s February payrolls report and earnings from Bob Evans Farms, Hovnanian, Stein Mart, and Valspar. The latest initial unemployment claims figures appear Thursday, plus earnings from El Pollo Loco, Real Goods Solar, Smith Micro, and Verifone. Friday offers the February jobs report from the Department of Labor and Q4 results from Kirkland’s.  

% CHANGE  Y-T-D  1-YR CHG  5-YR AVG  10-YR AVG 
DJIA  +6.29  +23.97  +12.37  +7.34 
NASDAQ  +9.06  +24.71  +19.45  +14.79 
S&P 500  +6.44  +19.55  +14.80  +7.18 
REAL YIELD  3/3 RATE  1 YR AGO  5 YRS AGO  10 YRS AGO 
10 YR TIPS  0.45%  0.30%  -0.24%  2.15% 

Sources: wsj.com, bigcharts.com, treasury.gov – 3/3/175,6,7,8 

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.

WEEKLY QUOTE                

“Education is the ability to listen to almost anything without losing your temper or your self-confidence.”       

Robert Frost             

WEEKLY TIP               

A National Council on Aging website, benefitscheckup.org, has links to many federal, state, and local programs that help retirees save money on medicines, utilities, health care services, and more. Visit the site to see if you are eligible for them.         

WEEKLY RIDDLE              

Michelle threw a softball 30 feet, and it didn’t hit anything and it came back to her. What did she do to make this happen?        

Lastweek’sriddle: 

They may be sharp and flat, but they may soothe you rather than hurt you. What are they?       

Lastweek’sanswer: 

Musical notes.

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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.    

Citations. 

1 – usatoday.com/story/money/2017/03/03/yellen-signals-likely-rate-hike-march-meeting/98657322/ [3/3/17] 

2 – marketwatch.com/story/consumer-confidence-hits-15-year-high-2017-02-24 [2/28/17] 

3 – cnbc.com/2017/03/01/us-personal-income-jan-2017.html [3/1/17] 

4 – marketwatch.com/economy-politics/calendars/economic [3/3/17] 

5 – markets.wsj.com/us [3/3/17] 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F3%2F16&x=0&y=0 [3/3/17] 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F3%2F16&x=0&y=0 [3/3/17] 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F3%2F16&x=0&y=0 [3/3/17] 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F2%2F12&x=0&y=0 [3/3/17] 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F2%2F12&x=0&y=0 [3/3/17] 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F2%2F12&x=0&y=0 [3/3/17] 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F2%2F07&x=0&y=0 [3/3/17] 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F2%2F07&x=0&y=0 [3/3/17] 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F2%2F07&x=0&y=0 [3/3/17] 

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/3/17] 

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/3/17]

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