Weekly Economic Update 7/11/2016

Weekly Economic Update 7/11/2016

A REASSURING JOBS REPORT

June was the best month for hiring since October. Employers added 287,000 new jobs to their payrolls last month; analysts polled by Bloomberg forecast a gain of 180,000. The headline unemployment rate rose to 4.9% in the Department of Labor’s latest report, a reflection of more Americans looking for work. The broader U-6 rate, including the underemployed, fell a tenth of a point to 9.6%.1

STRONG SERVICE SECTOR GROWTH IN JUNE

Rising 3.6 points, the Institute for Supply Management’s non-manufacturing purchasing manager index came in at a June mark of 56.5. The index was last above 56 in November. Referencing the past relationship between the index and the overall health of the economy in its summary, ISM noted that a 56.5 reading for its services PMI has corresponded with annualized GDP growth of about 3.0%.2

A 6-WEEK Winning STREAK FOR GOLD

The yellow metal rose another 1.5% last week, closing at a COMEX price of $1,358.40. Silver has also advanced for six consecutive weeks on the COMEX; it closed at $20.10 Friday, rising 2.6% in four days.3

S&P 500 CLOSES JUST SHY OF ALL-TIME HIGH

Settling at 2,129.90 Friday, the index briefly surpassed its May 2015 record close of 2,130.82 in intraday trading. The index gained 1.27% during the abbreviated market week. The Dow Jones Industrial Average added on 1.08% in four days to a July 8 close of 18,146.74, while the Nasdaq Composite improved 1.92% to end the week at 4,956.76. The past four trading days were not good for WTI crude – futures lost 7.3% in that span to a NYMEX close of $45.41 Friday.4,5

THIS WEEK: Earnings season starts Monday with Alcoa reporting Q2 results. Tuesday offers earnings news from Fastenal and Rocky Mountain Chocolate Factory. Wednesday brings a new Federal Reserve Beige Book and earnings from CSX, Kinder Morgan, and Yum! Brands. Thursday, the June PPI and the latest initial jobless claims report complement earnings from BlackRock, Cintas, Delta Air Lines, JPMorgan Chase, and Progressive. On Friday, investors will interpret the June CPI, June industrial output and retail sales numbers, the initial July University of Michigan consumer sentiment index and earnings from Citigroup, U.S. Bancorp, and Wells Fargo.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +4.14 +3.60 +8.67 +6.36
NASDAQ -1.01 +0.96 +14.66 +13.27
S&P 500 +4.21 +4.07 +11.70 +6.83
REAL YIELD 7/8 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.06% 0.40% 0.75% 2.55%

Sources: wsj.com, bigcharts.com, treasury.gov – 7/8/166,7,8,9

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

“Set up as an ideal the facing of reality as honestly and as cheerfully as possible.”  

– Karl Menninger  

WEEKLY TIP

Credit reporting agencies may lower your credit score if you rely heavily on installment-type accounts or loans linked to appliance or home goods retailers, or unsecured personal loans from consumer credit companies. You should pay off such debt as quickly as possible.      

WEEKLY RIDDLE

At times I’m high and low, I never fly but I can rise, and I can creep between your toes. What am I?

Last week’s riddle:

How can you make a sofa, a motorcycle and a tent liquid? 

Last week’s answer:

Sell them.

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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 – csmonitor.com/Business/new-economy/2016/0708/Jobs-report-A-relief-after-disappointing-May-politically-turbulent-June/ [7/8/16]

2 – instituteforsupplymanagement.org/ismreport/nonmfgrob.cfm [7/6/16]

3 – marketwatch.com/story/gold-futures-notch-sixth-straight-weekly-gain-2016-07-08 [7/8/16]

4 – cnbc.com/2016/07/08/us-markets.html [7/8/16]

5 – google.com/finance?q=INDEXSP:.INX&ei=zRSAV-CVGIWaiQLo_bLYCg [7/8/16]

6 – markets.wsj.com/us [7/8/16]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F8%2F15&x=0&y=0 [7/8/16]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F8%2F15&x=0&y=0 [7/8/16]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F8%2F15&x=0&y=0 [7/8/16]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F8%2F11&x=0&y=0 [7/8/16]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F8%2F11&x=0&y=0 [7/8/16]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F8%2F11&x=0&y=0 [7/8/16]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F7%2F06&x=0&y=0 [7/8/16]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F7%2F06&x=0&y=0 [7/8/16]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F7%2F06&x=0&y=0 [7/8/16]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/8/16]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/8/16]

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