Weekly Economic Update 8/1/2016

Weekly Economic Update 8/1/2016

CONFIDENCE INDICES HOLD STEADY

Rising half a point from its previous reading, the University of Michigan’s consumer sentiment index finished July at 90.0. The Conference Board’s monthly household confidence gauge came in at 97.3 last week, near its (revised) June mark of 97.4.1

ROUNDING UP THE LATEST REAL ESTATE NEWS

New Census Bureau data shows new home sales up 3.5% in June after a 6.0% May setback. Pending sales of existing homes increased 0.2% in June, reported the National Association of Realtors. The S&P/Case-Shiller home price index (20-city composite) rose 0.9% in May, putting its annualized gain at 5.2%.1 

ECONOMY GREW JUST 1.2% IN Q2

The Bureau of Economic Analysis disappointed Wall Street with its initial estimate of second quarter GDP. Economists polled by Bloomberg expected growth of 2.5%. While household consumption rose 4.2% in Q2, private fixed investment took its biggest quarterly fall since 2009, slipping 3.2%.2

STOCKS PULL BACK A BIT

July ended with the S&P 500 at 2,173.60, the Nasdaq at 5,162.13, and the Dow at 18,432.24. Their performance numbers for the week: S&P, -0.07%; Nasdaq, +1.22%; Dow, -0.75%.3

THIS WEEK: Monday, ISM issues its July manufacturing PMI and AMC, AmeriGas, CNA Financial, Frontier Communications, Loews, Macerich, and Vulcan Materials offer earnings. June consumer spending numbers arrive Tuesday, in addition to earnings from Aetna, Archer Daniels Midland, Avis Budget Group, Choice Hotels, Cummins, CVS Health, DreamWorks, Electronic Arts, Fitbit, Genworth Financial, Hanesbrands, Hyatt Hotels, Martin Marietta, Molson Coors, Papa John’s, Pfizer, Pitney Bowes, Procter & Gamble, Royal Caribbean, and Seagate Technology. ADP’s July payrolls report emerges Wednesday, plus ISM’s services PMI and earnings from Allstate, Clorox, GoDaddy, Herbalife, Humana, Marathon Oil, MetLife, Noble Energy, Occidental Petroleum, Office Depot, Prudential, Tesla, Tesoro, Time Warner, Transocean, 21st Century Fox, and Western Union. Thursday, initial claims figures and the July Challenger job-cut report complement earnings from Activision Blizzard, AMC Networks, Chesapeake Energy, Duke Energy, Fluor, Icahn Enterprises, iheartMedia, Jamba, Kellogg, Kemper, LinkedIn, Lions Gate, Parker-Hannifin, Priceline, Sempra Energy, Symantec, Take-Two, TripAdvisor, Viacom, Wingstop, and Zynga. The federal government’s July jobs report appears Friday, plus earnings from Kraft Heinz, U.S. Cellular, Virgin America, Weyerhaeuser, and William Lyon Homes.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +5.78 +3.84 +10.36 +6.43
NASDAQ +3.09 +0.99 +17.46 +14.65
S&P 500 +6.34 +3.08 +13.64 +7.00
REAL YIELD 7/29 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS -0.03% 0.52% 0.38% 2.41%

Sources: wsj.com, bigcharts.com, treasury.gov – 7/29/163,4,5,6

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

“To give anything less than your best is to sacrifice the gift.”    

– Steve Prefontaine

WEEKLY TIP

Small business owners need not buy on impulse. The longer an SBO can postpone a major purchase, the more time he or she gains to locate the best deal or the product or service best suited to the needs and goals of the company.

WEEKLY RIDDLE

What can you find precisely in the middle of Miami?

Last week’s riddle:

Take the number 3 and add another number 3, and you get 6 … but how can you get 8 from a pair of threes?

Last week’s answer:

Flip one of the 3s around and join it to the other 3 to make the number 8.

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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/economic-calendar/ [7/29/16]

2 – bloomberg.com/news/articles/2016-07-29/u-s-economy-grew-a-less-than-forecast-1-2-in-second-quarter [7/29/16]

3 – markets.wsj.com/us [7/29/16]

4 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F29%2F15&x=0&y=0 [7/29/16]

4 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F29%2F15&x=0&y=0 [7/29/16]

4 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F29%2F15&x=0&y=0 [7/29/16]

4 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F29%2F11&x=0&y=0 [7/29/16]

4 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F29%2F11&x=0&y=0 [7/29/16]

4 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F29%2F11&x=0&y=0 [7/29/16]

4 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F28%2F06&x=0&y=0 [7/29/16]

4 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F28%2F06&x=0&y=0 [7/29/16]

4 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F28%2F06&x=0&y=0 [7/29/16]

5 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/29/16]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/29/16]

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