YELLEN HINTS AT A RATE HIKE
Speaking Friday at the Federal Reserve’s annual retreat in Jackson Hole, Wyoming, Fed chair Janet Yellen commented that “the case for an increase in the federal funds rate has strengthened in recent months.” That statement was interpreted by some economists as a sign that the central bank could adjust interest rates this fall, but perhaps only after the presidential election.1
NEW HOME SALES ACCELERATE, RESALES DECLINE
The good news, from the Census Bureau: July brought a 12.4% leap in new home buying. Sales approached a 9-year peak, even with only 4.3 months of new home inventory available. The bad news, from the National Association of Realtors: July saw existing home purchases slip 3.2%. Inventory was down 5.8% year-over-year; the median sale price was $244,100, 5.3% better than a year earlier.2
SENTIMENT GAUGE SLIPS IN AUGUST
The University of Michigan’s consumer sentiment index finished the eighth month of the year at 89.8, underneath its 90.4 preliminary reading. Consumer assessment of current economic conditions remained high at 107.0, increasing nearly a point from the initial August survey.3
STOCKS GIVE BACK SOME GROUND
Wall Street wavered after Janet Yellen’s speech Friday, and all three major indices ended up down for the week as investors contemplated her remarks and the federal government’s new 1.1% estimate of Q2 growth. Comparing the settlements at Friday’s closing bell to those a week earlier, the Dow Jones Industrial Average settled 0.85% lower at 18,395.40; the Nasdaq Composite, 0.37% lower at 5,218.92; and the S&P 500, 0.68% lower at 2,169.04.3,4
THIS WEEK: On Monday, investors will consider the July personal spending report. The Conference Board’s August consumer confidence index and the June Case-Shiller home price index arrive Tuesday, plus earnings from Abercrombie & Fitch, Bob Evans, DSW, Fred’s, H&R Block, and Palo Alto Networks. Wednesday offers the latest ADP employment change numbers, July pending home sales figures and earnings from Chico’s, Five Below, and Navistar. Thursday, the August Challenger job-cut report, ISM’s August manufacturing PMI and a new initial claims report all appear, along with earnings from Broadcom, Campbell Soup, Land’s End, Lululemon Athletica, Smith & Wesson, and VeriFone. Friday, the Department of Labor issues its August jobs report and Sears Hometown & Outlet Stores announces Q2 results.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||8/26 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.15%||0.65%||0.15%||2.24%|
Sources: wsj.com, bigcharts.com, treasury.gov – 8/26/164,5,6,7
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.
“Education’s purpose is to replace an empty mind with an open one.”
– Malcolm Forbes
One path toward some back-to-school shopping savings: follow your favorite stores on Facebook and Twitter. See if they can also text you some discount offers.
Together, an antique dresser and the old baseball cards found within it are valued at $20,000. If the baseball cards are worth $18,000 more than the dresser, how much is the dresser worth?
Last week’s riddle:
It floats gently when it is born, lies still when it is alive, and runs when it is dead. What is it?
Last week’s answer:
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1 – usatoday.com/story/money/2016/08/26/yellen-case-rate-hike-has-strengthened/89363312/ [8/26/16]
2 – nytimes.com/aponline/2016/08/24/us/politics/ap-us-home-sales.html [8/24/16]
3 – investing.com/economic-calendar/ [8/26/16]
4 – markets.wsj.com/us [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F26%2F15&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F26%2F15&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F26%2F15&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F26%2F11&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F26%2F11&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F26%2F11&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F25%2F06&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F25%2F06&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F25%2F06&x=0&y=0 [8/26/16]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/26/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/26/16]