RETAIL SALES JUMP 0.6%
This September gain was impressive – minus auto sales, the advance was still 0.5%. In August, both headline and core retail sales fell 0.2%. While consumers bought more last month, they were less confident earlier this month – the University of Michigan’s initial October consumer sentiment index fell 3.3 points to 87.9.1
INTEREST RATES MAY SOON RISE
The minutes from September’s Federal Reserve policy meeting affirmed what some investors suspected. One, last month’s decision not to raise the federal funds rate was a “close call.” Two, the Federal Open Market Committee expects to make a move “relatively soon.” Last month, 74% of economists responding to a Wall Street Journal survey thought the central bank would raise rates in December.2
PRODUCER PRICE INDEX UP 0.3%
A 2.5% advance in energy prices became the biggest factor in September’s PPI gain. The headline PPI rose 0.7% in the 12 months ending in September.3
STOCKS PULL BACK AS EARNINGS SEASON BEGINS
During five choppy trading days last week, the Dow Jones Industrial Average retreated 0.56% to 18,138.38; the S&P 500, 0.96% to 2,132.98; and the Nasdaq Composite, 1.48% to 5,214.16. The CBOE Volatility Index closed at 16.00 Friday, up 18.69% for the week.4
THIS WEEK: Monday, Wall Street looks at earnings from Bank of America, Celanese, Del Taco, Hasbro, IBM, J.B. Hunt, Lennox International, and Netflix, plus numbers on September industrial output. On Tuesday, BlackRock, Domino’s Pizza, Goldman Sachs, Harley-Davidson, Intel, Johnson & Johnson, Philip Morris, Yahoo!, Regions Financial, UnitedHealth, and W.W. Grainger join the earnings parade, and the September CPI arrives. Abbott Labs, American Express, BB&T, Citrix, eBay, Mattel, Halliburton, Morgan Stanley, Northern Trust, Seagate, St. Jude Medical, SuperValu, U.S. Bancorp, and United Rentals all report earnings Wednesday; investors will also consider September data on housing starts and building permits, and a new Federal Reserve Beige Book. Thursday offers earnings from Alaska Air, American Airlines, BoNY Mellon, Dunkin’ Brands, E*TRADE, Fifth Third, IMAX, Invacare, Microsoft, Nucor, PayPal, PulteGroup, Quest Diagnostics, Schlumberger, Union Pacific, Verizon, and Walgreens Boots Alliance; reports on initial jobless claims and September existing home sales also appear. Friday, the key earnings reports come from General Electric, Honeywell International, McDonalds, Parker Hannifin, SunTrust, and Whirlpool.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||10/14 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.13%||0.50%||0.28%||2.47%|
Sources: wsj.com, bigcharts.com, treasury.gov – 10/14/164,5,6,7
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.
“Young is the one that plunges into the future and never looks back.”
– Milan Kundera
If you are trying to rebuild or ramp up your retirement savings in your forties or fifties, avoid grasping at straws. Extremely speculative, high-risk investments are often hard to understand and may drastically underperform compared to their hype.
I possess a single eye, yet I cannot see. I could, however, hurt you – even if I don’t move. What am I?
Last week’s riddle:
I have 6 faces, but I wear no makeup. I often roll around and bump into things. What am I?
Last week’s answer:
A die (singular of dice).
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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.
1 – marketwatch.com/economy-politics/calendars/economic [10/14/16]
2 – tinyurl.com/hhanz42 [10/12/16]
3 – foxbusiness.com/markets/2016/10/14/september-producer-prices-rise-more-than-expected.html [10/14/16]
4 – markets.wsj.com/us [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F14%2F15&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F14%2F15&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F14%2F15&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F14%2F11&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F14%2F11&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F14%2F11&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F13%2F06&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F13%2F06&x=0&y=0 [10/14/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F13%2F06&x=0&y=0 [10/14/16]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/14/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/14/16]