Quantcast

Weekly Economic Update 12/17/2018

In this week’s recap: inflation moderates, oil prices head south, and equities have a tough week.

As FUEL GROWS CHEAPER, INFLATION BECOMES TAMER

Last week, the latest Consumer Price Index arrived, showing no move for headline inflation in November and a 0.2% core inflation increase. That precisely matched the consensus forecast of economists polled by Reuters. What held the headline CPI in check last month? You can credit a sudden drop in gas prices, which fell 4.2%. Annualized inflation declined to 2.2%. Overall producer prices only rose 0.1% last month, compared to an October ascent of 0.6%.1,2     

A MIDDLING ADVANCE FOR RETAIL SALES

During October, American households boosted their retail spending by 1.1% (originally reported by the Department of Commerce as a gain of 0.8%), but November presented a different story. Sales rose last month, but only by 0.2%. The gain remained at 0.2% with auto buying removed.2    

OIL HEADS 2.6% LOWER

That was the weekly loss for light sweet crude, influenced by two factors: increasing dollar strength and concerning economic data from China, which made traders wonder if the P.R.C.’s demand for crude could lessen. Oil settled at $51.20 Friday on the NYMEX.3    

STOCKS HEAD LOWER

Bothered by anxieties about global growth, bulls lost some of their appetite for risk last week. Across five trading days, the S&P 500 ceded 1.26%; the Dow Jones Industrial Average, 1.18%; the Nasdaq Composite, 0.84%. That left them at the following settlements on Friday: S&P, 2,599.95; DJIA, 24,100.51; COMP, 6,910.66. The small-cap Russell 2000 index had it worse, falling 2.57% to 1,410.81 over five days. While all this happened, volatility actually declined, at least according to the CBOE VIX; the leading gauge of Wall Street instability retreated 6.89% for the week to 21.63.4  

T I P   O F   T H E   W E E K
A simple tip to keep credit card spending under control: only use a card for purchases you know you can pay off within one month.  

THIS WEEK

Oracle and Red Hat share quarterly results on Monday. | On Tuesday, the Census Bureau offers a snapshot of November residential construction activity, and Darden Restaurants, FedEx, Jabil, Micron Technology, Navistar, Steelcase, and Worthington Industries present earnings. | Wednesday, the Federal Reserve releases its latest policy statement, followed by a press conference with Fed chair Jerome Powell; in addition, investors will consider October existing home sales numbers and earnings from General Mills, Paychex, Rite Aid, and Winnebago. | On Thursday, earnings roll in from Accenture, BlackBerry, Conagra Brands, Nike, and Walgreens Boots Alliance, and the Department of Labor issues a new initial claims report. | Friday, Wall Street reviews November consumer spending and capital goods orders data, the federal government’s third estimate of Q3 growth, and earnings from CarMax.

Q U O T E   O F   T H E   W E E K

Laughter is an instant vacation.”

MILTON BERLE

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-2.50

-1.67

10.59

18.14

NASDAQ

0.11

0.79

14.54

35.82

S&P 500

-2.76

-1.96

9.29

19.93

     

REAL YIELD

12/14 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

1.07

0.48

0.72

2.43

Sources: wsj.com, bigcharts.com, treasury.gov – 12/14/184,5,6,7

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.

T H E   W E E K L Y   R I D D L E

Dave says that the small city he lives in has a municipal building with more than a hundred stories. What building is this? 

LAST WEEK’S RIDDLE: Take a word with four letters. Take away one, and what remains will be better … better than zero, anyway. What word is this?

ANSWER: Gone.

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, or expenses. Investors cannot invest directly in indices. 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 – cnbc.com/2018/12/12/us-consumer-price-index-november-2018.html [12/12/18]

2 – briefing.com/investor/calendars/economic/2018/12/10-14 [12/14/18]

3 – marketwatch.com/story/oil-falls-as-stock-weakness-and-dollar-strength-dull-impact-of-bullish-supply-data-2018-12-14 [12/14/18]

4 – markets.wsj.com/ [12/14/18]             

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F14%2F17&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F14%2F17&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F14%2F17&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F13%2F13&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F13%2F13&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F13%2F13&x=0&y=0 [12/14/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F15%2F08&x=0&y=0 [12/14/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F15%2F08&x=0&y=0 [12/14/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F15%2F08&x=0&y=0 [12/14/18]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/14/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/14/18]    

©2019 Lewis Wealth Management Group
(217) 337-5584
2506 Galen Drive Ste 104
Champaign IL 61821 
IMPORTANT DISCLOSURES: Investment advice is offered through Belpointe Asset Management, LLC, 125 Greenwich Avenue, Greenwich, CT 06830 (“Belpointe”). Belpointe is an investment adviser registered with the Securities and Exchange Commission (“SEC”). Registration with the SEC should not be construed to imply that the SEC has approved or endorsed qualifications or the services Belpointe Asset Management offers, or that or its personnel possess a particular level of skill, expertise or training. The information provided is educational in nature and not designed to be a recommendation for any specific investment product, strategy, plan feature or other purposes. This is not suggesting a specific course of action or any action at all. Communications such as this are not impartial and are provided in connection with advertising and marketing. Prior to making any investment or financial decisions, an investor should seek individualized advice from a personal financial, legal, tax and other professional advisors that take into account all of the particular facts and circumstances of an investor’s own situation. Insurance products are offered through Belpointe Insurance, LLC. Lewis Wealth Management Group is not an affiliate of Belpointe Asset Management, LLC. Important disclosures related to Belpointe are available at http://www.belpointe.com. Additional information pertaining to Belpointe’s registration status, its business operations, services and fees and its current written disclosure statement is available on the SEC’s Investment Adviser public website at https://www.adviserinfo.sec.gov/.