Weekly Economic Update 4/24/2017

EXISTING HOME SALES HIT A 10-YEAR PEAK

Rising 4.4% for March, resales surpassed expectations – analysts polled by Reuters projected a gain of 2.5%. The National Association of Realtors said that sales were 5.9% improved from a year before, and that put them at their best level since February 2007, even with existing home inventory 6.6% slimmer than in March 2016.1       

CONSTRUCTION ACTIVITY WANES

Department of Commerce data showed a 6.8% reduction in housing starts in March. Even with that fall, starts were up 9.2% in 12 months. Building permits rose 3.6% last month, resulting in a 17.0% annualized increase.2 

LIGHT SWEET CRUDE SLIDES 7% IN 5 TRADING DAYS

WTI crude settled at $49.62 Friday, 7.4% below where it had closed a week earlier. One influence was a Baker Hughes report showing that the number of active rigs had increased for a fourteenth consecutive week.3  

STOCKS END CHOPPY WEEK HIGHER

Five days of rollercoastering ultimately sent the S&P 500 to a 0.85% weekly gain. The Dow Jones Industrial Average and Nasdaq Composite respectively advanced 0.46% and 1.82% in the same stretch. At Friday’s close, the Dow settled at 20,547.76; the S&P, at 2,348.69; and the Nasdaq, at 5,910.52.4  

THIS WEEK: Monday, earnings arrive from Coach, Express Scripts, Halliburton, Hasbro, Kimberly-Clark, Newmont Mining, and T. Rowe Price. The Conference Board’s April consumer confidence index, the February S&P/Case-Shiller home price index, and March new home sales data appear Tuesday, along with earnings from 3M, AT&T, Baker Hughes, Biogen, Capital One, Caterpillar, Chubb, Coca-Cola, Eli Lilly, Fifth Third, Freeport-McMoRan, McDonald’s, Northern Trust, Novartis, and Xerox. On Wednesday, the earnings lineup includes Alaska Air, Amgen, Anthem, Boeing, Credit Suisse, Dr. Pepper Snapple Group, Equifax, GlaxoSmithKline, Hershey, Ingersoll-Rand, Norfolk Southern, O’Reilly Auto Parts, PepsiCo, Procter & Gamble, Rockwell Automation, State Street, and T-Mobile. Earnings from Alphabet, Amazon, American Airlines, Comcast, Dow Chemical, Expedia, Ford Motor Co., MGM Resorts, Microsoft, Parker-Hannifin, Southwest Airlines, Under Armour, and Western Digital all roll out Thursday, complementing reports on initial jobless claims and March durable goods orders and housing contract activity. Exxon Mobil, General Motors, Phillips 66, UBS Group AG, and Weyerhaeuser issue earnings news Friday, as investors also consider the federal government’s first estimate of Q1 growth and the University of Michigan’s final April consumer sentiment index.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +3.97 +14.27 +11.54 +5.85
NASDAQ +9.80 +19.50 +19.40 +13.40
S&P 500 +4.91 +12.30 +14.08 +5.82
REAL YIELD 4/21 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.40% 0.24% -0.24% 2.27%

Sources: wsj.com, bigcharts.com, treasury.gov – 4/21/174,5,6,7

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.

WEEKLY QUOTE             

“Learn how to see. Realize that everything connects to everything else.”     

– Leonardo da Vinci        

WEEKLY TIP             

Poor documentation can be an Achilles heel for a small business. Storing invoices, bank statements, credit notes, and other financial documents in one place is vital, be it a file cabinet or a digital vault.       

WEEKLY RIDDLE           

They can hear you, you can touch them, but they will never see you. What are they?   

Last week’s riddle:

Rick was born on December 4th, yet he claims his birthday always occurs in the summer. How is this possible?   

Last week’s answer:

He was born in the Southern Hemisphere.

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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. 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 and expenses, and cannot be invested into directly. 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 – reuters.com/article/us-usa-economy-housing-idUSKBN17N1QU [4/21/17]

2 – marketwatch.com/story/housing-starts-fall-7-but-permits-pick-up-the-slack-in-march-2017-04-18 [4/18/17]

3 – foxbusiness.com/markets/2017/04/21/oil-ends-under-50-as-signs-rising-us-output-cast-doubts-over-opec-cut-extension.html [4/21/17]

4 – markets.wsj.com/us [4/21/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F21%2F16&x=0&y=0 [4/21/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F21%2F16&x=0&y=0 [4/21/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F21%2F16&x=0&y=0 [4/21/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F20%2F12&x=0&y=0 [4/21/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F20%2F12&x=0&y=0 [4/21/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F20%2F12&x=0&y=0 [4/21/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F20%2F07&x=0&y=0 [4/21/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F20%2F07&x=0&y=0 [4/21/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F20%2F07&x=0&y=0 [4/21/17]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/21/17]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/21/17] 

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