SOLID GAINS In CONSUMER SPENDING, CONFIDENCE
Personal spending rose 0.4% in May, according to the Department of Commerce, complemented by a 0.2% advance for personal incomes. April’s consumer spending increase was revised up to 1.1%. The Conference Board’s monthly consumer confidence index also improved in June, heading north 5.6 points to a reading of 98.0.1
BEST ISM MANUFACTURING PMI in 16 Months
The factory purchasing manager index, maintained by the Institute for Supply Management, reached 53.2 in June, a gain of 1.9 points to its highest reading since February 2015. As recently as February of this year, the PMI was below the 50 level, demarcating growth from contraction. In other news concerning economic output, the federal government revised Q1 GDP up 0.3% to a final estimate of 1.1% last week.1,2
HOUSING CONTRACT ACTIVITY SLOWS
The National Association of Realtors reported a dip in pending home sales: they declined 3.7% in May. Turning to other housing news, the 20-city composite Case-Shiller home price index showed a 5.4% annualized gain in its April edition, ticking down from 5.5% in March.1
STOCKS REBOUND IMPRESSIVELY
Recovering in the wake of the Brexit vote, Wall Street had its best week of 2016. In fact, the S&P 500 recorded its best week since last November, adding 3.22% in five trading days to take the index positive year-over-year. The Dow Jones Industrial Average advanced 3.15% for the week; the Nasdaq Composite, 3.28%. The big three settled Friday as follows: DJIA, 17,949.37; NASDAQ, 4,862.57; S&P, 2,102.95. Gold futures closed Friday at $1,339.00 on the COMEX. Light sweet crude ended the trading week at $48.99 on the NYMEX.3
THIS WEEK: Monday is Independence Day: Wall Street is closed for trading. Nothing major is slated for Tuesday. ISM’s service sector PMI arrives Wednesday, along with minutes from the June Federal Reserve policy meeting and earnings from Walgreens Boots Alliance. Thursday, the June Challenger job-cut report and June ADP employment report both appear; plus, earnings from Barracuda Networks, PepsiCo, and WD-40. Friday, the Department of Labor issues its latest jobs report.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||7/1 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.03%||0.48%||0.75%||2.54%|
Sources: wsj.com, bigcharts.com, treasury.gov – 7/1/164,5,6,7
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.
“Not the power to remember, but its very opposite, the power to forget, is a necessary condition for our existence.”
– Sholem Asch
How large should an emergency fund be? Large enough to cover at least three months of expenses in cash. In fact, building your emergency fund to twice that size is a worthy goal.
How can you make a sofa, a motorcycle, and a tent liquid?
Last week’s riddle:
When is L greater than XL?
Last week’s answer:
When it is a Roman numeral.
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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 – investing.com/economic-calendar/ [7/1/16]
2 – instituteforsupplymanagement.org/ismreport/mfgrob.cfm [7/1/16]
3 – cnbc.com/2016/07/01/us-markets.html [7/1/16]
4 – markets.wsj.com/us [7/1/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F1%2F15&x=0&y=0 [7/1/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F1%2F15&x=0&y=0 [7/1/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F1%2F15&x=0&y=0 [7/1/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F1%2F11&x=0&y=0 [7/1/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F1%2F11&x=0&y=0 [7/1/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F1%2F11&x=0&y=0 [7/1/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F30%2F06&x=0&y=0 [7/1/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F30%2F06&x=0&y=0 [7/1/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F30%2F06&x=0&y=0 [7/1/16]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/1/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/1/16]