Two SIGNS OF A STRONGER ECONOMY
Retail sales improved 0.6% in June, according to the Commerce Department, and the core gain was 0.7% with auto buying and home improvement purchases factored out. Industrial production rose 0.6% in June, making up for a 0.3% May loss. Both indicators could be taken as hints of solid second-quarter growth.1
CORE INFLATION IS OUTPACING HEADLINE INFLATION
In the year ending in June, the headline Consumer Price Index increased just 1.0%. According to the Department of Labor, the average 12-month gain in the past decade is 1.7%. The yearly gain in the core CPI, however, was 2.3% in June; it has averaged 1.9% in the past 10 years. June also saw a 0.5% gain for the Producer Price Index.1,2
SENTIMENT INDEX FALLS 4 POINTS
The drop in the University of Michigan’s monthly consumer sentiment index seemed to reflect anxiety over the Brexit vote; 24% of households with upper-tier incomes cited it in their survey responses. The preliminary July edition of the index came in at 89.5, down from the final June mark of 93.5. Economists polled by MarketWatch had anticipated a 92.5 reading.3
MAJOR INDICES KEEP CLIMBING
Less than a month after the Brexit vote disrupted global markets, both the Dow and S&P 500 reached historic peaks. Across five trading days, the Dow rose 2.04% to a new record close of 18,516.55. The S&P 500 and Nasdaq, respectively, advanced 1.49% and 1.47% for the week to Friday settlements of 2,161.74 and 5,029.59. The S&P closed at four straight all-time highs Monday through Thursday.4,5
THIS WEEK: Bank of America, Charles Schwab, Hasbro, IBM, J.B. Hunt, Netflix, and Yahoo! all present earnings Monday. Tuesday, investors will review June housing starts and building permits and earnings from Discover, Goldman Sachs, Johnson & Johnson, Lockheed Martin, Microsoft, Philip Morris International, Regions Financial, TD Ameritrade, United Continental Holdings, and UnitedHealth. Wednesday, earnings emerge from Abbott Labs, American Express, eBay, Halliburton, IMAX, Intel, Mattel, Morgan Stanley, Newmont Mining, Qualcomm, Raymond James, St. Jude Medical, and United Rentals. Thursday, Wall Street looks at June existing home sales plus earnings from Alaska Air, AT&T, BONY Mellon, Biogen, Boise Cascade, Chipotle, DISH Network, Domino’s, Dunkin’ Brands, E*TRADE, General Motors, PayPal, Quest Diagnostics, Sherwin-Williams, Skechers, Southwest Airlines, Starbucks, Travelers, Union Pacific, and VISA. American Airlines, GE, Honeywell International, and Whirlpool report earnings Friday.
|% CHANGE||Y-T-D||1-YR CHG||5-YR AVG||10-YR AVG|
|REAL YIELD||7/15 RATE||1 YR AGO||5 YRS AGO||10 YRS AGO|
|10 YR TIPS||0.11%||0.52%||0.61%||2.50%|
Sources: wsj.com, bigcharts.com, treasury.gov – 7/15/164,6,7,8
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.
“The only way most people recognize their limits is by trespassing on them.”
– Tom Morris
Young adults who consider debt consolidation should weigh the pros and cons of the idea. Lower monthly payments might free up more cash for saving and investing. Extending a credit card balance for decades, though, may cost a borrower much more in the long run.
Can you name three consecutive days without using the words Monday, Tuesday, Wednesday, Thursday, Friday, Saturday, or Sunday?
Last week’s riddle:
At times I’m high and low, I never fly but I can rise, and I can creep between your toes. What am I?
Last week’s answer:
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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 tracded 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/ [7/15/16]
2 – cnbc.com/2016/07/15/us-consumer-price-index-june-2016.html [7/15/16]
3 – marketwatch.com/story/rich-americans-say-they-were-rattled-by-brexit-driving-consumer-sentiment-lower-in-july-2016-07-15/ [7/15/16]
4 – markets.wsj.com/us [7/15/16]
5 – usatoday.com/story/money/markets/2016/07/15/stocks-dow-friday/87121654/ [7/15/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F15%2F15&x=0&y=0 [7/15/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F15%2F15&x=0&y=0 [7/15/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F15%2F15&x=0&y=0 [7/15/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F15%2F11&x=0&y=0 [7/15/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F15%2F11&x=0&y=0 [7/15/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F15%2F11&x=0&y=0 [7/15/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F14%2F06&x=0&y=0 [7/15/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F14%2F06&x=0&y=0 [7/15/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F14%2F06&x=0&y=0 [7/15/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/15/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/15/16]