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Weekly Economic Update - 12.11.17

ANOTHER MONTH OF SOLID HIRING

According to the Department of Labor, the U.S. workforce gained 228,000 more jobs than it lost during November. Annualized wage growth improved from 2.5% to 2.7%. The headline jobless rate held at 4.1% last month, while the U-6 rate, that includes the underemployed, ticked up a tenth of a percent to 8.0%. Even though October’s net job gain was revised down to 244,000, October-November 2017 represents the best two-month hiring period in more than a year.1,2

  

ISM INDEX MISSES EXPECTATIONS

The Institute for Supply Management’s gauge of service sector activity fell 2.7 points to a still-impressive reading of 57.4 in November. Economists polled by Briefing.com expected a retreat, albeit a lesser one: they projected a reading of 59.3.2

  

A SMALL DECLINE FOR CONSUMER SENTIMENT

There was just a bit less optimism in households in early December, at least by the measure of the University of Michigan’s twice-monthly Surveys of Consumers. The preliminary December edition of the university’s consumer sentiment index fell 1.7 points from its final November reading to a mark of 96.8.2

  

TWO OF THREE MAJOR INDICES RISE

Once again, the Nasdaq Composite gave up ground across five trading sessions while the S&P 500 and Dow Jones Industrial Average advanced. The tech benchmark lost only 0.11% last week on its way to a 6,840.08 Friday close. The same stretch brought gains of 0.40% for the Dow and 0.35% for the S&P; their respective Friday settlements were 24,329.16 and 2,651.50. Dropping 16.19% last week, the CBOE VIX volatility gauge went back under 10, closing Friday at 9.58. Settling at 1,521.72 Friday, the small-cap Russell 2000 lost 1.00% for the week.3

      

THIS WEEK: Casey’s General Stores announces Q3 earnings Monday. Tuesday, the November Producer Price Index comes out, and Verifone presents Q3 results. The Federal Reserve is widely expected to raise the benchmark interest rate Wednesday; the November Consumer Price Index also appears for Wall Street’s consideration. Thursday brings federal government reports on initial jobless claims and November retail sales, plus earnings from Costco and Jabil Circuit. A Federal Reserve report on November industrial output arrives Friday.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+23.11

+24.03

+16.99

+7.86

NASDAQ

+27.07

+26.26

+25.94

+15.28

S&P 500

+18.43

+18.04

+17.40

+7.62

REAL YIELD

12/8 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.50%

0.45%

-0.86%

1.86%

 

 


Sources: wsj.com, bigcharts.com, treasury.gov - 12/8/173,4,5,6

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.

 

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.  The Russell 2000 measures the performance of approximately 2000 small-cap companies in the Russell 3000 Index, which is made up of 3000 of the biggest U.S. stocks. The CBOE Volatility Index® (VIX® Index®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. The 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 - fortune.com/2017/12/08/november-job-report-unemployment-rate/ [12/8/17]

2 - briefing.com/investor/calendars/economic/ [12/8/17]

3 - markets.wsj.com/us [12/8/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F8%2F16&x=0&y=0 [12/8/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F8%2F16&x=0&y=0 [12/8/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F8%2F16&x=0&y=0 [12/8/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F7%2F12&x=0&y=0 [12/8/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F7%2F12&x=0&y=0 [12/8/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F7%2F12&x=0&y=0 [12/8/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F7%2F07&x=0&y=0 [12/8/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F7%2F07&x=0&y=0 [12/8/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F7%2F07&x=0&y=0 [12/8/17]

5 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/8/17]

6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/8/17]

 

 

Weekly Economic Update - 11.27.17

CONSUMER SENTIMENT DECLINES FOR NOVEMBER

The University of Michigan’s monthly gauge of how households perceive current and future economic conditions ended the month at a mark of 98.5. Compared to the 100.7 final October reading, this was a disappointment. Still, the index was up 5.0 points year-over-year. Richard Curtin, the economist in charge of the consumer survey, noted that the index has hovered near “the highest levels since 2004” since January.1

  

HOME BUYING GETS A FALL BOOST

Existing home sales rose 2.0% in October, surpassing the consensus 0.7% gain forecast by analysts polled by Investing.com. Elsewhere in its latest monthly report, the National Association of Realtors revised September’s minor advance in home buying down to 0.4%.2

  

LEADING INDICATORS TAKE A MAJOR LEAP

After a decline of 0.2% in September, the Conference Board’s index of leading economic indicators soared 1.2% for October. This was double the gain forecast in a Reuters survey of economists. This surge in the 10-component index may signal an impressive fourth quarter.3

  

A NEW MILESTONE FOR A MARKET BENCHMARK

Stocks regained their momentum in time for Thanksgiving. During an abbreviated trading week, the S&P 500 settled above 2,600 for the first time, closing at 2,602.42 Friday and going +0.93% across three-and-a-half days. Weekly gains also came for the Nasdaq Composite (1.57%) and the Dow Jones Industrial Average (0.86%); the Nasdaq finished the week at 6,889.16; the Dow, at 23,557.99. The Nasdaq was up 5.07% month-over-month as of Friday’s closing bell.4,5

      

THIS WEEK: Monday, the Census Bureau presents data on October new home sales. The latest S&P/Case-Shiller home price index and the October Conference Board consumer confidence index both appear Tuesday. On Wednesday, Federal Reserve chair Janet Yellen testifies on the U.S. economic outlook in Congress, and investors also consider the second federal government take on Q3 GDP, a new Fed Beige Book, and the NAR’s latest pending home sales index. October personal spending data, the October PCE price index, and a new initial unemployment claims report arrive Thursday. The Institute for Supply Management releases its November snapshot of the U.S. factory sector Friday.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+19.20

+23.00

+16.22

+8.15

NASDAQ

+27.98

+27.60

+26.44

+16.53

S&P 500

+16.24

+17.58

+16.94

+8.06

REAL YIELD

11/24 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.50%

0.47%

-0.72%

1.63%

 

 


Sources: wsj.com, bigcharts.com, treasury.gov - 11/24/175,6,7,8

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.

 

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 - sca.isr.umich.edu/ [11/22/17]

2 - investing.com/economic-calendar/existing-home-sales-891 [11/22/17]

3 - cnbc.com/2017/11/20/october-leading-indicators-index.html [11/20/17]

4 - finance.google.com/finance?q=INDEXSP%3A.INX&ei=02cYWuG2DYfSjAHDvqqQDA [11/24/17]

5 - markets.wsj.com/us [11/24/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F25%2F16&x=0&y=0 [11/24/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F25%2F16&x=0&y=0 [11/24/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F25%2F16&x=0&y=0 [11/24/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F23%2F12&x=0&y=0 [11/24/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F23%2F12&x=0&y=0 [11/24/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F23%2F12&x=0&y=0 [11/24/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F23%2F07&x=0&y=0 [11/24/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F23%2F07&x=0&y=0 [11/24/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F23%2F07&x=0&y=0 [11/24/17]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/24/17]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/24/17]

Gerald Hanifan is an investment adviser representative of, and securities and advisory services are offered through, USA Financial Securities Corp., Member FINRA/SIPC. www.finra.org A Registered Investment Adviser located at 6020 E. Fulton St., Ada, MI 49301. Estate Planning Center is not affiliated with USA Financial Securities.

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