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Weekly Economic Update - 5.22.17

CONSTRUCTION ACTIVITY SLOWED IN APRIL

Against expectations, both housing starts and building permits declined in the fourth month of the year. Newly released Census Bureau data shows a 2.5% retreat for permits and a 2.6% pullback for starts last month. The key factors: a 9.2% drop in starts for multi-family projects (which have declined for four straight months) and a 4.5% fall for single-family permits.1

       

INDUSTRIAL OUTPUT SURGES

Economists polled by Briefing.com expected industrial production to rise 0.3% in April, following a 0.4% advance in March. The number surprised to the upside – the Federal Reserve reported a 1.0% improvement.2

 

GOLD & WTI CRUDE STAGE MAJOR RALLIES

As both stocks and the dollar hit a rough patch last week, investors turned to commodities. Gold advanced 2.1% on the COMEX in five trading days, settling at $1,253.60 Friday. Oil gained a little more than 5% for the week to a Friday close of $50.33 on the belief that OPEC would extend its current production cut.3,4

  

STOCKS FINISH A CHOPPY WEEK LOWER

Wall Street took a plunge Wednesday on political concerns, then rebounded for two days. Still, all three major indices saw 5-day retreats. The Nasdaq Composite lost 0.61%; the Dow Jones Industrial Average, 0.44%; and the S&P 500, 0.38%. Friday, the big three settled as follows: Dow, 20,804.84; S&P, 2,381.73; Nasdaq, 6,083.70.5

 

THIS WEEK: On Monday, earnings results roll in from Agilent Technologies, America’s Car-Mart, Booz Allen Hamilton, Sportsman’s Warehouse, and Valspar. Tuesday, the April new home sales report complements earnings news from AutoZone, Container Store, Cracker Barrel Old Country Store, DSW, Intuit, Kirkland’s, Popeyes, Take-Two Interactive, and Toll Brothers. On Wednesday, existing home sales numbers appear along with minutes from this month’s Federal Reserve policy meeting and earnings from Advance Auto Parts, Chico’s FAS, Fred’s, Guess?, HP, Lowe’s, Sears Holdings, and Williams-Sonoma. A new initial claims report arrives Thursday, plus earnings news from Abercrombie & Fitch, Best Buy, Burlington Stores, Costco, Dollar Tree, GameStop, Hormel Foods, Lions Gate, Medtronic, Shoe Carnival, and Toro. Friday offers the second estimate of first quarter GDP, the final May University of Michigan consumer sentiment index, data on April hard goods orders, and Q1 results from Big Lots. 

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+5.27

+19.33

+13.64

+5.35

NASDAQ

+13.01

+29.10

+23.79

+13.78

S&P 500

+6.38

+16.75

+16.78

+5.64

REAL YIELD

5/19 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.41%

0.29%

-0.39%

2.46%

 

 


Sources: wsj.com, bigcharts.com, treasury.gov - 5/19/175,6,7,8

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 - businessinsider.com/us-housing-starts-and-building-permits-fall-in-april-2017-5 [5/16/17]

2 - briefing.com/investor/calendars/economic/2017/05/15-19 [5/19/17]

3 - marketwatch.com/story/gold-prices-climb-more-than-2-for-the-week-2017-05-19 [5/19/17]

4 - marketwatch.com/story/oil-prices-score-a-more-than-5-advance-for-the-week-2017-05-19 [5/19/17]

5 - markets.wsj.com/us [5/19/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F19%2F16&x=0&y=0 [5/19/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F19%2F16&x=0&y=0 [5/19/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F19%2F16&x=0&y=0 [5/19/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F18%2F12&x=0&y=0 [5/19/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F18%2F12&x=0&y=0 [5/19/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F18%2F12&x=0&y=0 [5/19/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F18%2F07&x=0&y=0 [5/19/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F18%2F07&x=0&y=0 [5/19/17]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F18%2F07&x=0&y=0 [5/19/17]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/19/17]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/19/17]  

 

Weekly Economic Update - 5.15.17

A SOLID RETAIL SALES READING

Americans bought more in April. The pace of retail purchases hastened by 0.4% last month, and the Bureau of Economic Analysis revised the 0.2% March retreat into a 0.1% gain. Headline retail sales were up 4.5% across the 12 months ending in April. Core retail sales rose 0.3% in the fourth month of the year.1,2

   

INFLATION PICKS UP AS SPRING ARRIVES

After falling 0.3% for March, the Consumer Price Index rose 0.2% last month. (The major factor: a 1.1% leap for energy costs.) This increase left annualized inflation at 2.2%. The core CPI (minus food and energy prices) advanced 0.1% in April. On the wholesale front, the Producer Price Index jumped up 0.5% in April, taking its year-over-year advance to 2.5%.1,2

 

A GAIN FOR A CONSUMER SENTIMENT INDEX

The University of Michigan’s monthly barometer of household sentiment rose 0.7 points in its preliminary May reading to a mark of 97.7. Its consumer expectations component advanced 1.1 points to a reading of 88.1.2

  

MAJOR INDICES RIDE THROUGH A MIXED WEEK

Earnings misses from big retailers weighed on the S&P 500, which declined 0.35% across five trading sessions to a 2,390.90 Friday close. The Dow Jones Industrial Average gave back 0.53% in the same time frame, ending the week at 20,896.61. The Nasdaq Composite, however, advanced 0.34% last week to 6,121.23. At the closing bell Friday, all three indices were up 2.1% or more for the month.3

 

THIS WEEK: Monday, Cumulus Media presents Q1 results. Dick’s Sporting Goods, Home Depot, Jack in the Box, Red Robin, Staples, TJX Companies, Urban Outfitters, and Weibo announce earnings Tuesday, as investors also consider data on April industrial output, housing starts, and building permits. On Wednesday, the earnings parade features American Eagle Outfitters, Cisco, L Brands, Stein Mart, and Target. Thursday, Wall Street looks at the Department of Labor’s latest initial jobless claims numbers, the Conference Board’s April leading indicators index, and earnings from Alibaba, Applied Materials, Autodesk, Gap, Perry Ellis, Ralph Lauren, Ross Stores, Stage Stores, and Walmart. Earnings announcements from Campbell Soup, Deere, and Foot Locker arrive Friday.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+5.74

+17.92

+12.60

+5.68

NASDAQ

+13.71

+29.21

+21.73

+13.89

S&P 500

+6.79

+15.83

+15.33

+5.88

REAL YIELD

5/12 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.49%

0.15%

-0.28%

2.30%

 

 


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

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. 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 - thestreet.com/story/14132954/1/s-amp-p-500-dow-decline-after-retail-sales-rebound-buoys-rate-hike-odds.html [5/12/17]

2 - investing.com/economic-calendar/ [5/12/17]

3 - markets.wsj.com/us [5/12/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F12%2F16&x=0&y=0 [5/12/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F12%2F16&x=0&y=0 [5/12/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F12%2F16&x=0&y=0 [5/12/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F11%2F12&x=0&y=0 [5/12/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F11%2F12&x=0&y=0 [5/12/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F11%2F12&x=0&y=0 [5/12/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F11%2F07&x=0&y=0 [5/12/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F11%2F07&x=0&y=0 [5/12/17]

4 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F11%2F07&x=0&y=0 [5/12/17]

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

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

Terry and Jason Sustar are investment adviser representatives 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. Sustar Financial Group is not affiliated with USA Financial Securities.

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