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Weekly Economic Update - 5.21.18

RETAIL SALES RISE ANOTHER 0.3%

April’s advance remained at that level. even with car and truck sales removed. It paled compared to the 0.8% March gain reported by the Department of Commerce, but it matched the consensus forecast of economists surveyed by MarketWatch.1

   

APRIL SAW LESS GROUNDBREAKING

An 11.3% drop for apartment construction set the pace of overall housing starts back 3.7% last month, Department of Commerce data noted.2

   

HOME LOAN RATES REACH 7-YEAR HIGH

According to Freddie Mac, the mean interest rate for a 30-year, fixed-rate mortgage last week was 4.61%. That exceeds any number seen since May 2011. Redfin says that the median existing home sold in April spent only 36 days on the market, a sign that buyers have rushed to close quickly before rates climb higher.3

  

RUSSELL 2000 makes HISTORY

The small-cap benchmark notched its third straight record close on Friday, settling at 1,626,63 and rising 1.23% for the week. Blue chips lost 0.47% in five days, with the Dow Jones Industrial Average slipping to 24,715.09 at Friday’s close. The S&P 500 settled 0.54% lower for the week at 2,712.97, and the Nasdaq Composite lost 0.66% in five days, finishing Friday’s trading session at 7,354.34. Through Friday, the big three were all at least 1% higher for the month. Oil ended the week at $71.35 on the NYMEX.4,5

     

THIS WEEK: Nothing major is scheduled for Monday. Advance Auto Parts, AutoZone, Container Store, Cracker Barrel, Hewlett Packard Enterprise, Intuit, Kohl’s, TJX Companies, Toll Brothers, and Urban Outfitters all present earnings Tuesday. April new home sales figures, minutes from this month’s Federal Reserve policy meeting, and earnings from L Brands, Lowe’s, NetApp, Ralph Lauren, Stein Mart, Target, and Williams-Sonoma attract Wall Street’s attention Wednesday. On Thursday, investors react to earnings news from Best Buy, Gap, Hormel Foods, Lionsgate, Medtronic, Ross Stores, Royal Bank of Canada, Shoe Carnival, Stage Stores, TD Bank, and Toro, along with April existing home sales data and a new initial jobless claims report. Friday, the University of Michigan’s final May consumer sentiment index arrives, along with a report on April durable goods orders and earnings from Foot Locker; additionally, Fed chair Jerome Powell joins a panel discussion at a central banking conference in Sweden.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-0.02

+19.61

+12.19

+8.97

NASDAQ

+6.53

+21.46

+22.04

+19.23

S&P 500

+1.47

+14.68

+12.54

+9.02

REAL YIELD

5/18 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.91%

0.43%

-0.31%

1.36%

 

 


Sources: wsj.com, bigcharts.com, treasury.gov - 5/18/184,5,6,7

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.

 

 

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 - marketwatch.com/economy-politics/calendars/economic [5/18/18]

2 - cnbc.com/2018/05/16/us-housing-starts-april-2018.html [5/16/18]

3 - latimes.com/business/la-fi-high-mortgage-rates-20180517-story.html [5/17/18]

4 - tinyurl.com/y8ao4tbd [5/18/18]

5 - markets.wsj.com/us [5/18/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F18%2F17&x=0&y=0 [5/18/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F18%2F17&x=0&y=0 [5/18/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F18%2F17&x=0&y=0 [5/18/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F17%2F13&x=0&y=0 [5/18/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F17%2F13&x=0&y=0 [5/18/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F17%2F13&x=0&y=0 [5/18/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F19%2F08&x=0&y=0 [5/18/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F19%2F08&x=0&y=0 [5/18/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F19%2F08&x=0&y=0 [5/18/18]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/18/18]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/18/18] 

Weekly Economic Update - 6.25.18

TARIFF TALK INTENSIFIES

Major economic powers proposed additional import taxes last week, as investors wondered if a global trade war was now underway. Monday evening, President Trump stated that he had instructed U.S. Trade Representative Robert Lighthizer to identify another $200 billion of Chinese products to subject to a new 10% import duty. Shortly before the trading week began, the European Union proclaimed it would place import taxes on $3.3 billion of U.S. products, in retaliation to recently imposed metals tariffs. Friday, President Trump mulled imposing a 20% tax on autos arriving from the E.U. unless it lifts such import duties.1,2

   

EXISTING HOME SALES WEAKEN SLIGHTLY

A National Association of Realtors report says that sales tapered off 0.4% in May. While the inventory of homes listed grew 2.8% in the fifth month of the year, the median price of an existing home hit an all-time peak of $264,800. The sales pace was 3.0% slower than in May 2017.3

   

HOUSING STARTS RISE, BUT PERMITS FALL

While home sales were nearly flat last month, groundbreaking increased 5.0% according to the Census Bureau. Its latest report on U.S. residential construction also noted a 4.6% drop in building permits, far exceeding the decline seen in April.4

  

BLUE CHIPS SHED 2%

To be precise, the Dow Jones Industrial Average lost 2.03% last week, sinking to 24,580.89 at Friday’s close even with a 119-point Friday gain. Faring better, the Nasdaq Composite retreated 0.69% to 7,692.82 in the same time frame, while the S&P 500 declined 0.89% to 2,754.88.5

     

THIS WEEK: Investors react to May new home sales data and Q2 earnings from Carnival on Monday. The Conference Board’s June consumer confidence index appears Tuesday, along with the latest S&P CoreLogic Case-Shiller home price index and earnings from Lennar and Sonic. On Wednesday, Wall Street considers the NAR’s May index of housing contract activity, May durable goods orders, and earnings from Bed Bath & Beyond, General Mills, Paychex, and Rite Aid. Thursday, the third estimate of Q1 economic growth arrives, along with the latest initial claims figures and earnings announcements from Accenture, ConAgra Brands, KB Home, Nike, and Walgreens Boots Alliance. May personal spending data, the May PCE price index, and the final June University of Michigan consumer sentiment index emerge Friday, plus earnings from Constellation Brands.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-0.56

+14.88

+13.22

+10.76

NASDAQ

+11.44

+23.35

+25.83

+22.25

S&P 500

+3.04

+13.16

+14.60

+10.90

REAL YIELD

6/22 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.78%

0.46%

0.59%

1.75%

 

 


Sources: wsj.com, bigcharts.com, treasury.gov - 6/22/185,6,7,8

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 - npr.org/2018/06/18/621227483/trump-asks-for-200-billion-more-in-tariffs-to-impose-on-china [6/18/18]

2 - fortune.com/2018/06/22/trump-tariffs-european-cars/ [6/22/18]

3 - briefing.com/Investor/Calendars/Economic/Releases/exist.htm [6/22/18]

4 - investing.com/economic-calendar/ [6/19/18]

5 - markets.wsj.com/us [6/22/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F22%2F17&x=0&y=0 [6/22/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F22%2F17&x=0&y=0 [6/22/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F22%2F17&x=0&y=0 [6/22/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F21%2F13&x=0&y=0 [6/22/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F21%2F13&x=0&y=0 [6/22/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F21%2F13&x=0&y=0 [6/22/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F23%2F08&x=0&y=0 [6/22/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F23%2F08&x=0&y=0 [6/22/18]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F23%2F08&x=0&y=0 [6/22/18]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/22/18]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/22/18]  

Raymond Lussier 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. Financial Advisors Network is not affiliated with USA Financial Securities.

Raymond Lussier is authorized to transact securities-related business and investment advisory services only in states where he is properly registered. For investment products and services these states include: CA, FL, MA, ME, NH, OH, SC. For investment advisory services these states include: CA, FL, IL, MA, ME, NC. NH, OH. Clients who are not residents of these states cannot be serviced. This website is not intended to provide investment, legal, or tax advice, nor to effect securities transactions or to render personal advice for compensation.

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