Weekly Economic Update for October 19th

Jeff Biro Presents: WEEKLY ECONOMIC UPDATE

WEEKLY QUOTE
“When you make a mistake, there are only three things you should ever do about it: admit it, learn from it, and don’t repeat it.”
– Paul “Bear” Bryant

WEEKLY TIP
A distribution from your workplace retirement plan before age 59½ is usually a bad idea. In most instances, it comes with an early withdrawal penalty of 10%. It also sets back your retirement saving effort.

WEEKLY RIDDLE
Until it is measured it is not accurately known, yet you may miss it when it has flown. What is it?

October 19, 2015

A SURPRISE: HOUSEHOLD OPTIMISM RISES
Even after a bad month for stocks and numerous negative headlines, the University of Michigan’s preliminary October consumer sentiment index showed notable improvement. It came in at 92.1, up 4.9 points from its final September reading. Analysts surveyed by MarketWatch expected an initial October reading of 88.5.1

A MILD SEPTEMBER INCREASE FOR RETAIL SALES
Census Bureau data showed just 0.1% greater purchases of discretionary and luxury goods last month. Minus auto buying, retail sales retreated 0.3%.2

DID INFLATION PICK UP IN SEPTEMBER?
By the measure of the core Consumer Price Index, yes – the core CPI rose 0.2% last month. The headline CPI retreated 0.2%, however. The Producer Price Index fell 0.5% in September; economists polled by MarketWatch forecast a 0.2% decline.1

WEAK INDICATORS ENCOURAGE BULLS
Investors eyed the latest inflation and retail sales readings and saw little chance of an October Federal Reserve rate hike. The S&P 500 had another winning week, gaining 0.90% to 2,033.11. The Dow added 0.77% last week settle at 17,215.97 on Friday; the Nasdaq rose 1.16%, wrapping up the week at 4,886.69.3

THIS WEEK: On Monday, Broadcom, Halliburton, Hasbro, HealthStream, IBM, Lennox, Morgan Stanley, Six Flags Entertainment, and Sonic all present earnings. The Census Bureau announces September housing starts and building permits Tuesday, complementing earnings from BoNY Mellon, Brinker International, Chipotle, Chubb, Discover, Fifth Third, Harley Davidson, Lockheed Martin, Yahoo!, Travelers, and Verizon. More earnings appear Wednesday: Abbott Labs, Citrix, Allegiant Air, American Express, Ameriprise Financial, Biogen, Boeing, Coca-Cola, Callaway Golf, CoreLogic, Dolby Labs, Equifax, General Motors, Kaiser Aluminum, Kimberly-Clark, Manpower Group, Piper Jaffray, Raymond James, St. Jude Medical, SanDisk, Supervalu, Texas Instruments, Tupperware, and Unisys. Thursday offers NAR’s September existing home sales report, initial claims numbers and earnings from 3M, Alaska Air, Alphabet, Amazon, AT&T, Boise Cascade, Cabela’s, E*Trade, Capital One, Caterpillar, Dow Chemical, Dr. Pepper Snapple, Dunkin’ Brands, Eastman Kodak, Eli Lilly, McDonald’s, Microsoft, Netgear, Parker-Hannifin, Pandora, Pulte Group, QLogic, Raytheon, Ryder, Sirius XM, Skechers, Snap-On, Southwest Airlines, Stanley Black & Decker, T. Rowe Price, Under Armour, Verisign, and Union Pacific. Friday, American Airlines, State Street, BNC Bancorp, Lear, Popular, Procter & Gamble, Royal Caribbean, and Whirlpool announce earnings.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -3.41 +6.82 +11.12 +6.64
NASDAQ +3.18 +15.87 +19.59 +13.60
S&P 500 -1.25 +9.08 +14.57 +7.08
REAL YIELD 10/16 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.56% 0.28% 0.50% 1.94%

Sources: wsj.com, bigcharts.com, treasury.gov – 10/16/154,5,6,7
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.

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Last week’s riddle:
What has hundreds or even thousands of ears but hears absolutely nothing?
Last week’s answer:
A cornfield.

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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.

Citations.
1 – marketwatch.com/economy-politics/calendars/economic [10/16/15]
2 – briefing.com/investor/calendars/economic/2015/10/12-16 [10/16/15]
3 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [10/16/15]
4 – markets.wsj.com/us [10/16/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F16%2F14&x=0&y=0 [10/16/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F16%2F14&x=0&y=0 [10/16/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F16%2F14&x=0&y=0 [10/16/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F15%2F10&x=0&y=0 [10/16/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F15%2F10&x=0&y=0 [10/16/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F15%2F10&x=0&y=0 [10/16/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F17%2F05&x=0&y=0 [10/16/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F17%2F05&x=0&y=0 [10/16/15]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F17%2F05&x=0&y=0 [10/16/15]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/16/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/16/15]