Growth Report for Monday, August 4, 2014

SUSTAINED HIRING, RENEWED CONFIDENCE
In July, 209,000 Americans found new jobs. Hiring topped 200,000 for a sixth straight month, which hasn’t happened in 17 years according to Labor Department data. The jobless rate ticked up to 6.2% and the underemployment (U-6) rate inched up to 12.2%, but that signaled more jobseekers. June also saw a 0.4% boost in consumer spending and incomes. The Conference Board’s July consumer confidence survey came in at an impressive 90.9, while the University of Michigan’s final July consumer sentiment index advanced to 81.8.1,2

TERRIFIC Q2 GDP, ISM INDEX RISES; FED STAYS COURSE
America’s economy expanded 4.0% in Q2. That was the first estimate from the Bureau of Economic Analysis, which also revised Q1 GDP upward last week to -2.1%. The Institute for Supply Management’s manufacturing PMI increased 1.8 points to a mark of 57.1 in July. As expected, the Federal Reserve announced it would cut monthly asset purchases to $25 billion in its July 30 policy statement.2,3

TWO TEPID HOUSING INDICATORS
May’s S&P/Case-Shiller home price index showed a 9.3% overall annual advance in house prices – nice, but down notably from the 10.8% yearly gain in the April edition. The National Association of Realtors said pending home sales slipped 1.1% in June, a disappointment after the 6.0% rise in May.2

WALL STREET JITTERS SEND STOCKS INTO THE RED
Argentina’s second debt default in 13 years, middling earnings, the slow fade of QE3 – it was too much for investors to take last week. In 5 days, the Dow dipped 2.75% to 16,493.37, the S&P 500 2.69% to 1,925.15 and the Nasdaq 2.18% to 4,352.64.4

THIS WEEK: Monday offers earnings from DISH Network, Loews, Marathon Oil, Hillshire Brands, Jamba, Michael Kors, Sempra Energy and Scripps Networks. Tuesday brings ISM’s July services PMI, China’s July PMI, and data on July factory orders; earnings arrive from Archer-Daniels-Midland, CVS, Toyota, Cablevision, Coach, Activision Blizzard, Rosetta Stone, Vulcan Materials, Motorola, Office Depot, Papa John’s, Emerson and First Solar. Wednesday sees earnings from AOL, Health Net, Jack in the Box, Keurig Green Mountain, Dunn & Bradstreet, Ralph Lauren, Starwood Properties, Symantec, Transocean, Time Warner, Red Lion Hotels, Viacom, Molson Coors, Novatel, Zulily, Prudential Financial and Parker-Hannifin. Thursday, earnings from CBS, Monster, Chiquita Brands, DeVry, ConEdison, Lions Gate, Orbitz, Wendy’s, News Corp., Mitel, Zynga, Nvidia and Manulife arrive, plus fresh initial claims figures. Friday, data on June wholesale inventories is published.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -0.50 +5.54 +15.97 +6.20
NASDAQ +4.22 +18.42 +24.00 +13.00
S&P 500 +4.15 +12.79 +18.99 +7.40
REAL YIELD 8/1 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.25% 0.48% 1.71% 2.00%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 8/1/144,5,6,7
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

WEEKLY QUOTE

“I will love the light for it shows me the way, yet I will endure the darkness for it shows me the stars.”

– Og Mandino

WEEKLY TIP

If your kids are under age 18 and work for you, you can deduct their wages as a business expense, but you must submit a W-2 form and follow withholding rules for each child. Pay them in cash, and track their hours via time sheets and payroll records.

WEEKLY RIDDLE

Fill in the blank: if Ruby’s mom is Patricia, then Patricia is the ____ of Ruby’s mother.

Last week’s riddle:
A father tells his young son, “I will pay you $6.00 per hour for the 6 seconds you took to wash your hands before dinner.” So how much does the boy earn for these 6 seconds of effort?

Last week’s answer:
One cent. At a rate of $6 paid per 60 minutes, $6 divided by 60 works out to 10¢ a minute. Six seconds is one-tenth of a minute, so the boy earns 1¢.

Citations.
1 – marketwatch.com/story/us-adds-209000-jobs-in-july-to-keep-hot-streak-intact-2014-08-01 [8/1/14]
2 – marketwatch.com/economy-politics/calendars/economic [8/1/14]
3 – briefing.com/investor/markets/stock-market-update/2014/7/30/q2-gdp-beats-small-caps-rally-and-fed-tapers-again.htm [7/30/14]
4 – markets.wsj.com/us [8/1/14]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F1%2F13&x=0&y=0 [8/1/14]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F1%2F13&x=0&y=0 [8/1/14]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F1%2F13&x=0&y=0 [8/1/14]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F31%2F09&x=0&y=0 [8/1/14]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%31F2%2F09&x=0&y=0 [8/1/14]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F31%2F09&x=0&y=0 [8/1/14]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F2%2F04&x=0&y=0 [8/1/14]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F2%2F04&x=0&y=0 [8/1/14]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F2%2F04&x=0&y=0 [8/1/14]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/1/14]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/1/14]

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. 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. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. 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. This material was prepared by MarketingLibrary.Net Inc., for Mark Lund, The 401k Advisor, Investor Coach and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. an independent, fee-only, Registered Investment Advisor firm providing 401k consulting for small businesses and private investment management services for professional athletes and select individuals. Stonecreek is located in Salt Lake City, Murray, West Jordan, Sandy, Draper, South Jordan, Provo, Orem, Lehi, Highland, Alpine, American Fork all in Utah.

Category: Blog, Growth Report