Growth Report for Monday, September 22, 2014

INFLATION TOOK A HOLIDAY IN AUGUST
Consumer prices fell 0.2% last month while producer prices stayed flat. Wall Street didn’t mind the dip in the Consumer Price Index – it saw less impetus for the Federal Reserve to alter its stance on interest rates. In its latest policy statement, the Fed reiterated its intent to keep the federal funds rate at a historically low level “for a considerable time after” it stops easing. The central bank is still on track to wrap up QE3 after its October policy meeting. Economists surveyed by MarketWatch expected no change in either the Consumer Price Index or the Producer Price Index for August.1,2

A DOWNTURN IN GROUNDBREAKING
Why did housing starts drop 14.4% last month, with building permits down 5.6% as well? Census Bureau data showed an August decline in multi-family projects. Apartment construction accelerated 51% in July alone and is up 19.2% in the past year. Groundbreaking for single-family homes was only down 2.4% in August and remains up 4.2% year-over-year.3

MINOR ADVANCE FOR LEADING INDICATORS
The Conference Board’s leading economic index showed a 0.2% gain for August after increases of 1.1% in July and 0.7% in June. In the words of CB economist Ken Goldstein, the smaller advance implies that the economy “is continuing to gain traction, but most likely won’t repeat its stellar second quarter performance in the second half.”4

STATUS QUO GOOD FOR STOCKS
The Federal Open Market Committee stayed the course last week and Scotland stayed part of Great Britain (and NATO and the European Union). Those headlines helped U.S. benchmarks record the following weekly gains: S&P 500, 1.25% to 2,010.40; DJIA, 1.72% to 17,279.74; NASDAQ, 0.27% to 4,579.79.5

THIS WEEK: Monday, Wall Street looks at the latest data on existing home sales and earnings from AutoZone. Tuesday, key September PMIs for China and the eurozone appear, accompanying earnings news from Bed Bath & Beyond and Carnival. The Census Bureau’s August report on new home sales comes out on Wednesday along with earnings from KB Home and Accenture. Thursday, the Street will consider August durable goods data, initial jobless claims numbers and quarterly results from Nike. The last estimate of Q2 GDP arrives from Washington on Friday, along with the month’s final University of Michigan consumer sentiment index and Q2 results from BlackBerry.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +4.24 +10.51 +15.19 +6.93
NASDAQ +9.65 +20.86 +22.95 +14.00
S&P 500 +8.77 +16.72 +17.64 +7.91
REAL YIELD 9/19 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.56% 0.55% 1.68% 1.80%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 9/19/146,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

WEEKLY TIP

As you pursue both intermediate and long-range financial objectives, breaking the effort down into 5-year blocks can help you measure your progress.

WEEKLY RIDDLE

What word measures weight and turns negative if spelled backwards?

Last week’s riddle:
Christine likes grapes but not potatoes. She likes squash but not lettuce, and peas but not onions. Following the same rule, will she like pumpkins or apples?

Last week’s answer:
Pumpkins. Christine only likes fruits and vegetables that grow on vines.

Citations.
1 – marketwatch.com/economy-politics/calendars/economic [9/19/14]
2 – forbes.com/sites/samanthasharf/2014/09/17/fed-still-sees-considerable-time-before-interest-rate-hike/ [9/17/14]
3 – abcnews.go.com/Business/wireStory/us-home-construction-drops-144-percent-august-25589765 [9/18/14]
4 – conference-board.org/press/pressdetail.cfm?pressid=5281 [9/19/14]
5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [9/19/14]
6 – markets.wsj.com/us [9/19/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F19%2F13&x=0&y=0 [9/19/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F19%2F13&x=0&y=0 [9/19/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F19%2F13&x=0&y=0 [9/19/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F18%2F09&x=0&y=0 [9/19/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F18%2F09&x=0&y=0 [9/19/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F18%2F09&x=0&y=0 [9/19/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F20%2F04&x=0&y=0 [9/19/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F20%2F04&x=0&y=0 [9/19/14]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F20%2F04&x=0&y=0 [9/19/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/19/14]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/19/14]

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.

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