Growth Report for Monday, December 1, 2014

CAUTIOUS SPENDING, BUT IMPRESSIVE GROWTH
Personal income and personal spending both rose 0.2% in October, according to the Commerce Department. Not too impressive? Maybe, but the federal government’s second estimate of Q3 GDP was. Pair the newly revised 3.9% reading with the final 4.6% mark for Q2, and you get the best 6 months for the economy since 2003. The Federal Reserve’s personal consumption expenditure (PCE) price index was only up 1.4% in the past year; the Fed has set its annual consumer inflation target at 2.0%.1

CONSUMER SENTIMENT BAROMETERS RISE & FALL
At 88.7, the Conference Board’s November consumer confidence index slipped badly from October’s 94.5 mark. In better news, the University of Michigan’s consumer sentiment index notched a monthly gain of 1.9 points with an 88.8 final November reading.2

HOUSING MARKET CONTINUES TO NORMALIZE
Last week, September’s 20-city S&P/Case-Shiller home price index showed a 4.9% yearly rise, much less than the double-digit annual gains seen in the March and April editions. Pending home sales, as measured by the National Association of Realtors, were down 1.1% for October; that is the third retreat in five months. October did see a third straight monthly advance in new home buying; sales were up 0.7% according to the Census Bureau.2

MINOR ADVANCE FOR STOCKS, MAJOR RETREAT BY OIL
NYMEX crude closed out the month at $66.15 a barrel, the lowest since September 2009; prices slipped 10.2% on Friday alone after OPEC decided not to cut supply. The S&P 500, on the other hand, gained 0.20% last week to settle at 2,067.56 Friday. The Dow’s weekly advance of 0.10% took it to a close of 17,828.24 Friday afternoon; the Nasdaq rose 1.67% on the week to end November at 4,791.63.3,4

THIS WEEK: Monday, ISM puts out its November manufacturing PMI. Tuesday, Wall Street considers earnings from Radio Shack, Bob Evans and Omnivision. Wednesday sees the release of ISM’s November services sector PMI, a new Fed Beige Book, ADP’s November employment change report and earnings from Guess? and Abercrombie & Fitch. Barnes & Noble, Smith & Wesson, American Eagle, Kroger and Dollar General all announce earnings Thursday, which is also when November’s Challenger job-cut report and the latest initial jobless claims numbers arrive. Friday offers the Labor Department’s November employment report, data on October factory orders and earnings from Big Lots.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +7.55 +10.83 +14.58 +7.02
NASDAQ +14.73 +18.02 +24.81 +12.74
S&P 500 +11.86 +14.49 +18.03 +7.54
REAL YIELD 11/28 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.39% 0.60% 1.15% 1.74%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 11/28/145,6,7,8
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.

WEEKLY QUOTE

“Ability will never catch up with the demand for it.”

– Malcolm Forbes

WEEKLY TIP

Make a contribution to a 529 plan by December 31 to have it count for the 2014 tax year. You may be eligible for a state income tax deduction as a result.

WEEKLY RIDDLE

It can be less thick than your finger when it folds, yet as thick as what it carries when it holds. What is it?

Last week’s riddle:
I often exist in the unaware; I persist, yet they don’t care. My hosts may have a blind eye, and a deaf ear; inform them, and I will disappear. What am I?

Last week’s answer:
Ignorance.

Citations.
1 – tinyurl.com/p4asvgk [11/26/14]
2 – investing.com/economic-calendar/ [11/26/14]
3 – tinyurl.com/k2drhcb [11/28/14]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [11/28/14]
5 – markets.wsj.com/us [11/28/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F29%2F13&x=0&y=0 [11/28/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F29%2F13&x=0&y=0 [11/28/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F29%2F13&x=0&y=0 [11/28/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F27%2F09&x=0&y=0 [11/28/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F27%2F09&x=0&y=0 [11/28/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F27%2F09&x=0&y=0 [11/28/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F29%2F04&x=0&y=0 [11/28/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F29%2F04&x=0&y=0 [11/28/14]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F29%2F04&x=0&y=0 [11/28/14]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/28/14]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/28/14]

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