Growth Report – Monday, May 8, 2017

NEW DATA SHOWS MORE HIRING, LESS SPENDING
Unemployment hit a 10-year low in April as payrolls swelled with 211,000 net new jobs, a rebound from the meager gains of March. The Department of Labor’s monthly report showed the headline jobless rate declining 0.1% to 4.4%; the U-6 rate measuring underemployment was at 8.6%, falling 0.3%. The latest consumer spending report from the Department of Commerce was less impressive. Personal spending was flat in March, with personal incomes up 0.2%.1,2

ISM PMIS WENT OPPOSITE WAYS IN APRIL
America’s factory sector grew at a slower rate last month than it did during March, while the country’s service sector picked up its pace of expansion. The Institute for Supply Management’s April purchasing manager index dipped to 54.8 from its previous 57.2 mark; ISM’s non-manufacturing PMI rose 2.3 points in April to 57.5.2

FEDERAL RESERVE LEAVES RATES ALONE
As expected, the central bank left the benchmark interest rate in the 0.75-1.00% target range last week. The Federal Open Market Committee felt that the poor economic growth of the first quarter was likely “transitory,” and in its view, economic activity should “expand at a moderate pace” with “gradual” monetary policy adjustments. On May 5, Fed futures traders put the odds of a June rate hike at 79%.3,4

BLUE CHIPS TOP 21,000
The Dow Jones Industrial Average reached another milestone Friday, settling at 21,006.94 after rising 0.32% on the week. Slightly better 5-day performances were posted by the Nasdaq Composite (+0.88% to 6,100.76) and the S&P 500 (+0.63 to 2,399.29). Small caps lost 0.25% for the week – the Russell 2000 closed at 1,397.00 Friday. During the past five market days, the CBOE VIX retreated 2.31% to 10.57.5

THIS WEEK: Investors will keep an eye on France’s national election Monday, and review earnings from Sysco and Tyson Foods. On Tuesday, earnings roll in from Allergan, Discovery Communications, and Valeant Pharmaceuticals. Wednesday features earnings from Dillard’s, NetEase, Snap, Sotheby’s, Spectra Energy, Symantec, Wendy’s, and Whole Foods. Thursday offers the federal government’s latest reading on wholesale inflation, a new initial jobless claims report, and earnings from Kohl’s, Macy’s, and Nordstrom. April retail sales and consumer inflation data appear Friday, plus the University of Michigan’s initial May consumer sentiment index and earnings news from JCPenney.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +6.30 +18.95 +12.22 +5.84
NASDAQ +13.33 +29.33 +21.27 +13.72
S&P 500 +7.17 +17.00 +15.05 +5.94
REAL YIELD 5/5 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.50% 0.13% -0.30% 2.24%

Sources: wsj.com, bigcharts.com, treasury.gov – 5/5/176,7,8,9
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

“All opinions are not equal. Some are a very great deal more robust, sophisticated and well supported in logic and argument than others.”

– Douglas Adams

WEEKLY TIP

Avoid tapping your retirement accounts to help pay college costs for a child or grandchild. If you make this move, you risk damaging your own financial future in your effort to smooth theirs.

WEEKLY RIDDLE

It is worn on the road, it is nearly always dirty, and it only comes in one color. What is it?

Last week’s riddle:
I have hands, my hands move, but you will never hear me clap. What am I?

Last week’s answer:
A clock.

Citations.
1 – investing.com/news/economic-indicators/u.s.-unemployment-rate-hits-10-year-low-as-job-creation-beats-consensus-480556 [5/5/17]
2 – marketwatch.com/economy-politics/calendars/economic [5/5/17]
3 – tinyurl.com/lkrmt8w [5/3/17]
4 – cmegroup.com/trading/interest-rates/countdown-to-fomc.html [5/5/17]
5 – markets.wsj.com/us [5/5/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F5%2F16&x=0&y=0 [5/5/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F5%2F16&x=0&y=0 [5/5/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F5%2F16&x=0&y=0 [5/5/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F4%2F12&x=0&y=0 [5/5/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F4%2F12&x=0&y=0 [5/5/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F4%2F12&x=0&y=0 [5/5/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F4%2F07&x=0&y=0 [5/5/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F4%2F07&x=0&y=0 [5/5/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F4%2F07&x=0&y=0 [5/5/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/5/17]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/5/17]

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, Mark is known as a Wealth Advisor, The 401k Advisor, Investor Coach, The Financial Advisor, The Financial Planner 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 investment and retirement planning for individuals and 401k consulting for small businesses. Stonecreek is located in Salt Lake City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, and American Fork City in Utah.

Category: Blog, Growth Report