Growth Report – Monday, September 18, 2017

INFLATION SPIKED IN AUGUST
Economists had long assumed consumer prices would rise abruptly at some point, and they certainly did last month. The Consumer Price Index increased 0.4% in August, its biggest one-month advance since its 0.6% gain in January. Higher gas prices were a major influence: they rose 6.3% for August. Core inflation was up 0.2% after four straight 0.1% monthly gains. Yearly consumer inflation is now at 1.9%. Wholesale inflation, as measured by the Producer Price Index, rose 0.2% in August to an annualized pace of 2.4%.1,2

RETAIL SALES STAGE A LATE-SUMMER RETREAT
Americans cut back on retail purchases during August. Retail sales declined 0.2%, a disappointment after the 0.3% July gain. The silver lining: the core number, minus gasoline and auto buying, rose 0.2%.2

CONSUMER SENTIMENT INDEX DIPS SLIGHTLY
The University of Michigan’s twice-monthly barometer of the American consumer’s mood fell 1.5 points in its initial September edition. At a mark of 95.3, the index was still 4.5% above where it was a year earlier. While the index’s current conditions component hit its highest level in nearly 17 years, 9% of survey respondents believed that Hurricanes Irma and Harvey had hurt the overall economy.3

A MILESTONE FOR THE S&P 500
Recording its highest close ever, the broad equities benchmark settled at 2,500.23 Friday, capping off a 5-day gain of 1.58% and attaining its third round-number highpoint of 2017. The Nasdaq Composite advanced 1.39% for the week to 6,448.47. Setting the pace for the big three, the Dow Jones Industrial Average added 2.16% last week to close Friday at 22,268.34. The Russell 2000 had an even better week, rising 2.31% to 1,431.71; the CBOE VIX again neared historic lows, dropping 16.09% in five days to 10.17.4,5

THIS WEEK: On Monday, Steelcase shares quarterly results. Earnings calls Tuesday include announcements from Adobe Systems, AutoZone, Bed Bath & Beyond, and FedEx, and investors will also look at the Census Bureau’s August report on new residential construction. Wednesday, the Federal Reserve could reveal plans for unwinding its balance sheet as it wraps up a monetary policy meeting; Wall Street will also consider August existing home sales numbers and Q3 results from General Mills. A new initial unemployment claims report arrives Thursday. CarMax and Finish Line present earnings Friday.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +12.68 +22.27 +12.76 +6.57
NASDAQ +19.79 +22.84 +20.51 +14.78
S&P 500 +11.68 +16.44 +14.11 +6.85
REAL YIELD 9/15 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.35% 0.22% -0.76% 2.20%

Sources: wsj.com, bigcharts.com, treasury.gov – 9/15/175,6,7,8
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

“People need to be reminded more often than they need to be instructed.”

– Samuel Johnson

WEEKLY TIP

Did you just get a raise or a promotion? Beware of lifestyle creep – the tendency to spend more when you make more. Be sure to direct appropriate amounts of your increased income into savings and investments.

WEEKLY RIDDLE

Take three letters, arrange them one way, and you have a word for “conflict.” Arrange them another way, and you have a word for “uncooked.” What are the three letters?

Last week’s riddle:
I walk and run on all fours, and I laugh while stalking my prey, but I seldom go in for the kill. What animal am I?

Last week’s answer:
A hyena.

Citations.
1 – cnbc.com/2017/09/14/us-consumer-price-index-aug-2017.html [9/14/17]
2 – investing.com/economic-calendar/ [9/15/17]
3 – sca.isr.umich.edu/ [9/15/17]
4 – bloomberg.com/news/articles/2017-09-15/u-s-stocks-reach-another-milestone-as-s-p-500-vaults-past-2-500 [9/15/17]
5 – markets.wsj.com/us [9/15/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F15%2F16&x=0&y=0 [9/15/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F15%2F16&x=0&y=0 [9/15/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F15%2F16&x=0&y=0 [9/15/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F14%2F12&x=0&y=0 [9/15/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F14%2F12&x=0&y=0 [9/15/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F14%2F12&x=0&y=0 [9/15/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F14%2F07&x=0&y=0 [9/15/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F14%2F07&x=0&y=0 [9/15/17]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F14%2F07&x=0&y=0 [9/15/17]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/15/17]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/15/17]

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.

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