Growth Report – Monday, February 5, 2018

WAGE GROWTH PICKS UP AT LAST
In January, average hourly pay was 2.9% higher than it was a year earlier. That was the key takeaway from the Department of Labor’s latest jobs report, which noted the addition of 200,000 net new workers last month. In January, the headline unemployment rate stayed at 4.1%; the broader U-6 rate, which counts the underemployed, ticked up to 8.2%.1

ISM: FACTORY SECTOR IN GREAT SHAPE
The Institute for Supply Management released its January purchasing manager index for the manufacturing industry last week, and the reading of 59.1 surpassed the forecast, made by economists surveyed by MarketWatch, by half a point. A reading approaching 60 indicates significant expansion.2

HOUSEHOLDS SPEND MORE, REMAIN OPTIMISTIC
Personal spending and incomes rose 0.4% in December, according to a Department of Commerce report. The Conference Board’s consumer confidence index climbed 2.3 points to 125.4 in January, while the University of Michigan’s final January consumer sentiment index came in at 95.7 Friday, 1.3 points above its prior reading.2

STOCKS SLUMP AS FEBRUARY BEGINS
As the 10-year Treasury yield hit 2.85% during Friday’s Wall Street trading session, bears came out of hiding. New wage growth data only added to investor concerns about rising inflation – and how the Federal Reserve might respond to it. For the week: the S&P 500 fell 3.85% to 2,762.13; the Dow Industrials, 4.12% to 25,520.96; the Nasdaq Composite, 3.53% to 7,240.95.3,4

THIS WEEK: ISM’s service sector PMI appears Monday, along with earnings from Bristol-Myers, Macerich, Panasonic, Suzuki, and Sysco. Akamai, Allergan PLC, Anadarko Petroleum, Aramark, Beazer Homes, BP, Chipotle, Container Store, Cummins, Dunkin’ Brands, General Motors, Genworth Financial, Gilead Sciences, Netgear, Snap, Spirit Airlines, and Walt Disney Co. release earnings Tuesday. Wednesday’s earnings roll call includes news from Allstate, Callaway Golf, Exelon, GlaxoSmithKline, Hasbro, Humana, Invacare, Michael Kors, NetEase, O’Reilly, Peabody Energy, Prudential Financial, Rio Tinto, Take-Two Interactive, Tesla, Twenty-First Century Fox, Valvoline, Yelp, and Zynga. Thursday, a new initial claims report arrives, plus earnings from Activision Blizzard, CBRE, Coty, CVS Health, Expedia, Goodyear, GrubHub, HanesBrands, Kellogg, Lions Gate, NCR, Nvidia, Penske, Philip Morris, Teva Pharmaceuticals, The Hartford, Twitter, Tyson Foods, VeriSign, Viacom, W.R. Grace, and Yum! Brands. Friday, nothing major is scheduled.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +3.24 +28.34 +16.43 +10.03
NASDAQ +4.89 +28.47 +25.55 +20.00
S&P 500 +3.31 +21.10 +16.51 +9.79
REAL YIELD 2/2 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.70% 0.43% -0.55% 1.31%

Sources: wsj.com, bigcharts.com, treasury.gov – 2/2/184,5,6,7
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

“There are no speed limits on the road to excellence.”

– David W. Johnson

WEEKLY TIP

Smart households invest with diversification. They recognize that directing most of their invested assets into one or two investment classes potentially heightens their risk exposure.

WEEKLY RIDDLE

No matter the time of day, it can open what you can’t. If not for it, on your front porch you would stand. What is it?

Last week’s riddle:
Frank got behind the wheel and traveled from Fort Lauderdale to Norfolk without any tires. How did he pull this off?

Last week’s answer:
He was behind the captain’s wheel of a boat.

Citations.
1 – nbcnews.com/business/economy/u-s-added-200-000-jobs-january-n843996 [2/2/18]
2 – marketwatch.com/economy-politics/calendars/economic [2/2/18]
3 – tinyurl.com/y7wgwjtg [2/2/18]
4 – markets.wsj.com/us [2/2/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F2%2F17&x=0&y=0 [2/2/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F2%2F17&x=0&y=0 [2/2/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F2%2F17&x=0&y=0 [2/2/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F1%2F13&x=0&y=0 [2/2/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F1%2F13&x=0&y=0 [2/2/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F1%2F13&x=0&y=0 [2/2/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F1%2F08&x=0&y=0 [2/2/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F1%2F08&x=0&y=0 [2/2/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F1%2F08&x=0&y=0 [2/2/18]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/2/18]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/2/18]

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. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment and retirement planning for individuals and 401k consulting for small businesses. Cities served but not limited to are: Park City, 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