Weekly Economic Update

Summit Brokerage Services Weekly Economic UpdateTHE ECONOMY IS BOOMING

Looking at two vital indicators, it becomes hard to draw any other conclusion. In its final estimate, the Commerce Department put Q3 growth at 5.0% – the best quarterly GDP since Q3 2003, following a 4.6% expansion in Q2. Consumer spending was up 3.2% in the third quarter, business investment up 8.9%. Speaking of personal spending, the latest Commerce Department figure on that was also impressive – a November gain of 0.6%, complemented by a gain of 0.4% in personal income. Growth and household spending may not be quite as notable in December or Q4, but the recovery is definitely in full swing.1,2

 

GREAT GROWTH DOESN’T SPUR FALL HOMEBUYING

Existing home sales fell for only the second time in eight months in November, and the decline was sharp: the National Association of Realtors announced a 6.1% slip. New home purchases fell 1.6% last month according to the Census Bureau, marking their first down month since July.3

 

CONSUMER SENTIMENT HOLDS STEADY

At 93.6, the University of Michigan’s last consumer sentiment index reading of 2014 was a tiny bit below expectations. Economists polled by MarketWatch had forecast the final December index to come in at 93.8, unchanged from a month earlier.2

 

THE DOW TAKES IT TO ANOTHER LEVEL

It cleared 18,000 during an abbreviated market week, settling Friday at 18,053.71 thanks to a 1.55% gain across 3½ trading days. Weekly advances also came for the Nasdaq (1.23% to 4,806.86) and S&P 500 (0.88% to 2,088.77). By Friday afternoon, oil prices had sunk under $55 in after-hours trading on the NYMEX; crude lost 3.51% on the week. Gold rallied Friday to trim its 5-day loss to 0.23%; on the COMEX, the yellow metal was at $1,194.40 at week’s end.4

 

THIS WEEK: Nothing major is scheduled on Monday. Tuesday, the Conference Board’s final consumer confidence index of 2014 arrives along with the October edition of the Case-Shiller home price index. On Wednesday, investors will parse the latest initial claims figures and the November pending home sales report from the NAR; U.S. bond markets should close at 2:00pm EST, but the NYSE and NASDAQ will each have a full trading day. Wall Street closes Thursday for New Year’s Day, along with most foreign financial markets; China, however, will present its December factory PMI. Friday sees the release of ISM’s December manufacturing PMI and two key foreign PMIs tracking the Chinese service sector and eurozone manufacturing.

 

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +8.91 +9.55 +14.32 +6.76
NASDAQ +15.09 +15.35 +22.06 +12.31
S&P 500 +13.01 +13.40 +17.08 +7.34
REAL YIELD 12/26 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.58% 0.80% 1.50% 1.62%

 
Sources: online.wsj.com, bigcharts.com, treasury.gov – 12/26/145,6,7,8

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.

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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. 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 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. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. 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. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results.  Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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.

 

Citations.

1 – tinyurl.com/mg2sl49 [12/23/14]

2 – marketwatch.com/economy-politics/calendars/economic [12/23/14]

3 – investing.com/economic-calendar/ [12/23/14]

4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [12/26/14]

5 – markets.wsj.com/us [12/26/14]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F26%2F13&x=0&y=0 [12/26/14]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F26%2F13&x=0&y=0 [12/26/14]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F26%2F13&x=0&y=0 [12/26/14]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F24%2F09&x=0&y=0 [12/26/14]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F24%2F09&x=0&y=0 [12/26/14]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F24%2F09&x=0&y=0 [12/26/14]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F27%2F04&x=0&y=0 [12/26/14]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F27%2F04&x=0&y=0 [12/26/14]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F27%2F04&x=0&y=0 [12/26/14]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/26/14]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/26/14]

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