Weekly Economic Update

Weekly Economic UpdateHOMEBUYING SLOWS, CONSTRUCTION ACCELERATES

The National Association of Realtors offered some good news and some bad news last week. While existing home sales decreased 3.3% in April, they were up 6.1% from a year ago. Along with the annual improvement in the pace of resales, the median home price rose 8.9% year-over-year to $219,400. April also saw a 20.2% leap in housing starts, taking groundbreaking to a high unseen since November 2008; the Commerce Department also noted a 10.1% increase in building permits last month.1,2

 

CONSUMER PRICES BARELY RISE

April brought just an 0.1% advance for the Consumer Price Index, a development influenced by a 1.7% fall in gasoline costs. (The average price for a gallon of unleaded was $2.73 as of Memorial Day weekend, nearly a dollar lower than a year ago.) In the bigger picture, the headline CPI declined 0.2% year-over-year. The Labor Department did report an 0.3% increase in the core CPI (which excludes energy and food prices); it rose 1.8% in a year. 3

 

GOLD SLIPS, OIL STAYS UNDER $60 A BARREL

With the dollar recovering from a brief slump and Federal Reserve chair Janet Yellen commenting Friday that the Federal Reserve is still likely to raise interest rates this year, metals were hurt last week. Gold lost 1.7% on the COMEX, silver 2.9% and copper 3.9%. Oil settled at $59.72 on the NYMEX Friday, moving only $0.03 higher on the week.4

 

A MINOR ADVANCE FOR THE S&P 500

A fairly placid trading week saw the broad benchmark rise 0.16% to 2,126.06. From May 18-22, the Dow lost 0.22% while the Nasdaq gained 0.81%. The Nasdaq settled Friday at 5,089.36, the Dow at 18,232.02. 5

THIS WEEK: U.S. financial markets are closed Monday as the nation observes Memorial Day. Wall Street interprets reports on April new home sales and hard goods orders Tuesday, along with earnings from AutoZone, TiVo and Workday. On Wednesday, Tiffany, Palo Alto Networks, Toll Brothers, Costco, Popeye’s, Valspar and Michael Kors report results. Thursday, investors will eye the latest weekly jobless claims report and NAR’s report on April pending home sales; earnings from Abercrombie & Fitch, Express and GameStop will also arrive. On Friday, the second estimate of first quarter GDP is announced and Big Lots presents Q1 results.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +2.29 +10.21 +15.77 +7.32
NASDAQ +7.46 +22.51 +25.66 +14.75
S&P 500 +3.26 +12.34 +19.09 +7.81
REAL YIELD 5/22 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.34% 0.35% 1.33% 1.65%

Sources: wsj.com, bigcharts.com, treasury.gov – 5/22/156,7,8,9

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.

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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 – nasdaq.com/article/us-existinghome-sales-decline-33-in-april-20150521-01387 [5/22/15]

2 – marketwatch.com/story/housing-starts-surge-20-in-april-2015-05-19 [5/19/15]

3 – usatoday.com/story/money/2015/05/22/consumer-prices-april/27737861/ [5/22/15]

4 – proactiveinvestors.com/companies/news/61602/gold-drops-01-to-settle-at-1204-wti-drops-17-to-5972–61602.html [5/22/15]

5 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [5/22/15]

6 – markets.wsj.com/us [5/22/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F22%2F14&x=0&y=0 [5/22/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F22%2F14&x=0&y=0 [5/22/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F22%2F14&x=0&y=0 [5/22/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F21%2F10&x=0&y=0 [5/22/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F21%2F10&x=0&y=0 [5/22/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F21%2F10&x=0&y=0 [5/22/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F23%2F05&x=0&y=0 [5/22/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F23%2F05&x=0&y=0 [5/22/15]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F23%2F05&x=0&y=0 [5/22/15]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/22/15]

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/22/15]

 

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