Weekly Economic Newsletter – August 29, 2016

 

 

WEEKLY QUOTE
“Education’s purpose is to replace an empty mind with an open one.”
– Malcolm Forbes

      

   

WEEKLY TIP
One path toward some back-to-school shopping savings: follow your favorite stores on Facebook and Twitter. See if they can also text you some discount offers.

     

  

WEEKLY RIDDLE
Together, an antique dresser and the old baseball cards found within it are valued at $20,000. If the baseball cards are worth $18,000 more than the dresser, how much is the dresser worth?

 

 

Last week’s riddle:
It floats gently when it is born, lies still when it is alive, and runs when it is dead. What is it?

   

Last week’s answer:
Snow.

 

 

 

YELLEN HINTS AT A RATE HIKE

Speaking Friday at the Federal Reserve’s annual retreat in Jackson Hole, Wyoming, Fed chair Janet Yellen commented that “the case for an increase in the federal funds rate has strengthened in recent months.” That statement was interpreted by some economists as a sign that the central bank could adjust interest rates this fall, but perhaps only after the presidential election.1

NEW HOME SALES ACCELERATE, RESALES DECLINE

The good news, from the Census Bureau: July brought a 12.4% leap in new home buying. Sales approached a 9-year peak, even with only 4.3 months of new home inventory available. The bad news, from the National Association of Realtors: July saw existing home purchases slip 3.2%. Inventory was down 5.8% year-over-year; the median sale price was $244,100, 5.3% better than a year earlier.2

SENTIMENT GAUGE SLIPS IN AUGUST

The University of Michigan’s consumer sentiment index finished the eighth month of the year at 89.8, underneath its 90.4 preliminary reading. Consumer assessment of current economic conditions remained high at 107.0, increasing nearly a point from the initial August survey.3

STOCKS GIVE BACK SOME GROUND

Wall Street wavered after Janet Yellen’s speech Friday, and all three major indices ended up down for the week as investors contemplated her remarks and the federal government’s new 1.1% estimate of Q2 growth. Comparing the settlements at Friday’s closing bell to those a week earlier, the Dow Jones Industrial Average settled 0.85% lower at 18,395.40; the Nasdaq Composite, 0.37% lower at 5,218.92; and the S&P 500, 0.68% lower at 2,169.04.3,4

THIS WEEK: On Monday, investors will consider the July personal spending report. The Conference Board’s August consumer confidence index and the June Case-Shiller home price index arrive Tuesday, plus earnings from Abercrombie & Fitch, Bob Evans, DSW, Fred’s, H&R Block, and Palo Alto Networks. Wednesday offers the latest ADP employment change numbers, July pending home sales figures and earnings from Chico’s, Five Below, and Navistar. Thursday, the August Challenger job-cut report, ISM’s August manufacturing PMI and a new initial claims report all appear, along with earnings from Broadcom, Campbell Soup, Land’s End, Lululemon Athletica, Smith & Wesson, and VeriFone. Friday, the Department of Labor issues its August jobs report and Sears Hometown & Outlet Stores announces Q2 results.

Chart 08292016

Sources: wsj.com, bigcharts.com, treasury.gov – 8/26/164,5,6,7
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.

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Citations.
1 – usatoday.com/story/money/2016/08/26/yellen-case-rate-hike-has-strengthened/89363312/ [8/26/16]
2 – nytimes.com/aponline/2016/08/24/us/politics/ap-us-home-sales.html [8/24/16]
3 – investing.com/economic-calendar/ [8/26/16]
4 – markets.wsj.com/us [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F26%2F15&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F26%2F15&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F26%2F15&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F26%2F11&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F26%2F11&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F26%2F11&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F25%2F06&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F25%2F06&x=0&y=0 [8/26/16]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F25%2F06&x=0&y=0 [8/26/16]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/26/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/26/16]

 

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.

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.

2016-08-29T21:56:58+00:00
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