Weekly Economic Update – May 4, 2015

Presented by, Mike Fassi

 

WEEKLY QUOTE“There can be no happiness if the things we believe in are different from the things we do.”– Freya Stark

WEEKLY TIP

 

Before accepting a college loan, be sure that you and your student understand the consequences of a default. Student loan defaults are currently at historic highs.

WEEKLY RIDDLE

 

At times it begs to be answered, sometimes it interrupts you, but it will never ask you a question. What is it?

Last week’s riddle:

It traveled from Kentucky to Texas in three days, and it did so while staying in a corner. What is it?

Last week’s answer:

A postage stamp.

 

 

 

May 4, 2015

                   

PERSONAL SPENDING IMPROVES, Q1 GDP POOR

Consumer spending rose 0.4% in March, the Commerce Department noted; that doubled the February advance. Personal incomes were flat, however. The Bureau of Economic Analysis said the economy grew 0.2% in the first quarter; in better news, private-sector wages rose 2.8% in Q1. Another major indicator stayed flat in April: the Institute for Supply Management’s U.S. factory PMI again read just 51.5.1,2

CONSUMER CONFIDENCE POLLS GO DIFFERENT WAYS

April’s final University of Michigan consumer sentiment index rose 2.9 points off the final March reading to 95.9, its second-best mark since 2007. The Conference Board’s April consumer confidence poll came in at 95.2, a 4-month low.1,2

 

PENDING HOME SALES, HOME PRICE GAINS MODERATE

According to the National Association of Realtors, pending home sales rose 1.1% for April, beating the 0.3% rise forecast by analysts polled by MarketWatch but down from March’s 3.6% advance. The 20-city S&P/Case-Shiller home price index showed a 4.2% yearly gain for February, slightly weaker than the 4.4% rise for January.1

 

STOCKS SLIP FOR THE WEEK

The weak Q1 GDP estimate and the April 29 Federal Reserve policy statement that did not quite close the door on a June rate hike were but two factors in the retreats for the major indices. Last week’s performances: S&P 500, -0.44% to 2,108.29; Dow, -0.31% to 18,024.06; Nasdaq, -1.70% to 5,005.39.3,4

 

THIS WEEK: Key factory PMIs for China and the euro area arrive Monday, plus a report on March factory orders and earnings from AMC Networks, Tyson Foods, Cablevision, Avis Budget, Comcast, Denny’s, Health Net and MGM Resorts. Tuesday, earnings from Directv, Gulfport Energy, Papa John’s, Allstate, Electronic Arts, Estee Lauder, Fossil, Groupon, Herbalife, Hyatt Hotels, Kellogg, News Corp., Office Depot, Sprint, UBS, Walt Disney, Weight Watchers and WestJet accompany ISM’s March services PMI. Wednesday brings service sector PMIs for China and the euro area, ADP’s April jobs report, a Janet Yellen speech at a conference in Washington, and earnings from Tesla, Transocean, Spectra Energy, Choice Hotels, Anheuser-Busch, Chesapeake Energy, GlaxoSmithKline, Keurig Green Mountain, Marathon Oil, Motorola Solutions, MetLife, TripAdvisor, Wendy’s, 21st Century Fox and Whole Foods. Thursday, new initial claims figures are out plus earnings from Aramark, Norwegian Cruise Line, Monster, Alcatel-Lucent, Alibaba, ArcelorMittal, CBS, Houghton Mifflin Harcourt, Kemper, Molson Coors and Zynga. Friday, the government’s April jobs report accompanies earnings from AOL and Tribune Media.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +1.13 +8.85 +12.75 +7.58
NASDAQ +5.69 +21.27 +20.67 +15.95
S&P 500 +2.40 +11.92 +15.53 +8.14
REAL YIELD 5/1 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.18% 0.43% 1.29% 1.61%

Sources: online.wsj.com, bigcharts.com, treasury.gov – 5/1/155,6,7,8

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.

 

Mike Fassi may be reached at mike@fassifinancialnetwork.com, or 970.416.0088

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 – marketwatch.com/economy-politics/calendars/economic [5/1/15]

2 – bloomberg.com/news/articles/2015-05-01/consumer-sentiment-in-u-s-rises-to-second-highest-since-2007 [5/1/15]

3 – marketwatch.com/story/federal-reserve-leaves-open-chance-of-june-rate-hike-2015-04-29 [4/29/15]

4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [5/1/15]

5 – markets.wsj.com/us [5/1/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F1%2F14&x=0&y=0 [5/1/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F1%2F14&x=0&y=0 [5/1/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F1%2F14&x=0&y=0 [5/1/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F30%2F10&x=0&y=0 [5/1/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F30%2F10&x=0&y=0 [5/1/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F30%2F10&x=0&y=0 [5/1/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=5%2F2%2F05&x=0&y=0 [5/1/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=5%2F2%2F05&x=0&y=0 [5/1/15]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=5%2F2%2F05&x=0&y=0 [5/1/15]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [5/1/15]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [5/1/15]

 

Summary
Article Name
Weekly Economic Update for May 4, 2015
Description
Weekly Economic Update for May 4, 2015 Consumer spending rose 0.4% in March, the Commerce Department noted; that doubled the February advance.
Author