Presented by, Mike Fassi
“True originality consists not in a new manner but in a new vision.”
– Edith Wharton
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What has hundreds or even thousands of ears but hears absolutely nothing?
Last week’s riddle:
What wintry thing flies as it is born, lies when alive, and runs when dead?
Last week’s answer:
October 12, 2015
SEPTEMBER FED MINUTES SHOW CAUTION
Minutes from last month’s Federal Open Market Committee meeting provided a bit more insight into the Federal Reserve’s decision not to tighten monetary policy in September. Fed officials opted to “wait for additional information” before making a move, noting that “recent global economic and financial developments may have increased the downside risks to economic activity somewhat.” Even so, most FOMC members thought it appropriate to raise rates “before the end of the year”, believing that slowing economies elsewhere had not “materially altered” the economic outlook for America.1
ISM SERVICES INDEX FALLS SHORT OF EXPECTATIONS
According to the Institute for Supply Management, the U.S. service sector grew at a solid pace last month – the September reading for ISM’s non-manufacturing purchasing manager index was 56.9. Still, that was down from 59.0 in August. Analysts polled by Briefing.com expected a September reading of 58.0.2
WTI CRUDE, GOLD BOTH RALLY
Oil closed at $49.63 a barrel on the NYMEX Friday, gaining 9.0% in five days. A 1.0% advance on Friday took gold to a Friday COMEX settlement of $1,155.90 an ounce – its highest close since August. For the week, the yellow metal gained 1.7%.3
DOVISH FED STANCE HELPS STOCKS JUMP
The bulls certainly came back to Wall Street last week: the S&P 500 had its best five days in some time, rising 3.26% to a Friday close of 2,014.89. Across October 5-9, tech shares rallied to send the Nasdaq 2.61% higher to 4,830.47. The Dow rose 3.72% to 17,084.49 in that time frame.4
THIS WEEK: Monday is Columbus Day, a federal holiday; the stock market will be open, but the bond market will be closed. On Tuesday, eBay, Fastenal, Intel, Johnson & Johnson, JPMorgan Chase and Kinder Morgan all report earnings. Wednesday offers earnings from Bank of America, BlackRock, Delta Air Lines, Netflix and Wells Fargo, along with a new Federal Reserve Beige Book, September’s PPI and September retail sales numbers. The latest initial claims report and the September CPI come out Thursday, plus earnings from BB&T, Blackstone Group, Charles Schwab, Citigroup, First Republic, Goldman Sachs, Mattel, Philip Morris, Schlumberger, U.S. Bancorp, UnitedHealth, WD-40 and Winnebago. On Friday, earnings from Comerica, General Electric, Honeywell International, Progressive and SunTrust Banks arrive, plus October’s initial University of Michigan consumer sentiment index and a report on September industrial output.
Sources: wsj.com, bigcharts.com, treasury.gov – 10/9/155,6,7,8
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 firstname.lastname@example.org, 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.
1 – cnbc.com/2015/10/08/fed-minutes-members-worried-about-slower-global-growth.html [10/8/15]
2 – briefing.com/investor/calendars/economic/2015/10/05-09 [10/9/15]
3 – 247wallst.com/investing/2015/10/09/the-4-stocks-that-lifted-the-djia-on-friday-5/ [10/9/15]
4 – markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [10/9/15]
5 – markets.wsj.com/us [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F9%2F14&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F9%2F14&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F9%2F14&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F8%2F10&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F8%2F10&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F8%2F10&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=10%2F10%2F05&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=10%2F10%2F05&x=0&y=0 [10/9/15]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=10%2F10%2F05&x=0&y=0 [10/9/15]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [10/9/15]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [10/9/15]