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Weekly Economic Update for February 9, 2015

WeeklyMarketUpdate.jpgEMPLOYERS ADD 257,000 JOBS IN JANUARY

That beat the 230,000 hires forecast in a MarketWatch consensus of analysts. Yes, the headline jobless rate actually rose 0.1% to 5.7% last month, and the total unemployment rate (U-6) rose for the first time in six months to 11.3% - but average hourly wages were up 0.5%, a striking shift after the 0.3% December decrease.1,2

  

ONE ISM PMI FALLS, ANOTHER RISES

The Institute for Supply Management’s January factory PMI lost 1.6 points to come in at 53.5, while its January service sector index advanced 0.2 points to 56.7. Analysts polled by MarketWatch projected readings of 55.0 for the manufacturing gauge and 56.5 for the services gauge. In related news, the Federal Reserve said factory orders fell 3.4% in December, twice the November decline.1

         

CONSUMER SPENDING SANK IN DECEMBER

December saw a welcome 0.3% gain in consumer incomes but also a 0.3% pullback in consumer spending – the largest monthly dip since 2009. The Commerce Department noted sizable December declines in car and truck sales – and less spending on gas and other fuels. The personal savings rate rose 0.6% to 4.9%.3

             

MOMENTUM RETURNS TO THE MARKET

Oil rallied, hiring topped expectations and the euro area was poised to receive an economic stimulus, so big gains were the order of the week. The Dow soared 3.84% in five trading days, settling Friday at 17,824.29. The same stretch saw the Nasdaq climb 2.35% to 4,744.40 and the S&P 500 jump 3.03% to 2,055.47. Light sweet crude gained 8.84% last week in New York to reach $52.08 a barrel Friday; gold futures lost 3.62% on the COMEX.4

       

THIS WEEK: Monday, Wall Street reviews Q4 results from Loews Corp. and Hasbro. Tuesday brings data on December wholesale stockpiles plus earnings from CVS Health, Akamai, Dean Foods, LifeLock, Monster, Genworth, Kinross Gold, Molson Coors, Spirit Airlines, Starwood Hotels and Western Union. More earnings appear on Wednesday: Cisco, Tesla, Baidu, MetLife, Applied Materials, Panera, AOL, Cheesecake Factory, NetApp, Mosaic, Nvidia, PepsiCo, Owens Corning, Panera, Tesoro, Time Warner, TripAdvisor, Whole Foods and Zulily. January retail sales and December business inventories reports are out on Thursday, along with the latest initial jobless claims numbers and earnings from Coca-Cola, Avon, Apache, Groupon, Zynga, AIG, Boyd Gaming, CBS, Kellogg, Kraft Foods and Shutterfly. The University of Michigan’s initial February consumer sentiment index and earnings from J.M. Smucker and Red Robin complete the week on Friday.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+0.01

+14.05

+15.61

+6.63

NASDAQ

+0.18

+16.94

+24.32

+12.79

S&P 500

-0.17

+15.90

+18.56

+7.10

REAL YIELD

2/6 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.24%

0.57%

1.32%

1.62%

 

 


Sources: online.wsj.com, bigcharts.com, treasury.gov - 2/6/155,6,7,8

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.

 

 

Securities and advisory services offered through Cetera Advisor Networks LLC, member FINRA/SIPC. Cetera is under separate ownership from any other named entity.

 

 

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 [2/6/15]

2 - tinyurl.com/nyfpnt2 [2/6/15]

3 - marketwatch.com/story/consumer-spending-posts-biggest-drop-since-2009-2015-02-02 [2/2/15]

4 - markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [2/6/15]

5 - markets.wsj.com/us [2/6/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F6%2F14&x=0&y=0 [2/6/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F6%2F14&x=0&y=0 [2/6/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F6%2F14&x=0&y=0 [2/6/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F5%2F10&x=0&y=0 [2/6/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F5%2F10&x=0&y=0 [2/6/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F5%2F10&x=0&y=0 [2/6/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F7%2F05&x=0&y=0 [2/6/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F7%2F05&x=0&y=0 [2/6/15]

6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F7%2F05&x=0&y=0 [2/6/15]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/6/15]

8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/6/15]

 

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