PHONE: (425) 483-7351  |  INFO@SWAGERTYGARDNER.COM

 Button_AccountLogin.png

Our Two Cents Worth

Weekly Economic Update for September 22, 2014

WeeklyMarketUpdate.jpgINFLATION TOOK A HOLIDAY IN AUGUST

Consumer prices fell 0.2% last month while producer prices stayed flat. Wall Street didn’t mind the dip in the Consumer Price Index – it saw less impetus for the Federal Reserve to alter its stance on interest rates. In its latest policy statement, the Fed reiterated its intent to keep the federal funds rate at a historically low level “for a considerable time after” it stops easing. The central bank is still on track to wrap up QE3 after its October policy meeting. Economists surveyed by MarketWatch expected no change in either the Consumer Price Index or the Producer Price Index for August.1,2

  

A DOWNTURN IN GROUNDBREAKING

Why did housing starts drop 14.4% last month, with building permits down 5.6% as well? Census Bureau data showed an August decline in multi-family projects. Apartment construction accelerated 51% in July alone and is up 19.2% in the past year. Groundbreaking for single-family homes was only down 2.4% in August and remains up 4.2% year-over-year.3

      

MINOR ADVANCE FOR LEADING INDICATORS

The Conference Board’s leading economic index showed a 0.2% gain for August after increases of 1.1% in July and 0.7% in June. In the words of CB economist Ken Goldstein, the smaller advance implies that the economy “is continuing to gain traction, but most likely won’t repeat its stellar second quarter performance in the second half.”4

  

STATUS QUO GOOD FOR STOCKS

The Federal Open Market Committee stayed the course last week and Scotland stayed part of Great Britain (and NATO and the European Union). Those headlines helped U.S. benchmarks record the following weekly gains: S&P 500, 1.25% to 2,010.40; DJIA, 1.72% to 17,279.74; NASDAQ, 0.27% to 4,579.79.5

Weekly Economic Update for September 22, 2014

WeeklyMarketUpdate.jpgINFLATION TOOK A HOLIDAY IN AUGUST

Consumer prices fell 0.2% last month while producer prices stayed flat. Wall Street didn’t mind the dip in the Consumer Price Index – it saw less impetus for the Federal Reserve to alter its stance on interest rates. In its latest policy statement, the Fed reiterated its intent to keep the federal funds rate at a historically low level “for a considerable time after” it stops easing. The central bank is still on track to wrap up QE3 after its October policy meeting. Economists surveyed by MarketWatch expected no change in either the Consumer Price Index or the Producer Price Index for August.1,2

  

A DOWNTURN IN GROUNDBREAKING

Why did housing starts drop 14.4% last month, with building permits down 5.6% as well? Census Bureau data showed an August decline in multi-family projects. Apartment construction accelerated 51% in July alone and is up 19.2% in the past year. Groundbreaking for single-family homes was only down 2.4% in August and remains up 4.2% year-over-year.3

      

MINOR ADVANCE FOR LEADING INDICATORS

The Conference Board’s leading economic index showed a 0.2% gain for August after increases of 1.1% in July and 0.7% in June. In the words of CB economist Ken Goldstein, the smaller advance implies that the economy “is continuing to gain traction, but most likely won’t repeat its stellar second quarter performance in the second half.”4

  

STATUS QUO GOOD FOR STOCKS

The Federal Open Market Committee stayed the course last week and Scotland stayed part of Great Britain (and NATO and the European Union). Those headlines helped U.S. benchmarks record the following weekly gains: S&P 500, 1.25% to 2,010.40; DJIA, 1.72% to 17,279.74; NASDAQ, 0.27% to 4,579.79.5

Weekly Economic Update for September 15, 2014

WeeklyMarketUpdate.jpgSUMMER SPENDING SPREE LIFTS RETAIL SALES

They increased 0.6% in August, easing some anxieties about a possible slowdown in personal spending. Core retail sales (which exclude auto, gas, food, and home improvement purchases and more closely match the consumer spending aspect of GDP) improved 0.4% last month, and were up 4.1% year-over-year. The Commerce Department also revised July’s headline retail sales gain up to 0.3%.1

  

CONSUMER SENTIMENT HITS A 14-MONTH PEAK

At a reading of 84.6, September’s preliminary Thomson Reuters/University of Michigan consumer sentiment index was 2.1 points above its final mark for August. Not only that, it advanced to its highest level since July 2013. Household income expectations also hit their highest level in almost six years.1

     

GOLD DESCENDS AGAIN, OIL SLUMPS ON IEA FORECAST

Settling Friday at $1,231.50, the precious metal fell 2.8% last week on the COMEX, undercut by dollar strength. Silver posted the same weekly loss, ending the week at $18.55. After the International Energy Agency reduced its 2015 world demand forecast for oil, NYMEX crude slipped 0.6% Friday to settle at $92.27.2

Weekly Economic Update for September 8, 2014

WeeklyMarketUpdate.jpgWALL STREET TAKES JOBS DATA IN STRIDE

In August, a notable hiring streak ended: for the first time since January, the economy failed to create 200,000 new jobs during a month. Investors were disappointed by the news from the Labor Department, but it came with a silver lining: the moderation in job gains may give the Federal Reserve a bit less incentive to adjust interest rates down the road. The jobless rate ticked down to 6.1% last month; the U-6 rate (underemployed & unemployed) declined from 12.2% to 12.0%. August also saw 0.2% wage growth.1

    

FACTORY & SERVICE SECTOR GROWTH TOPS ESTIMATES

Both the manufacturing and non-manufacturing PMIs overseen by the Institute for Supply Management posted August gains. ISM’s purchasing manager index for the service sector reached 59.6 last month while its factory sector PMI hit 59.0. Analysts polled by Briefing.com thought the services PMI would come in at 57.8, the factory PMI at 57.0. Word also came last week from the Commerce Department that factory orders were up 10.5% in July.2

    

GOLD & OIL BEAT RETREATS

NYMEX crude dropped 2.7% last week, losing 1.3% Friday alone to settle at $93.32 a barrel; it didn’t do as badly as natural gas, which sank 6.9% last week. COMEX gold ended the week at $1,267.20 an ounce, representing a 4-day loss of 1.6%. Silver closed Friday at $19.17 an ounce, also falling 1.6% for the trading week.3

Weekly Economic Update for September 1, 2014

WeeklyMarketUpdate.jpgWHY DID CONSUMER SPENDING DECLINE IN JULY?

Last month’s 0.1% dip surprised analysts. In inflation-adjusted terms, the Commerce Department measured the pullback at 0.2%. Household confidence, though, continues to increase. The University of Michigan’s consumer sentiment index finished August at 82.5, up from 81.8 at the end of July and refuting the Wall Street Journal consensus forecast for a retreat to 80.2. The slightly more respected Conference Board consumer confidence index also got an August bump, rising to 92.4 from the previous 90.3 reading.1,2

    

HOME PRICE GROWTH CONTINUES TO MODERATE

So indicates the June S&P/Case-Shiller Home Price Index: its 20-city composite index shows a year-over-year overall increase of 8.1% (down from 9.3% in May). It did post a 1.0% monthly gain. The National Association of Realtors said pending home sales increased 3.3% in July, while the Census Bureau found new home buying declining 2.4% last month.2

    

RECORD MONTHLY LEAP FOR DURABLES

According to the Census Bureau, July saw a 22.6% gain in hard goods orders. What was behind that? A record order for Boeing jets. Minus transportation orders, core durable goods orders actually dipped 0.8% in July.2,3

  

BROAD BENCHMARK SURPASSES 2,000

The S&P 500 crawled over that important psychological milestone last week and stayed above it at week’s end, settling Friday at 2,003.37 and gaining 0.75% in five days. Last week also saw advances for the DJIA (+0.57% to 17,098.45) and the NASDAQ (+0.92% to 4,580.27).4

 

Weekly Economic Update for August 25, 2014

WeeklyMarketUpdate.jpgA GAIN IN EXISTING HOME SALES

In its July report, the National Association of Realtors recorded a 2.4% monthly increase in existing home sales. The good news from July took the annualized sales pace up to 5.15 million. According to the Census Bureau, July also saw a 15.7% leap in housing starts and an 8.1% rise for building permits.1

   

INFLATION REMAINS MUTED

The latest Consumer Price Index reading shows that inflation is manageable and matching the Federal Reserve’s target. In July, the CPI ticked north only 0.1% and that brought its yearly advance to 2.0% (1.9% minus energy and food prices). July saw the smallest monthly increase for the CPI since February.2

   

ANOTHER JUMP FOR THE CONFERENCE BOARD LEI

After rising 0.6% in both May and June, the Conference Board’s leading economic index advanced 0.9% last month. The July gain took it to 103.3, and its coincident economic index reached 109.0.2

 

S&P 500 EDGES BACK TOWARD RECORD TERRITORY

Advancing 1.71% for the week, the broad benchmark closed at 1,988.40 Friday. The NASDAQ nearly matched its 5-day gain (+1.65% to 4,538.55) while the Dow beat it (+2.03% to 17,001.22). Gold got a boost Friday after Federal Reserve chair Janet Yellen expressed that the economy is headed toward normal inflation and full employment, but it still lost 2.0% for the week, settling at $1,280.20 on the COMEX. NYMEX crude finished the week down at $93.65 a barrel; it is on a 5-week losing streak, its longest since November 2013.3,4

Weekly Economic Update for August 18, 2014

WeeklyMarketUpdate.jpgRETAIL SALES COOL OFF IN JULY

They were flat according to the Commerce Department, with core retail sales (excluding food, car, gasoline and home improvement purchases) up just 0.1%. Economists polled by Reuters believed overall retail sales would advance 0.2% last month. Is this a signal that Q3 growth won’t come near Q2 growth? It does reflect subdued consumer spending in the quarter’s first month.1

    

YEARLY WHOLESALE INFLATION CONTINUES TO DIP

The 12-month gain in the federal government’s Producer Price Index has gradually declined since the April reading, when it was measured at 2.1%. July brought a 0.1% increase in the headline PPI, but that still left the yearly gain at just 1.7%.2

    

FACTORY OUTPUT JUMPS

Federal Reserve data showed a 1.0% increase in industrial output last month; July’s gain was the largest since February. July witnessed a 10.1% leap in auto production, the largest monthly improvement for that gauge in more than five years.3

Weekly Economic Update for August 11, 2014

WeeklyMarketUpdate.jpgU.S. SERVICE SECTOR IS BOOMING

The Institute for Supply Management’s July non-manufacturing PMI came in at a stellar 58.7, indicating rapid expansion. It hadn’t been that high since December 2005, and its new orders sub-index reached a peak unseen since August 2005. On Wall Street, some investors worried that the Federal Reserve would take the news as additional grounds for raising short-term interest rates – but in the big picture, it expresses the strength of the recovery. ISM’s service sector PMI had a reading of 56.0 in June.1

    

FACTORY ORDERS RISE 1.1%

June’s gain far outshined the 0.5% increase forecast by analysts surveyed by Briefing.com. This was a nice comeback for the indicator after the (revised) 0.6% decline in orders that the Census Bureau recorded for May.2

    

HEADLINES BOOST GOLD PRICES; OIL PULLS BACK

Geopolitical risk in Eastern Europe and the Middle East meant more interest in the yellow metal last week as investors sought a place to park some cash. In New York, gold settled at $1,310.60 per ounce Friday, up 1.35% for the week. NYMEX crude actually lost 0.28% for the week, settling Friday at $97.35.3

 

FRIDAY RALLY TURNS DOWN WEEK AROUND

Reports that Russian troops were no longer conducting maneuvers near Ukraine’s border helped the S&P 500 climb 1.15% Friday. The broad benchmark gained 0.33% across 5 days, closing the week at 1,931.59. Minor weekly gains also came for the Nasdaq (0.42% to 4,370.90) and the Dow (0.37% to 16,553.93).4

Weekly Economic Update for August 4, 2014

WeeklyMarketUpdate.jpgSUSTAINED HIRING, RENEWED CONFIDENCE

In July, 209,000 Americans found new jobs. Hiring topped 200,000 for a sixth straight month, which hasn’t happened in 17 years according to Labor Department data. The jobless rate ticked up to 6.2% and the underemployment (U-6) rate inched up to 12.2%, but that signaled more jobseekers. June also saw a 0.4% boost in consumer spending and incomes. The Conference Board’s July consumer confidence survey came in at an impressive 90.9, while the University of Michigan’s final July consumer sentiment index advanced to 81.8.1,2

   

TERRIFIC Q2 GDP, ISM INDEX RISES; FED STAYS COURSE

America’s economy expanded 4.0% in Q2. That was the first estimate from the Bureau of Economic Analysis, which also revised Q1 GDP upward last week to -2.1%. The Institute for Supply Management’s manufacturing PMI increased 1.8 points to a mark of 57.1 in July. As expected, the Federal Reserve announced it would cut monthly asset purchases to $25 billion in its July 30 policy statement.2,3

   

TWO TEPID HOUSING INDICATORS

May’s S&P/Case-Shiller home price index showed a 9.3% overall annual advance in house prices – nice, but down notably from the 10.8% yearly gain in the April edition. The National Association of Realtors said pending home sales slipped 1.1% in June, a disappointment after the 6.0% rise in May.2

Quarterly Economic Update for Q2, 2014

SwagertyGardner_Website_QuarterlyUpdate_Icon.jpgTHE QUARTER IN BRIEF
After a first quarter marked by dismal GDP and a tepid stock market, the second quarter of 2014 brought welcome change. The S&P 500 posted a Q2 gain of 4.69%. Hiring picked up, and so did inflation. The housing market left its winter slump behind. Gold rallied and so did oil, with unrest in Ukraine and Iraq providing some upward pressure on prices. The Federal Reserve incrementally reduced its bond purchases on schedule. Was the first quarter simply a bump in the road for the economy? History may record it as nothing more.1

   

DOMESTIC ECONOMIC HEALTH
Two notable trends emerged in the quarter. The job market improved, and yearly consumer inflation aligned with the Fed’s target. In tandem, these developments made Wall Street wonder if the Fed might raise interest rates a little sooner than anticipated.

 

By the end of Q2, the unemployment rate was down to 6.1% following job gains of 304,000 in April, 224,000 in May and 288,000 in June. In fact, by June the economy had created at least 200,000 jobs in five straight months, something that hadn’t happened since the late 1990s. The U-6 rate (the unemployed + the underemployed) reached a 69-month low of 12.1% in June.2

 

Syndicate content

Securities and advisory services offered through Cetera Advisor Networks LLC, member FINRA/SIPC. Cetera is not affiliated with any other named entity.

This site is published for residents of the United States only. Financial Advisors of Cetera Advisor Networks may only conduct business with residents of the states and/or jurisdictions in which they are properly registered. Not all of the products and services referenced on this site may be available in every state and through every advisor listed. For additional information please contact the advisor(s) listed on the site, visit the Cetera Advisor Networks site at www.ceteraadvisorrnetworks.com.               

Online Privacy Policy | Privacy Promise | Business Continuity | Important Disclosures | Order Routing

Website Design For Financial Services Professionals | Copyright 2018 AdvisorWebsites.com. All rights reserved