WEEKLY ECONOMIC UPDATE
January 18, 2016
WEEKLY QUOTE
“I don't think success
is harmful, as so
many people say.
Rather, I believe it
indispensable to
talent, if for nothing
else than to increase
the talent.”
- Jeanne Moreau
WEEKLY TIP
One way to save more
for 2016: reduce or
eliminate some of the
automatic monthly
charges on your bank
and credit card
statements (such as
gym memberships,
software fees, and
subscriptions).
WEEKLY RIDDLE
I weigh nothing, but
you can see me. Put
me in a box, and the
box will become
lighter. What am I?
Last week’s riddle:
A man and a woman
wearing very expensive
outfits manage, without
using wheels or any
form of assistance, to
push a 6-ton object
entirely through their
own physical effort.
Under what
circumstances are they
able to do this?
Last week’s answer:
They are astronauts in
outer space.
LIGHT SWEET CRUDE SETTLES AT $29.42
Oil closed at its lowest level in more than 12 years Friday, plummeting 11.3% for the
trading week on the NYMEX. Two factors contributed greatly to the rout: the Energy
Information Administration’s forecast of the global crude glut lasting well into 2017
and the imminent expiration of sanctions against Iran, which could mean greater
crude exports from that country. The EIA forecast West Texas Intermediate crude
prices to rise to the vicinity of $40 later this year.1,2
CONSUMER OPTIMISM REMAINS
Rising to 93.3 from its final 2015 mark of 92.6, the University of Michigan’s initial
January consumer sentiment index amounted to a pleasant surprise during a
gloomy week. Another consumer indicator was less positive: the Commerce
Department said that both headline and core retail sales dipped 0.1% in December.3
PRODUCER PRICE INDEX SLIPS 0.2%
This statistic is only part of the story regarding wholesale inflation in December.
Minus the volatile food and energy categories, producer prices rose 0.1% last month
according to the Labor Department.3
WORRIES ABOUT OIL, CHINA IMPEDE STOCKS
Another dip for Chinese equities and slumping oil prices led shares lower last week.
During January 11-15, the Dow lost 2.19%, the Nasdaq 3.34%, and the S&P 500
2.17%. At the close, the Dow stood at 15,988.15, the Nasdaq at 4,488.42, the S&P at
1,880.28. Even COMEX gold futures lost 0.7% for the week, settling Friday at
$1,090.70.4,5
THIS WEEK: U.S. financial markets are closed Monday in observation of Martin
Luther King, Jr. Day. Bank of America, Charles Schwab, Comerica, Delta Air Lines,
eBay, IBM, Morgan Stanley, Nautilus, Netflix, and UnitedHealth Group announce
earnings Tuesday, and China presents its Q4 and 2015 Gross Domestic Product
readings. On Wednesday, investors consider the December CPI, December housing
starts and building permits, and earnings from Briggs & Stratton, Brinker
International, Goldman Sachs, Kinder Morgan, Northern Trust, and Raymond
James. Thursday, earnings from Alaska Air Group, American Express, BoNY Mellon,
BB&T, E*TRADE, Fifth Third, J.B. Hunt, Schlumberger, Starbucks, Southwest
Airlines, Travelers, Union Pacific, and Verizon arrive along with the latest initial
claims figures. Friday, NAR’s December existing home sales numbers and the latest
Conference Board leading indicator index complement earnings from GE and
SunTrust Banks.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-8.25
-7.69
+7.13
+4.59
NASDAQ
-10.36
-1.80
+12.58
+9.37
S&P 500
-8.01
-5.64
+9.08
+4.60
REAL YIELD
1/15 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.67%
0.23%
1.00%
1.97%
4,6,7,8
Sources: forexlive.com, bigcharts.com, treasury.gov - 1/15/16
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.
Christopher Giordano is a Registered Representative with and, securities are offered through LPL
Financial, member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group,
a registered investment advisor and a separate entity from LPL Financial.
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.
Citations.
1 - marketwatch.com/story/oil-plunges-into-the-20s-a-barrel-on-iran-supply-woes-2016-01-15/ [1/15/16]
2 - reuters.com/article/us-eia-outlook-idUSKCN0UQ2BD20160112 [1/12/16]
3 - foxbusiness.com/markets/2016/01/15/stocks-nosedive-as-global-oil-prices-plunge.print.html [1/15/16]
4 - news.forexlive.com/!/us-stock-indices-end-the-day-down-but-off-lows-20160115 [1/15/16]
5 - marketwatch.com/story/gold-gains-for-the-session-but-falls-for-the-week-2016-01-15 [1/15/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F15%2F15&x=0&y=0 [1/15/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F15%2F15&x=0&y=0 [1/15/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F15%2F15&x=0&y=0 [1/15/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F14%2F11&x=0&y=0 [1/15/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F14%2F11&x=0&y=0 [1/15/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F14%2F11&x=0&y=0 [1/15/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=1%2F13%2F06&x=0&y=0 [1/15/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=1%2F13%2F06&x=0&y=0 [1/15/16]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=1%2F13%2F06&x=0&y=0 [1/15/16]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [1/15/16]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [1/15/16]