Bond and Devick Financial Network Presents:
WEEKLY ECONOMIC UPDATE
January 18, 2016
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 GDP
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. 10year TIPS real yield = projected return at maturity given expected inflation.
Securities and investment 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 priceweighted 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/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]