Alfred F. Matarazzo, CMFC Presents:
WEEKLY ECONOMIC UPDATE
September 21, 2015
WEEKLY QUOTE
“Love is, above all
else, the gift of
oneself.”
- Jean Anouilh
WEEKLY TIP
How long should you
keep hard-copy bank
account statements?
A year is often long
enough. Retain them
longer if you want to
use them to support
tax records.
WEEKLY RIDDLE
Brittany carried a
load of wood in a
wheelbarrow, yet the
wood was neither
straight nor crooked.
How could this be?
Last week’s riddle:
I lack lungs, yet I
constantly need oxygen;
I have no mouth, but
sufficient water will
drown me. What am I?
Last week’s answer:
Fire.
FED POSTPONES RATE MOVE, SIGNALS ONE SOON
The September interest rate hike Wall Street had long anticipated did not occur, as
the Federal Open Market Committee voted 9-1 against raising the federal funds rate
Thursday. In their September 17 policy statement, Federal Reserve officials noted
that recent “global economic and financial developments” had “somewhat” impeded
the U.S. economy and reduced inflation pressures, lessening the need to tighten. The
central bank’s latest dot-plot chart projected the benchmark interest rate at 0.40%
by the end of 2015 – hinting that an upward move might come as early as October.1
INFLATION HARDLY PRESENT IN AUGUST
Last month, the headline Consumer Price Index retreated 0.1% while the core CPI
advanced 0.1%. Through August, the headline CPI had risen just 0.2% during 2015
while the core CPI was up just 1.8% in the past 12 months – not quite the inflation
pressure that might prompt the Federal Reserve to tighten.2
A MINOR GAIN IN RETAIL SALES
Last month, Americans bought 0.2% more from retailers than they had in July, and
only 0.1% more with car and truck sales factored out. In July, overall retail sales rose
0.7% with core retail sales up 0.6%.3
HOUSING STARTS DECLINE, BUT PERMITS INCREASE
August saw 3.0% less groundbreaking according to the Census Bureau, but overall
housing starts were up 16.6% annually. Building permits rose 3.5% last month.4
INVESTORS RESET EXPECTATIONS
The Fed’s decision to leave interest rates unchanged left the market with more
questions than answers, yet stocks ended the week about where they began. Across
five days, the S&P 500 went -0.15% to 1,958.03, the Dow -0.29% to 16,384.79, and
the Nasdaq +0.10% to 4,827.23.5
THIS WEEK: Monday brings August existing home sales numbers plus quarterly
results from Lennar and Red Hat. On Tuesday, AutoZone, Carnival Cruise Lines,
ConAgra Foods, CarMax, Darden Restaurants, and General Mills all release earnings
news. A new factory PMI reading from China appears Wednesday. Thursday offers
reports on August new home sales and durable goods orders, initial jobless claims
and earnings from Accenture, Bed Bath & Beyond, Cintas, Jabil Circuit, KB Home,
Nike, and Pier 1; in addition, Fed chair Janet Yellen speaks on monetary policy in
Massachusetts. Friday, Wall Street considers the final government estimate of Q2
GDP and the University of Michigan’s final September consumer sentiment index.
% CHANGE
Y-T-D
1-YR CHG
5-YR AVG
10-YR AVG
DJIA
-8.07
-5.10
+10.89
+5.52
NASDAQ
+1.93
+5.09
+21.69
+12.50
S&P 500
-4.90
-2.65
+14.79
+5.91
REAL YIELD
9/18 RATE
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
0.58%
0.61%
1.00%
1.70%
Sources: wsj.com, bigcharts.com, treasury.gov - 9/18/156,7,8,9
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.
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20150921246SO
Securities and investment advisory services offered through FSC SECURITIES CORPORATION * A Registered Broker Dealer * Member FINRA and SIPC
Main Line Financial Advisors, LLC is a registered investment advisor and not affiliated with FSC Securities Corp.
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/federal-reserve-keeps-interest-rates-unchanged-but-forecasts-hike-this-year-2015-09-17 [9/17/15]
2 - news.investors.com/economy/091615-771278-inflation-eases-but-homebuilder-sentiment-rises.htm [9/16/15]
3 - marketwatch.com/economy-politics/calendars/economic [9/18/15]
4 - 247wallst.com/housing/2015/09/17/housing-starts-slow-in-august-after-july-estimates-revised-down/ [9/17/15]
5 - markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [9/18/15]
6 - markets.wsj.com/us [9/18/15]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F18%2F14&x=0&y=0 [9/18/15]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F18%2F14&x=0&y=0 [9/18/15]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F18%2F14&x=0&y=0 [9/18/15]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F17%2F10&x=0&y=0 [9/18/15]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F17%2F10&x=0&y=0 [9/18/15]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F17%2F10&x=0&y=0 [9/18/15]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=9%2F19%2F05&x=0&y=0 [9/18/15]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=9%2F19%2F05&x=0&y=0 [9/18/15]
7 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=9%2F19%2F05&x=0&y=0 [9/18/15]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [9/18/15]
9 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [9/18/15]
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