Weekly Economic Update – January 1, 2018

Weekly Economic Update – January 1, 2018

CONSUMER CONFIDENCE DECLINES

In December, the Conference Board’s monthly index fell sharply from its lofty November reading of 128.6. That number was a 17-year high. Economists polled by Bloomberg expected a retreat to 128.0; instead, the gauge dropped to 122.1, which was still one of its best readings in the past 15 years. Lynn Franco, the Conference Board’s director of economic indicators, noted that consumer expectations remain at “historically strong levels, suggesting economic growth will continue well into 2018.”1

OIL ENDS 2017 ABOVE $60

The yearlong comeback of light sweet crude culminated in a December 29 NYMEX close of $60.42, marking the commodity’s best settlement since the spring of 2015. Signs of reduced output and supply disruptions helped oil rally last week.2

HOME PRICES UP 6.2% in 12 MONTHS

That is the conclusion of the October S&P CoreLogic Case-Shiller home price index, a survey of home values across 20 U.S. regions released last week. In other housing news, the National Association of Realtors pending home sales index rose 0.2% in November, taking its annualized gain to 0.8%. The small advance is understandable; across the 12 months ending in November, existing home inventory thinned by nearly 10%.3

A TERRIFIC YEAR FOR EQUITIES CONCLUDES

In 2017, the Dow Jones Industrial Average gained 25.08%; the S&P 500, 19.42%; the Nasdaq Composite, 28.24%. The year’s last market week saw investors pocketing some gains: across four days, the Dow retreated 0.06% to 24,719.22; the S&P, 0.38% to 2,673.61; the Nasdaq, 0.80% to 6,903.39. The Russell 2000 small-cap benchmark finished 2017 at 1,535.51, rising 13.14% for the year; the CBOE VIX “fear index” lost 21.37% during 2017, wrapping up the year at 11.04.4,5

THIS WEEK: Monday, U.S. financial markets are closed in observance of New Year’s Day. Nothing major is slated for Tuesday. Wednesday, the Federal Reserve releases the minutes from its December policy meeting, the Institute for Supply Management presents its December factory PMI, and Rite Aid announces quarterly earnings. Thursday, a new Challenger job-cut report and ADP payrolls report arrive along with earnings from Monsanto, Sonic, and Walgreens Boots Alliance. The Department of Labor’s December employment report appears Friday, plus quarterly results from Constellation Brands.

% CHANGE 2017 1-YR CHG 5-YR AVG 10-YR AVG
DJIA +25.08 +24.72 +18.21 +8.49
NASDAQ +28.24 +27.09 +26.64 +15.81
S&P 500 +19.42 +18.87 +18.13 +8.08
REAL YIELD 12/29 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.44% 0.55% -0.73% 1.78%

Sources: wsj.com, bigcharts.com, treasury.gov – 12/29/174,6,7,8

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.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. 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 market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a 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 a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. 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. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. 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 – businessinsider.com/consumer-confidence-conference-board-december-2017-2017-12 [12/27/17]

2 – marketwatch.com/story/oil-ends-above-60-for-the-first-time-in-about-2-12-years-2017-12-29 [12/29/17]

3 – tinyurl.com/ycwuvg59 [12/27/17]

4 – markets.wsj.com/us [12/29/17]

5 – finance.google.com/finance?q=INDEXSP:.INX&ei=5rRGWvGeL4GC2Aaah52YDw [12/29/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F29%2F16&x=0&y=0 [12/29/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F29%2F16&x=0&y=0 [12/29/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F29%2F16&x=0&y=0 [12/29/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F28%2F12&x=0&y=0 [12/29/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F28%2F12&x=0&y=0 [12/29/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F28%2F12&x=0&y=0 [12/29/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=12%2F28%2F07&x=0&y=0 [12/29/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=12%2F28%2F07&x=0&y=0 [12/29/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=12%2F28%2F07&x=0&y=0 [12/29/17]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [12/29/17]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [12/29/17]