Weekly Economic Update: March 7, 2016

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Weekly Quote

“A tough lesson in life that one has to learn is that not everybody wishes you well” –Dan Rather

Weekly Tip

Simplify things for your tax preparer or CPA by organizing your financial records into three categories: income statements, expenses and deductions, and investments.

Weekly Riddle

You drop a coin into a bottle through its opening. Then, you push a cork into that same bottle opening to seal the opening. How do you get the coin out of the bottle without breaking the bottle or taking out the cork?

Last week’s riddle

I go back and forth constantly, but I never go forward. What am I?

Last week’s answer

A pendulum. [/column]

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242,000 New Jobs Created In February

Hiring picked up in America last month. In reporting this sizable net job gain in the second month of the year, the Labor Department also revised December and January hiring totals upward by a total of 30,000. That means payrolls have expanded by an average of 228,000 hires over the past three months. The headline unemployment rate remained at 4.9% last month while the U-6 rate including the underemployed fell to 9.7%. A year ago, the U-6 rate was at 11.0%.¹

ISM Indices Beat Expectations

The Institute for Supply Management’s manufacturing PMI rose 1.3 points in February to 49.5; its non-manufacturing PMI showed a February reading of 53.4. While the latest number on the manufacturing PMI still indicated contraction, both indices surpassed the forecasts of economists polled by MarketWatch, who expected a 48.5 reading for the manufacturing PMI and a 53.0 reading for the service sector PMI.²

Pending Home Sales Declined In January

For 17 consecutive months, the housing contract activity index, maintained by the National Association of Realtors, has shown a year-over-year gain. January saw the index fall 2.5%, reducing the annualized advance for pending home sales to only 1.4%. Analysts surveyed by MarketWatch thought the index would rise 0.5% in January.^2,3

DJIA Regains 17,000 Level

Blue chips rose for a third consecutive week. The Dow Jones Industrial Average settled at a 2-month peak of 17,006.77 Friday, up 2.20% in five days. The S&P 500 and Nasdaq Composite respectively advanced 2.67% and 2.76% for the week; the S&P closed at 1,999.99 Friday, the NASDAQ at 4,717.02. All three major indices left correction territory Friday. Oil prices were also up for a third straight week, a first since last May. A 9.58% weekly NYMEX advance took WTI crude to a Friday close of $35.92.^3,4

This Week

Monday: Earnings from Casey’s General Stores, Del Taco, Shake Shack, and Urban Outfitters.
Tuesday: Dick’s Sporting Goods and Navistar present earnings.
Wednesday: Investors assess earnings from Express, Hovnanian, Rosetta Stone, Smart & Final, and Square.
Thursday: Earnings announcements from Bon-Ton Stores, Dollar General, El Pollo Loco, Jamba, Marcus & Millichap, Stein Mart, and VeriFone in addition to the latest initial jobless claims figures.
Friday: Nothing major is scheduled for Friday.

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	-2.40	-6.02	+7.95	+5.43
NASDAQ	-5.80	-5.04	+13.88	+10.49
S&P 500	-2.15	-4.70	+10.28	+5.54
REAL YIELD	3/4 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.37%	0.25%	1.00%	2.07%

Sources

forexlive.com, bigcharts.com, treasury.gov – 01/29/16^5,6,7,8 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.

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Disclosure

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 price-weighted 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.