Randy C. Benning, CFP Presents:

MORE HOMES MOVED IN MAY

In a pleasant surprise for economists, both new and existing home sales picked up last month. The National Association of Realtors announced a 1.1% gain for resales, with the average house for sale spending only 27 days on the market. New home buying increased 2.9% in May, resulting in an annualized gain of 8.9%. The average sale price for a new home was $406,400, a record.1

   

LEADING INDICATORS IMPROVE

The Conference Board’s Leading Economic Index rose 0.3% for May, following gains of 0.2% for April and 0.4% for March. Most of the index’s components were positive for May and a steepening interest rate spread, a climb for the Institute for Supply Management’s new orders index, and greater consumer optimism about business and economic conditions were major factors. The LEI was up 3.5% year-over-year through May.2

 

CRUDE IS ON ITS LONGEST LOSING STREAK IN 2 YEARS

WTI crude settled at $43.01 at Friday’s closing bell, down 4.4% from the end of last week. This decline marked the fifth straight weekly retreat for oil; an 8-week losing streak ended in August 2015. Oil is now in a bear market.3

 

STOCKS ADVANCE

All three of the major U.S. equity indices had made 5-day gains by the time trading wrapped up on Friday. The Dow Jones Industrial Average had added just 0.05%, advancing to 21,394.76, and the S&P 500 had improved 0.21% to 2,438.30. In contrast, the Nasdaq Composite rose 1.84% to 6,265.25. Even after this last sideways week, the Dow 30 ended Friday’s session up 1.49% month-over-month.4

 

THIS WEEK: On Monday, the Census Bureau shares data on May hard goods orders. Tuesday sees the release of the latest consumer confidence index from the Conference Board, plus earnings reports from Darden Restaurants and KB Home. Wednesday, the NAR puts out its May pending home sales report, and Franklin Covey, General Mills, Monsanto, Paychex, and Pier 1 announce earnings. The third estimate of Q1 GDP appears Thursday along with a new initial unemployment claims report and earnings announcements from ConAgra Brands, Constellation Brands, Micron Technology, Nike, and Walgreens Boots Alliance. The final June University of Michigan consumer sentiment index, May consumer spending figures, and the May PCE price index arrive on Friday.

 

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+8.26	+18.79	+13.85	+6.01
NASDAQ	+16.39	+27.60	+23.32	+14.20
S&P 500	+8.91	+15.38	+16.53	+6.22
REAL YIELD	6/23 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.45%	0.24%	-0.42%	2.70%

 Randy C. Benning, CFP®, President, License # 0816882, Benning Financial Group, LLC. Investment Advisory Services offered through Benning Financial Group, LLC, A Registered Investment Advisor, Benning Financial Group, LLC, is not affiliated with Triad Advisors. Securities offered through Triad Advisors Member FINRA, SIPC

Sources: wsj.com, bigcharts.com, treasury.gov – 6/23/174,5,6,7

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.

---

Citations.

1 – foxbusiness.com/features/2017/06/23/new-home-sales-rise-in-may-as-prices-hit-record-level-update.html [6/23/17]

2 – haver.com/comment/comment.html?c=170622d.html [6/22/17]

3 – marketwatch.com/story/oil-prices-edge-up-as-big-producers-stick-to-cuts-2017-06-23-6103497/ [6/23/17]

4 – markets.wsj.com/us [6/23/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F23%2F16&x=0&y=0 [6/23/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F23%2F16&x=0&y=0 [6/23/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F23%2F16&x=0&y=0 [6/23/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F22%2F12&x=0&y=0 [6/23/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F22%2F12&x=0&y=0 [6/23/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F22%2F12&x=0&y=0 [6/23/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F22%2F07&x=0&y=0 [6/23/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F22%2F07&x=0&y=0 [6/23/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F22%2F07&x=0&y=0 [6/23/17]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/23/17]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/23/17]  

Randy C. Benning, CFP Presents:

FED DELIVERS EXPECTED & UNEXPECTED NEWS

As Wall Street anticipated, the Federal Reserve raised interest rates on June 14. The Federal Open Market Committee voted 8-1 to take the benchmark interest rate north by a quarter-point to the 1.00-1.25% range. The Fed also said it would begin to reduce its $4.5 trillion balance sheet at some point “this year” by slowing reinvestments. As a start, it will let $6 billion per month in Treasury holdings run off, along with $4 billion per month in agency debt and mortgage-linked securities. This implies upward pressure on long-term interest rates.1,2

      

RETAIL SALES, HEADLINE INFLATION BOTH RETREAT

The Consumer Price Index declined 0.1% in May, noted the Bureau of Labor Statistics; core consumer inflation rose 0.1%. A bigger May decline came for retail purchases – the Census Bureau said that they fell 0.3% even with car sales factored out.3

   

HOUSING STARTS SLIP

The Census Bureau’s new residential construction snapshot showed groundbreaking at an 8-month low, with total housing starts down 5.5% in May. Total building permits decelerated 4.9% last month to their slowest pace since April 2016.4

 

GAUGE OF SENTIMENT DESCENDS

In its preliminary June edition, the University of Michigan’s consumer sentiment index fell short of expectations. Economists, polled by Briefing.com, forecast a reading of 97.0 for the index, but it came in at 94.5.3

 

DOW 30 OUTPACES S&P 500

Rising 0.53% in five days, the Dow Jones Industrial Average ended the week at 21,384.28. The S&P 500 made a weekly advance of 0.06% to a Friday close of 2,433.15. Tech shares kept selling off, resulting in the Nasdaq Composite’s 0.90% weekly descent to a Friday settlement of 6,151.76. The Dow Jones Utility Average had the best week among consequential U.S. equity indices, rising 1.75%.5

 

THIS WEEK: Nothing major is scheduled for Monday. Tuesday, Adobe Systems, FedEx, La-Z-Boy, Lennar, and Red Hat all present earnings. Wednesday offers May existing home sales figures and earnings announcements from CarMax, Oracle, and Winnebago. Earnings news from Accenture, Barnes & Noble, Bed Bath & Beyond, Carnival, and Sonic arrives Thursday, plus new initial jobless claims numbers. Friday, investors consider May new home sales and Q2 results from Finish Line.

 

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+8.21	+20.59	+13.50	+5.68
NASDAQ	+14.28	+26.97	+22.83	+13.42
S&P 500	+8.68	+17.09	+16.24	+5.87
REAL YIELD	6/16 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.49%	0.15%	-0.54%	2.73%

 Randy C. Benning, CFP®, President, License # 0816882, Benning Financial Group, LLC. Investment Advisory Services offered through Benning Financial Group, LLC, A Registered Investment Advisor, Benning Financial Group, LLC, is not affiliated with Triad Advisors. Securities offered through Triad Advisors Member FINRA, SIPC

Sources: wsj.com, bigcharts.com, treasury.gov – 6/16/175,6,7,8

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.

---

Citations.

1 – marketwatch.com/story/fed-raises-interest-rates-to-reduce-balance-sheet-this-year-2017-06-14 [6/14/17]

2 – businessinsider.com/federal-reserve-rate-hike-plan-to-unwind-45-trillion-balance-sheet-2017-6 [6/14/17]

3 – briefing.com/investor/calendars/economic/2017/06/12-16 [6/16/17]

4 – reuters.com/article/us-usa-economy-idUSKBN197277 [6/16/17]

5 – markets.wsj.com/us [6/16/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F16%2F16&x=0&y=0 [6/16/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F16%2F16&x=0&y=0 [6/16/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F16%2F16&x=0&y=0 [6/16/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F15%2F12&x=0&y=0 [6/16/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F15%2F12&x=0&y=0 [6/16/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F15%2F12&x=0&y=0 [6/16/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F15%2F07&x=0&y=0 [6/16/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F15%2F07&x=0&y=0 [6/16/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F15%2F07&x=0&y=0 [6/16/17]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/16/17]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/16/17]  

Randy C. Benning, CFP Presents:

AN UPBEAT REPORT ON THE SERVICE SECTOR

The Institute for Supply Management’s May non-manufacturing purchasing manager index displayed a reading of 56.9 last week, showing expansion in U.S. service industries for an eighty-ninth straight month. Although the gauge declined 0.6 points from its April mark, it signaled a solid pace of growth. The index’s employment component rose 6.4 points to a mark of 57.8, as 15 industries added workers in May. The PMI has averaged a reading of 55.9 over the past 12 months.1

       

FACTORY ORDERS DECLINED IN APRIL

According to a new Census Bureau report, they decreased 0.2%. That marked their first month-over-month retreat of 2017. The 0.2% gain for March factory orders, however, was revised up to 1.0%. Orders increased by an average of 0.7% per month in the first quarter.2

   

ABUNDANT SUPPLY HURTS OIL

WTI crude lost 3.8% during June 5-9, tumbling to a $45.83 settlement on the NYMEX Friday. The U.S. rig count rose again last week, as it has every week for the past five months. While OPEC has vowed to reduce production by 1.2 million barrels per day, daily American oil output has increased by almost 600,000 barrels, so far, this year.3

 

TWO MAJOR INDICES RETREAT; A THIRD RISES

Last week, the Nasdaq Composite fell 1.55% to 6,207.92, while the S&P 500 dipped 0.30% to 2,431.76. On the other hand, the Dow Jones Industrial Average managed to gain 0.31% on its way to a Friday close of 21,271.28. The CBOE VIX volatility index soared 17.03% for the week, settling Friday at 11.41.4

THIS WEEK: Nothing major is scheduled for Monday. The Bureau of Labor Statistics releases the May Producer Price Index on Tuesday; in addition, H&R Block and Wiley announce quarterly results. Wednesday, investors react to the Federal Reserve’s latest monetary policy decision, the May Consumer Price Index, the May retail sales report, and quarterly results from Jabil and Liberty Tax. A new initial jobless claims report arrives on Thursday, plus a report on May industrial output and earnings announcements from Bob Evans Farms and Kroger. On Friday, the University of Michigan’s preliminary June consumer sentiment index appears, along with data on May housing starts and building permits.

 

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+7.63	+18.27	+13.89	+5.85
NASDAQ	+15.32	+25.19	+23.44	+14.12
S&P 500	+8.62	+14.95	+16.69	+6.13
REAL YIELD	6/9 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.43%	0.12%	-0.50%	2.69%

Randy C. Benning, CFP®, President, License # 0816882, Benning Financial Group, LLC. Investment Advisory Services offered through Benning Financial Group, LLC, A Registered Investment Advisor, Benning Financial Group, LLC, is not affiliated with Triad Advisors. Securities offered through Triad Advisors Member FINRA, SIPC

Sources: wsj.com, bigcharts.com, treasury.gov – 6/9/174,5,6,7

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.

---

Citations.

1 – instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm [6/5/17]

2 – briefing.com/Investor/Calendars/Economic/Releases/facord.htm [6/5/17]

3 – marketwatch.com/story/oil-prices-pinned-down-by-strong-dollar-supply-worries-2017-06-09 [6/9/17]

4 – markets.wsj.com/us [6/9/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F9%2F16&x=0&y=0 [6/9/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F9%2F16&x=0&y=0 [6/9/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F9%2F16&x=0&y=0 [6/9/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F8%2F12&x=0&y=0 [6/9/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F8%2F12&x=0&y=0 [6/9/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F8%2F12&x=0&y=0 [6/9/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F8%2F07&x=0&y=0 [6/9/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F8%2F07&x=0&y=0 [6/9/17]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F8%2F07&x=0&y=0 [6/9/17]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/9/17]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/9/17]  

Randy C. Benning, CFP Presents:

JOB CREATION, JOBLESS RATE DOWN IN MAY

A day after ADP’s employment change report estimated a hiring gain of 253,000 in May, the Department of Labor’s latest jobs report told a far different story. It said employers added just 138,000 workers last month. The U-3 jobless rate fell to a 16-year low of 4.3% in May, partly because of people dropping out of the labor force. The U-6 rate, counting the underemployed, decreased to a 10-year low of 8.4%. Annualized wage growth improved 0.2% to 2.5%.1,2

      

CONSUMER CONFIDENCE INDEX DECLINES

The Conference Board’s monthly consumer confidence gauge remained well north of 100 in May. It came in at 117.9. The index actually descended 1.5 points from its (downwardly revised) April reading of 119.4.1

   

FACTORY GROWTH MAINTAINS ITS PACE

Rising a tenth of a percentage point to 54.9, the Institute for Supply Management’s manufacturing purchasing manager index showed healthy sector expansion in May. ISM last measured a sector contraction (a reading below 50) in August.3

   

PERSONAL SPENDING INCREASES

In April, consumer spending grew by 0.4% according to the Bureau of Economic Analysis. Additionally, the BEA revised the previously flat March personal spending number up to a 0.3% gain. Personal incomes also rose 0.4% in the fourth month of the year, twice the improvement seen in March.1

  

NO REINING IN THE BULLS

Rising 0.93% across four trading days, the S&P 500 ended last week at 2,439.07. The Nasdaq Composite continued its red-hot run, gaining 1.50% for the week to a June 2 close of 6,305.80. Settling at 21,206.29 Friday, the Dow Jones Industrial Average added 0.56% across its last four trading sessions. The CBOE VIX “fear index” closed at a remarkably low 9.79 Friday, down 30.27% YTD.4,5

 

THIS WEEK: ISM’s May non-manufacturing PMI appears Monday, along with data on April factory orders, and earnings from Casey’s General Stores, Dave & Buster’s, and Thor Industries. Conn’s, Fred’s, and Michaels Companies announce earnings on Tuesday. Navistar reports quarterly results on Wednesday. Thursday, Wall Street examines new initial jobless claims figures and earnings news from Dell Technologies, J.M. Smucker, and Verifone. Nothing major is slated for Friday.

 

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	+7.31	+18.88	+15.00	+5.52
NASDAQ	+17.14	+26.84	+25.90	+14.12
S&P 500	+8.94	+15.86	+18.17	+5.88
REAL YIELD	6/2 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.36%	0.27%	-0.59%	2.57%

 Randy C. Benning, CFP®, President, License # 0816882, Benning Financial Group, LLC. Investment Advisory Services offered through Benning Financial Group, LLC, A Registered Investment Advisor, Benning Financial Group, LLC, is not affiliated with Triad Advisors. Securities offered through Triad Advisors Member FINRA, SIPC

Sources: wsj.com, bigcharts.com, treasury.gov – 6/2/175,6,7,8

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.

---

Citations.

1 – briefing.com/investor/calendars/economic/2017/05/29-02 [6/2/17]

2 – nytimes.com/2017/06/02/business/economy/jobs-report.html [6/2/17]

3 – tradingeconomics.com/united-states/business-confidence [6/24/17]

4 – google.com/finance?q=INDEXDJX:.DJI&ei=wccxWdD3B8GB2AaH_paYDg [6/2/17]

5 – markets.wsj.com/us [6/2/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F2%2F16&x=0&y=0 [6/2/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F2%2F16&x=0&y=0 [6/2/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F2%2F16&x=0&y=0 [6/2/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F1%2F12&x=0&y=0 [6/2/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F1%2F12&x=0&y=0 [6/2/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F1%2F12&x=0&y=0 [6/2/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F1%2F07&x=0&y=0 [6/2/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F1%2F07&x=0&y=0 [6/2/17]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F1%2F07&x=0&y=0 [6/2/17]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/2/17]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/2/17]