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Weekly Economic Update

­MidAmerica Financial Resources Presents:

 

WEEKLY ECONOMIC UPDATE

 

 

 

WEEKLYQUOTE

 

“He who lives little, changes little.”

 

- Anatole France

 

 

WEEKLYTIP

 

Starting your career? Beware of spending money to maintain an image. If you are tempted to “fake it ‘til you make it,” you may soon be awash in consumer debt.

 

WEEKLYRIDDLE

 

It cannot see and it feels no pain, despite matter constantly going through its eye. What is it?

 

 

Lastweek’sriddle:

Sandra is running in a half-marathon and she passes the second person in the race. What position is she in?

Lastweek’sanswer:

Second place.

 

 

 

 

May 2, 2016

 

INCOME OUTDISTANCES SPENDING

Personal income rose 0.4% in March, yet the Commerce Department reported personal spending up just 0.1%. That mild uptick contributed to a poor first quarter for GDP; last week, the Bureau of Economic Analysis estimated Q1 growth at 0.5%.1

 

CONSUMER OPTIMISM declineS

The Conference Board’s consumer confidence index dipped 1.9 points in April to 94.2. Also descending was the University of Michigan’s consumer sentiment index, which ended April at 89.0 after concluding March at 91.0.1,2

A ROUNDUP OF HOUSING NEWS

New home sales fell 1.5% in March according to the Census Bureau, after a 0.4% retreat in February. The (just-released) February S&P/Case-Shiller home price index shows a 5.4% overall rise in home values across 12 months, down from 5.7% in the January edition. Lastly, the National Association of Realtors reported a 1.4% March gain in its pending home sales index.1

 

MAJOR INDICES RETREAT

The Nasdaq was the benchmark that stumbled hardest last week on Wall Street, falling 2.67% to settle at 4,775.36 Friday. April ended with the S&P 500 at 2,065.30 and the Dow at 17,773.64; the S&P lost 1.26% for the week; the Dow, 1.28%.3

 

THIS WEEK: Monday, April’s ISM manufacturing PMI appears plus earnings from AmeriGas, Anadarko Petroleum, Del Taco, Denny’s, Ferrari, Fossil, Loews Corp., and Sysco. Tuesday earnings include results from Archer Daniels Midland, Avis Budget, Boise Cascade, CBS, Clorox, Cummins, CVS Health, Duke Energy, Estee Lauder, Etsy, GrubHub, Hyatt, Macerich, Molson Coors, Papa John’s, Pfizer, Pitney Bowes, Smart & Final, Sprint, Starwood Hotels & Resorts, Valero Energy, Vulcan Materials, and Western Union. On Wednesday, the Street looks at the April ISM services PMI, ADP’s April job-change report and earnings from Allstate, Chubb, Fitbit, GoDaddy, Green Dot, Humana, iHeart Media, Marathon Oil, Mosaic, Noble Energy, Priceline, Prudential Financial, Sempra Energy, Sunoco, Tesla, Tesoro, Time Warner, Transocean, TripAdvisor, Whole Foods, and Zynga. Thursday, an initial claims report and a new Challenger job-cut report appear, plus earnings announcements from Acadia Pharmaceuticals, Activision Blizzard, Alibaba, El Pollo Loco, Fluor, GoPro, Icahn Enterprises, Jamba, Kellogg, Kemper, Kraft Heinz, Merck, MGM Resorts, Motorola Solutions, Nvidia, Occidental Petroleum, Shell Midstream Partners, Wingstop, and Yelp. The Labor Department’s April jobs report arrives Friday, plus earnings from Allergan, Cigna, Exelon, Revlon, and Weyerhaeuser.

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

+2.00

-1.45

+7.75

+5.64

NASDAQ

-4.63

-4.94

+13.24

+10.56

S&P 500

+1.05

-1.97

+10.29

+5.76

REAL YIELD

4/29 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.12%

0.14%

0.75%

2.39%


Sources: wsj.com, bigcharts.com, treasury.gov - 4/29/164,5,6,7

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.

 

 

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Securities and advisory services offered through National Planning Corporation (NPC), Member FINRA/SIPC, a Registered Investment Adviser.
MidAmerica Financial Resources and Malan Financial Group are separate and unrelated companies to NPC.

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.

Citations.

1 - tradingeconomics.com/united-states/calendar [4/29/16]

2 - foxbusiness.com/markets/2016/04/29/consumer-sentiment-slips-in-april.html [4/29/16]

3 - markets.on.nytimes.com/research/markets/usmarkets/usmarkets.asp [4/29/16]

4 - markets.wsj.com/us [4/29/16]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F29%2F15&x=0&y=0 [4/29/16]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F29%2F15&x=0&y=0 [4/29/16]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F29%2F15&x=0&y=0 [4/29/16]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F29%2F11&x=0&y=0 [4/29/16]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F29%2F11&x=0&y=0 [4/29/16]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F29%2F11&x=0&y=0 [4/29/16]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=4%2F28%2F06&x=0&y=0 [4/29/16]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=4%2F28%2F06&x=0&y=0 [4/29/16]

5 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=4%2F28%2F06&x=0&y=0 [4/29/16]

6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [4/29/16]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [4/29/16]

 

 

 


The Costco / American Express Breakup

 

If you have a Costco AMEX card, you should be preparing for the transition to VISA.

 

Provided by MidAmerica Financial Resources

 

The longstanding, exclusive partnership between Costco and American Express is coming to an end. If you have a Costco AMEX card, what does this mean for you?

 

In May or June, you should get your new Costco VISA card. So if you make auto-payments to Costco, you should re-enter your credit card information (the new number, and any other changes) before June 20.1

    

June 20 is the deadline. Beginning that day, Costco will only accept VISA cards, cash, checks, debit and ATM cards, EBT cards, and Costco Cash cards as forms of payment.1

 

Citigroup is issuing the new Costco VISA card. The new card allows the cardholder to get 4% cash back on the first $7,000 in eligible gasoline purchases per year and 1% on eligible gasoline purchases thereafter. Cardholders will also receive 2% cash back on all other Costco and Costco.com purchases. Other perks include 3% cash back on restaurants and eligible travel purchases and 1% cash back on any other form of purchase.1

 

In comparison, the Costco AmEx card offered 3% cash back at gas stations nationwide (with a $4,000 annual ceiling on such rewards), and 2% cash back on eligible travel and dining purchases.1

   

This changeover is projected to affect about 10% of AmEx cardholders. Indeed, there are some people who signed up for their first AmEx card just because of the Costco-AmEx relationship.1

   

Will this changeover have any effect on credit scores? Citibank will not be reviewing credit reports pursuant to the account transfers, so the answer should be “no.” Costco AmEx cardholders can maintain their current line of credit.1

 

Will Costco AmEx cardholders have to pay down account balances by June 20? No. American Express says that Costco AmEx cardholders may still carry a balance after that date.1

      

MidAmerica Financial Resources may be reached at 618.548.4777 or greg.malan@natplan.com.

www.mid-america.us

 

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.

 

«RepresentativeDisclosure»

    

Citations.

1 - marketwatch.com/story/5-things-to-know-about-the-costco-and-amex-breakup-2016-02-11 [4/5/16]

 





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