December 29, 2016 – Weekly American Wealth Review

Weekly Letter

As our client, you may have received a letter this week from Securities America Financial Corporation stating that they are your “new broker/dealer.” These letters were distributed in error by Securities America, and are inaccurate. I have spoken with their management and they are in process of sending out a letter correcting their mistake, but in the mean time I wanted to extend our apologies for any confusion this may have caused. You do not have to do anything in response to this letter.

2016 has been an action-packed year with the S&P 500 going from being down roughly 10% in February to up nearly 10% as of the end of last week. We have also seen crude oil drop to lows of $26 then rise to nearly double that price as of this week. Finally, though many did not expect Brittan to vote in favor of exiting the European Union, it was even a greater surprise to watch markets rally just two days after the vote.

2017 is now just days away, and as we transition into the New Year, both U.S. stock and bond markets appear to be anticipating economic growth. On one hand the major stock market averages are in a positive trend while long term U.S. Treasury bonds are in a negative trend, however the world is generally not this simple. Though the stock market has been in a honeymoon phase on hopes of lower taxes, fewer regulations, and economic growth since the presidential election, that should change once the inauguration has taken place and investors realize that any expected change won’t happen right away.
We wish you and your loved ones health, prosperity and happiness in the new year.

Sincerely,
Laif E. Meidell, CMT

We hope you have a wonderful week and a great start to a new year,
Pat Meidell, Laif Meidell and Heidi Foster

Weekly Economic Update

HOUSEHOLD SPENDING SLOWS IN NOVEMBER

Last month, consumer spending increased 0.2%, while consumer incomes were flat. November was the first month in nine in which household incomes failed to rise, and the consumer spending advance was half that of October. Even so, with consumer confidence indices and other economic indicators becoming stronger, the November figures may represent an anomaly. Another Department of Commerce report revised third-quarter growth up to 3.5%.1

CONSUMER OPTIMISM AT A 13-YEAR PEAK

The University of Michigan’s last consumer sentiment index of 2016 came in at 98.2, 4.4 points above its final November mark. It has not been that high since January 2004. Economists polled by Thomson Reuters expected an advance to 98.0.2

HOME SALES RISE AS TEMPERATURES DROP

Resales were up 0.7% last month, according to the National Association of Realtors. The Census Bureau recorded a 5.2% November gain in new home buying. In October, new home sales fell 1.4%, while existing home sales improved 1.5%.3

CORE PCE PRICE INDEX SHOWS 1.6% YEARLY ADVANCE

The Federal Reserve’s preferred inflation meter was flat in November after ticking up 0.1% in October. The annualized gain was thereby reduced 0.2% to a number well under the central bank’s 2.0% target.1,3

SMALL WEEKLY GAINS FOR STOCKS

Across the last five trading days, the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all gained a little ground. The blue chips rose another 0.46% to 19,933.81; the S&P, another 0.25% to 2,263.79. As for the Nasdaq, the tech benchmark gained 0.47% to settle at 5,462.69 Friday. More consequential, perhaps, was the descent of the CBOE VIX. The “fear index,” gauging market volatility, ended the week at a remarkably low 11.44, falling 6.23% in five days.4

THIS WEEK

U.S. stock and bond markets will be closed Monday in observance of the Christmas Day holiday. Tuesday, the Conference Board releases its last consumer confidence index of 2016 and the October S&P/Case-Shiller 20-city home price index appears. The NAR issues its November pending home sales report on Wednesday. Investors consider the latest initial unemployment claims figures on Thursday. Nothing major is slated for Friday.