Markets
For the week of Monday, August 18, 2014 through Friday, August 22, 2014:
- Standard & Poor’s 500 Index: 1.75%
- Dow Jones Industrial Average: 2.10%
- NASDAQ Composite: 1.69%
After weeks of worrying about the conflict in Eastern Europe, investors shifted their attention back to the likelihood of continued low interest rates. Investors were looking for signs from Fed Chairwoman Janet Yellen indicating the easy-money policies, which helped fuel rallies in the stock and bond markets, will continue, even as the U.S. economy shows signs of improvement. Stocks rose Tuesday after stronger housing market and consumer price data and earnings results. On Wednesday, the markets extended their winning streak after dipping mid-afternoon. Prices of Treasury bonds also fell after minutes from the Fed’s latest policy-setting meeting indicated officials debated whether to raise rates sooner than expected. The rally continued on Thursday, with the S&P 500 reaching an intraday record, after a better-than-expected reading on weekly jobs data. Indices were mixed on Friday amid new rumblings of Ukrainian unrest and no major revelations at the annual central bankers’ conclave in Jackson Hole.
Economic Data
Chain Store Sales Snapshot:
- Chain Store Sales fell 1.3% last week.
- Growth accelerated from 3.2% to 3.8% on a year ago basis.
Consumer Price Index:
- The consumer price index rose 0.1% in July.
- Overall, energy categories were weak, weighing on the headline number.
- The core CPI also increased 0.1%.
Housing Starts:
- July housing starts were a seasonally adjusted annual rate of 1.09 million.
- Single-family and multifamily contributed to the increase.
- Starts are 21.7% higher than last year.
- June’s revisions were positive.
MBA Mortgage Applications Survey:
- The MBA Mortgage Applications composite index rose 1.4%.
- Mortgage interest rates are at their lowest levels for this calendar year.
Jobless Claims:
- Initial claims for unemployment insurance decreased 14,000 to 298,000.
- The four-week moving average increased 4,750 to 300,750.
- Continuing claims slid 49,000 to 2.5 million.
Existing Home Sales:
- Existing-home sales increased 2.4% month-over-month to 5.15 million annualized units.
- The months of supply are stable at 5.5.
- Listings increased both month-over-month and year-over-year.
- House price appreciation increased to 4.9% year-over-year.
- June’s reading was revised downward to 5.03 million from 5.04 million units.
Earnings:
PetSmart, Inc. (NASDAQ: PETM)
- PetSmart earned $98.1 million, or $0.98 a share, compared to $93.4 million, or $0.89 a share, a year ago.
- Revenue increased to $1.72 billion from $1.7 billion last year.
- Analysts expected earnings of $0.94 a share, on revenue of $1.73 billion.
The Home Depot, Inc. (NYSE: HD)
- Home Depot earned $2.05 billion, or $1.52 a share, compared to $1.8 billion, or $1.24 a share, in the same quarter last year.
- Sales were reported at $23.81 billion, marking a 5.7% increase.
- Same store sales increased 6.4% in the U.S. and overall 5.8%.
- Analysts expected earnings of $1.45 a share on revenue of $23.61 billion.
Target Corp. (NYSE: TGT)
- Target earned $234 million, or $0.37 a share, compared to $611 million, or $0.95 a share, last year.
- Excluding data-breach-related expenses, Target earned $0.78 a share, slightly missing analysts’ estimates of $0.79 a share.
- Revenue increased 1.7% to $17.4 billion, slightly beating analysts’ expectations of $17.38 billion.
Hormel Foods Corporation (NYSE: HRL)
- Hormel earned $138 million, or $0.51 a share, compared to $113.6 million, or $0.42 a share, a year ago.
- Revenue increased to $2.28 billion.
- Analysts expected $0.48 a share on revenue of $2.24 billion.
Interest Rates
- The two-year Treasury rate rose five basis points to 0.46%.
- The five-year Treasury rate increased eight basis points to 1.62%.
- The 10-year Treasury rate rose eight basis points to 2.42%.
- The 30-year Treasury yield improved seven basis points to 3.21%.
Disclosures
This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
