Monthly Archives: August 2016

Yellen Opens Door for 2016 Rate Hike

The Federal Reserve kicked off its annual monetary policy meetings in Wyoming today.  In the past, Fed officials have used this meeting to review and adjust their current monetary policies.  Financial markets have been fixated on every move the Fed makes (or doesn’t make) so the outcome of this meeting has been highly touted.  This morning, Fed Chair Janet Yellen issued prepared remarks and said, “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months.”  Continue reading

Consumer Spending Falls in July

U.S. retail sales came in “flat” in July, the Commerce Department announced this morning.  Overall, it appears that consumers spent money on automobiles, which saw a 1.1% rise in sales.  However, when auto sales are excluded, retail sales actually declined by 0.3% in July, suggesting a pause among consumers, at least for this month.  This figure is very closely watched by market participants, as it is a gauge on consumer sentiment and the health of the broader U.S. economy.  At the same time, retail sales are only a piece of personal expenditures we see from the U.S. consumer; consumption of services make up nearly two-thirds of all spending. Continue reading

U.S. Adds 255,000 Jobs in July

The Labor Department released its monthly jobs numbers today, which showed the U.S. gained 255,000 jobs last month, exceeding all economist forecasts.  June’s already strong job growth number was revised up to 292,000 (from 287,000).  Wages also climbed 0.3%, showing the U.S. labor market is strong and may sustain consumer spending into the second half of the year.  The jobless rate held steady at 4.9% as roughly the same number of people entered the labor market as found jobs.  Continue reading

Earnings Season

We are now past the halfway mark in this earnings season and with 63% of the companies in the S&P 500 reporting earnings to date for Q2 2016, 71% have reported earnings above the mean estimate and 57% have reported sales above the mean estimate.  Overall, earnings have been better than expected thus far and are indicating that the U.S. economy is on better footing than previously estimated.  Earnings on average have declined approximately 3.8% year-over-year, but that is better than the 5.5% decline that was predicted by analysts.    The Energy sector is reporting the largest year-over-year decline in earnings with a decline of 85.6% thus far.   Continue reading