The Miller Financial Group
Stocks Stall on Jobs Data

Weekly Update - January 13, 2014 

In This Issue
Markets stalled in the first full week of 2014, with major indices ending on a mixed note. For the week, the S&P 500 gained 0.6%, the Dow lost 0.2%, and the Nasdaq rose 1.03%. [1] 

Friday's December Employment Situation report showed that job growth slowed significantly in December, adding just 74,000 new jobs. This was well below consensus estimates, which expected a number in the neighborhood of 200,000 new jobs. At odds with the dismal jobs data, the household survey showed a very large drop in unemployment, causing the headline unemployment number to fall to 6.7%, very close to the Fed's goal of 6.5%.[2] 

 

Markets reacted nervously to the unexpectedly negative data, which is completely out of line with the generally positive labor trends of the past weeks and months. One way for unemployment to drop even as job growth declines is for people to quit searching for jobs, thus dropping out of the labor force. In December, the labor force participation rate dropped to its lowest in more than three decades. However, labor force participation jumped in November, so it's possible that the December data is a statistical outlier.[3] Divergences between the two surveys do occasionally happen and economists usually wait a month or so for revisions to be made that straighten out the data.

Bottom line: we're getting very close to the Fed's threshold rate of 6.5% unemployment, but the overall labor market is still weak. Given this weakness, the Fed will probably need to clarify its tapering plans and give guidance about how critical that 6.5% floor really is. 

 
Looking ahead, earnings season will be kicking off this week. First up are several major financial firms; like JPMorgan Chase [JPM], Wells Fargo [WFC], Bank of America [BAC], Citigroup [C],[4] and investors, will be taking a hard look to get a sense of how fourth quarter earnings season will go. If earnings continue their positive trend, investors could see further upside; if earnings disappoint, investors may decide to take some more profits off the table and wait for better news.

 

ECONOMIC CALENDAR:

Tuesday: Retail Sales, Import and Export Prices, Business Inventories

Wednesday: Producer Price Index, Empire State Mfg. Survey, EIA Petroleum Status Report, Beige Book

Thursday: Consumer Price Index, Jobless Claims, Treasury International Capital, Philadelphia Fed Survey, Housing Market Index, Ben Bernanke Speaks 11:10 AM ET

Friday: Housing Starts, Industrial Production, Consumer Sentiment 

 

 

 



Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance and  Treasury.gov. International performance is represented by the MSCI EAFE Index. Corporate bond performance is represented by the DJCBP. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.  

HEADLINES: 

 

Yellen confirmed as next Fed chairThe Senate voted to confirm current Federal Reserve vice chairman Janet Yellen as the next Fed chairman. She will replace current chairman Ben Bernanke when his term ends at the end of January. A major focus of her tenure will be the unwinding of the central bank's unprecedented quantitative easing programs.[5]

 

Wholesale inventories grew in November. Business inventories increased 0.5% in November, following a 1.3% increase in October. Inventory growth has been strong over the last few months, suggesting firms have confidence in consumer demand and that restocking could contribute significantly to Q4 economic growth.[6] 

 

China exports slow. Chinese exports declined more than expected in December, though the drop may be due to changes in how exports are calculated. Regulators clamped down on speculative trading activities disguised as export deals. Economists are optimistic that a brighter 2014 will cause export activity to pick up in the world's second largest economy.[7] 

 

Retailers cut forecastsA disappointing holiday season led to several retailers cutting 2014 earnings forecasts. Despite aggressive actions to lure shoppers, a shortened shopping season, unseasonably cold weather, and anemic spending combined to hit retailer revenues hard.[8]  

 
 

 

 

Quote Of The Week
Quote Of The Week
Fountain Pen

 

 

"Courage is being scared to death...and saddling up anyway."  - John Wayne

 

Recipe Of The Week
Recipe Of The Week
Fork and Knife

 

No-Bake Peanut Butter Clusters

 

  

 Crunchy, delicious, and easily stored in airtight container. 

Recipe from RealSimple.com.

 

Ingredients: 

 

1 (24-ounce) package vanilla bark coating

1 (8-ounce) jar crunchy peanut butter

2 cups mini marshmallows

3 cups crisp rice cereal

3 cups toasted oat O-shaped cereal 

 

Directions: 

  1. Microwave bark in a large glass bowl at HIGH 2 1/2 to 3 minutes, stirring mixture every 30 seconds until melted.
  2. Stir in peanut butter until blended. Add remaining ingredients, and stir until well coated
  3. Drop by heaping teaspoonfuls onto wax paper, and let stand 1 hour or until firm. Store in an airtight container.

 

 

Tax Tips
Tax Tips
Document

 

Calculate Home Rental Expenses

 

Do you own a home and rent it to others part of the year? To calculate the prorated expenses, total the number of days (personal and rental), then divide the number of rental days by the total days in the year. If you own part interest in a rental home and rent it out, you can deduct your portion of expenses. Speak to a tax professional to learn more about the tax implications of rental property.

 

Golf Tip
Golf Tip
Golfer

 

Hitting High?

 

Are you pulling in your arms just before impact and slicing the ball? Practice taking your eyes off the ball just before impact and looking toward the target. Your hips and chest will rotate through impact and your arms will maintain full extension. - Tip from Golf Digest.

 

Healthy Lifestyle
Healthy Lifestyle
Medical Cross

 

Brighter Smile

 

Looking for brighter teeth? Instead of turning to harsh chemical whiteners, turn to your toothbrush. You can reduce tarter by 60 percent with your toothbrush simply by brushing without toothpaste. Use a scrubbing motion to clean the insides of your top and bottom teeth for 30 seconds then buff the outer surfaces. This procedure also reduces the possibility of bleeding gums. Rinse, then brush as normal with toothpaste.


Green Living
Green Living
Leaf

 

Buy Green Power

 

Does your community provide a green power option? Many communities make it possible to power your home using renewable sources of energy like wind and solar power. If so, invest in the environment and purchase renewable energy for a small additional cost each month. Check your options at eere.energy.gov/greenpower.

 

Share the Wealth of Knowledge!

 

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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. 

 

Diversification does not guarantee profit nor is it guaranteed to protect assets.

 

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. 

 

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896. 

 

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies. 

 

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia. 

 

The Dow Jones Corporate Bond Index is a 96-bond index designed to represent the market performance, on a total-return basis, of investment-grade bonds issued by leading U.S. companies. Bonds are equally weighted by maturity cell, industry sector, and the overall index. 

 

The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index. 

 

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market. 

 

Google Finance is the source for any reference to the performance of an index between two specific periods. 

 

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. 

 

Past performance does not guarantee future results. 

 

You cannot invest directly in an index. 

 

Consult your financial professional before making any investment decision. 

 

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors. 

 

These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information. 

 

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[1]  http://briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-january-6-2014.htm 

 

[2]  http://briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-january-6-2014.htm#ixzz2q86oe2lb 

 

[3]  http://www.reuters.com/article/2014/01/10/us-usa-economy-idUSBREA090FP20140110 

 

[4]  http://www.cnbc.com/id/101326378 

 

[5]  http://www.bloomberg.com/news/2014-01-09/yellen-says-u-s-economy-may-strengthen-this-year-time-reports.html 

 

[6]  http://briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-january-6-2014.htm 

 

[7]  http://www.reuters.com/article/2014/01/10/us-china-economy-trade-idUSBREA0905L20140110 

 

[8]  http://www.smdailyjournal.com/articles/business/2014-01-10/stocks-mixed-as-retailers-give-weaker-outlook/1776425116243.html 

 

 

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