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Thoughts to Ponder and The Market Update January 9

Thoughts to Ponder and The Market Update January 9
January 9, 2017 abryant



Thoughts to Ponder . . .

  • Your mind needs exercise just as much as your body does, that’s why I think of jogging every day.
  • The odds of going to the store for a loaf of bread and coming out with ONLY a loaf of bread are three billion to one.
  • Sometimes I pretend to be normal, but it gets boring so I go back to being myself.
  • A cookie a day keeps the sadness away.


And Now on to The Market Update . . .

Now that the holidays are over, let’s see if the Dow Jones Industrial Average can break the 20,000 mark.

  • Last week the index came very close, but investor concerns about U.S. and China trade relations had many sitting on the sidelines.
  • In addition, many people are just getting back from vacation and getting things going for the new year and the stock market was not their primary focus.


Even though this week had enough economic news to impact the markets, it did not seem like many were paying attention.

  • The ADP Employment Report, which typically can draw a significant market reaction, did not seem to do much in the investment community.
  • ADP reported a softer labor report than most experts had anticipated.
  • ADP announced that 153,000 new jobs were added in December.
  • Analysts were expecting closer to 172,000.


In the housing market, construction spending picked up heading into the latter part of the year.

  • The latest report for November 2016 showed a jump in spending by 0.9 percent.
  • That was significantly higher than analyst’s expectations.
  • Additionally, the spread between construction spending at this point versus the prior year increased to 4.1 percent.
  • This was a healthy increase from the prior month where the spread year over year was only 3.4 percent.
  • This is the best reading on construction spending since June 2016.
  • Residential construction accounted for a 1.0 percent increase in the report and the largest portion of the gain was in single-family sector.


The Mortgage Bankers Association of America reported huge declines in refinance applications for the final week of the year.

  • According to the MBA’s latest report, refinance applications declined 22.0 percent.
  • Purchase applications only dipped 2.0 percent despite it being a major vacation week.
  • Mortgage rates have stopped moving upward and have even declined slightly in the last couple of weeks.
  • Now that the holidays are over, many eyes will be watching the direction of the housing market.
  • Many experts are anticipating the purchase and sale market to be the best since the 2008 recession.


On Wednesday, the FOMC released their minutes from the Open Market Committee Meeting.

  • The theme that seemed to come from reading the minutes is that the Fed is taking a wait and see attitude toward future rate increases.
  • There are many uncertainties regarding future government spending and tax cuts under the Trump presidency.
  • Any of the talked about initiatives can have a major impact on inflation and economic productivity.
  • For the time being, the Fed is planning for two interest rate increases in 2017.
  • However, they clearly indicated that they will adjust their forecasts as needed with so much unchartered governmental decisions lying ahead.


This week’s potential market moving reports are:

  • Monday January 9th – Labor Market Index
  • Tuesday January 10th – JOLTS Report
  • Wednesday January 11th – MBA Applications
  • Thursday January 12th – First Time Jobless Claims
  • Friday January 13th – Producer Price Index and Retail Sales