Weekly Economic Update for September 16, 2019

Presented by Beacon Financial Group


THE WEEK ON WALL STREET

Stocks edged toward all-time peaks during a relatively calm week marked by easing trade tensions. Friday marked the eighth straight daily advance for the Dow Jones Industrial Average. 1

Small-cap shares, as tracked by the Russell 2000 index, rose 4.85% in five days. The S&P 500 improved 0.96% for the week, while the Dow and Nasdaq Composite respectively advanced 1.57% and 0.91%. Foreign shares added 1.22%, according to the MSCI EAFE index. 2-4

 

A Delay for Planned October Tariff Hikes

Existing tariffs on $250 billion of Chinese imports were slated to rise from 25% to 30% on October 1, but the White House decided Thursday to postpone the increase until October 15, in a “gesture of good will” honoring a request from Chinese Vice Premier Liu He.

Bloomberg reported last week that some White House officials were considering an “interim” trade agreement that could pause some import taxes on Chinese products, so long as China agrees to buy specific U.S. crops and address intellectual property concerns. 5 

 

More Risk Appetite

Last week’s conciliatory gestures between the U.S. and China influenced the bond market. By Friday’s close, the 10-year Treasury yield had climbed to 1.90%, up 0.35% for the week after a big selloff. (A rise in bond yields generally reflects a drop in bond prices.) 6

 

Inflation Pressure Increases

Yearly core inflation reached a 13-month peak of 2.4% in August, according to the federal government’s Consumer Price Index. Core inflation (which excludes volatile food and fuel costs) has now increased for three straight months. 7

 

WHAT’S NEXT

This week, traders await the Federal Reserve’s latest policy announcement. Whether the Fed chooses to cut short-term interest rate, any guidance in the statement will be highly scrutinized, as Wall Street is eager to discern any hints about whether the Fed is prepared to continue cutting short-term rates.


TIP OF THE WEEK


Smart small-business owners hire a bookkeeper soon after launching their companies. Organized books can point out whether a business is successful and identify the areas in which it can improve.



THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: The Federal Reserve’s policy announcement is scheduled for 2:00pm EST, and Fed chair Jerome Powell is slated to address the media at a subsequent press conference.

Thursday: The National Association of Realtors issues its August existing home sales report.

Source: Econoday / Federal Reserve, September 13, 2019

The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. The release of data may be delayed without notice for a variety of reasons.

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Adobe (ADBE), FedEx (FDX)

Wednesday: General Mills (GIS)

Thursday: Darden Restaurants (DRI)

Source: Zacks, September 13, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.


QUOTE OF THE WEEK

“You cannot shake hands with a clenched fist.”

INDIRA GHANDI

Weekly Recap 9-16-2019.png


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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

CITATIONS:

1 - cnbc.com/2019/09/13/stock-markets-dow-sp-500-close-to-all-time-highs-on-wall-street.html [9/13/19]   

2 - money.cnn.com/data/markets/russell/ [9/13/19]   

3 - wsj.com/market-data [9/13/19]   

4 - quotes.wsj.com/index/XX/990300/historical-prices [9/13/19]

5 - tinyurl.com/y2obyd4e [9/12/19]

6 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [9/13/19]

7 - investing.com/economic-calendar/core-cpi-736 [9/12/19]

 

CHART CITATIONS:

wsj.com/market-data [9/13/19]   

quotes.wsj.com/index/SPX/historical-prices [9/13/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldYear&year=2019 [9/13/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [9/13/19]



Your Changing Definition of Risk in Retirement

Presented by Beacon Financial Group

During your accumulation years, you may have categorized your risk as “conservative,” “moderate,” or “aggressive,” and that guided how your portfolio was built. Maybe you concerned yourself with finding the “best-performing funds,” even though you knew past performance does not guarantee future results.

 

What occurs with many retirees is a change in mindset – it’s less about finding the “best-performing fund” and more about consistent performance. It may be less about a risk continuum – that stretches from conservative to aggressive – and more about balancing the objectives of maximizing your income and sustaining it for a lifetime.

 

You may even find yourself willing to forgo return potential for steady income.

 

A change in your mindset may drive changes in how you shape your portfolio and the investments you choose to fill it.

 

Let’s examine how this might look at an individual level.

 

Still Believe. During your working years, you understood the short-term volatility of the stock market, but accepted it for its growth potential over longer time periods. You’re now in retirement and still believe in that concept. In fact, you know stocks remain important to your financial strategy over a 30-year or more retirement period.

 

But you’ve also come to understand that withdrawals from your investment portfolio have the potential to accelerate the depletion of your assets when investment values are declining. How you define your risk tolerance may not have changed, but you understand the new risks introduced by retirement. Consequently, it’s not so much about managing your exposure to stocks but considering new strategies that adapt to this new landscape. Keep in mind that the return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. This is a hypothetical example used for illustrative purposes only.

 

Shift the Risk. For instance, it may mean that you hold more cash than you ever did when you were earning a paycheck. It also may mean that you consider investments that shift the risk of market uncertainty to another party, such as an insurance company. Many retirees choose annuities for just that reason.

 

The guarantees of an annuity contract depend on the issuing company’s claims-paying ability. Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits. Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contract. Withdrawals and income payments are taxed as ordinary income. If a withdrawal is made prior to age 59½, a 10% federal income tax penalty may apply (unless an exception applies).1

 

The march of time affords us ever-changing perspectives on life, and that is never truer than during retirement.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

Citations.

1 - forbes.com/sites/forbesfinancecouncil/2019/05/09/understanding-financial-risk-why-you-shouldnt-just-focus-on-the-probability-of-success [5/7/19]  



Monthly Economic Update for August, 2019

Presented by Beacon Financial Group


THE MONTH IN BRIEF

The stock market had a tumultuous August, reacting to the sudden devaluation of the Chinese yuan and the escalation of the trade dispute between the U.S. and China. Ultimately, investors seemed more interested in risk aversion: the S&P 500 lost 1.81% for the month. Demand for bonds helped to send Treasury yields lower; prices of precious metals climbed. Away from the markets, monthly personal spending and retail sales gains were strong. 1


DOMESTIC ECONOMIC HEALTH

Tariffs and trade issues remained front and center in the Wall Street conversation. On August 1, the White House announced a 10% import tax on an additional $300 billion of Chinese goods coming to U.S. shores. (Most of these products are so-called “final” consumer goods, like clothing and shoes.) In a nod to importers and retailers, the White House stated on August 13 that this 10% tariff would be delayed until December 15 for certain products: toys, consumer electronics, and other items that are big sellers during the holiday shopping season. Effective December 15, tariffs will impact nearly all Chinese imports to the U.S. 2

China soon retaliated, and the U.S. quickly responded. On August 25, China unveiled a plan to place tariffs on an additional $75 billion of U.S. goods. As part of the plan, import taxes on American-made cars and trucks would jump by 30%. Just hours later, the White House announced that the tariffs planned for September 1 and December 15 would rise by 5% to 15%, respectively, and that the 25% tariff currently in place on $250 billion of Chinese imports would rise to 30% on October 1. 2

A few summer statistics from Main Street seemed to contradict anxieties that the economy might be slowing down. Consumer spending advanced 0.6% in July, and that complemented July’s 0.7% gain in overall retail sales. Core retail sales (which exclude auto and gas purchases) were up 1.0% in the seventh month of the year. 3,4

A key measure of consumer confidence seemed strong: the Conference Board’s monthly index was at 135.1 in August, beating the 129.5 consensus forecast of a Reuters poll of economists. The CB’s present situation sub-index (surveying consumers’ view of the economy right now) hit 177.2, the best reading since November 2000. 3,5

All this said, other indicators hinted that manufacturing activity might have hit a soft patch. The Institute for Supply Management’s Purchasing Managers Index for the factory sector declined to half a point to 51.2 in July, and the federal government reported July retreats of 0.2% for industrial output, 0.4% for factory production, and 0.4% for core durable goods orders, which do not include the volatile transportation category (total durable goods orders, however, were up 2.1%). ISM’s monthly PMI for the service sector also lost ground, slipping 1.4 points in July to 53.7. 4

The labor market added 164,000 net new jobs during July, according to the Department of Labor. (The revised June number: 193,000.) Unemployment remained at 3.7%. The U-6 rate, which counts both the unemployed and underemployed, fell a respective 0.2% to 7.0%. 4

The Bureau of Economic Analysis delivered its third (“final”) estimate of second-quarter economic growth in late August: 2.0%. That number beat the 1.9% consensus forecast of economists polled by MarketWatch. 3

Federal Reserve Chairman Jerome Powell’s spoke on August 23 at the Kansas City Fed’s annual Jackson Hole banking conference. Powell said the Fed was “carefully watching developments” and would “act as appropriate” if U.S. economic conditions weaken. The next Fed policy meeting is less than two weeks away. Wall Street wonders if Fed policymakers might be inclined to make a rate cut; comments from multiple Fed officials at Jackson Hole did not point to a consensus on that matter. 6

 

GLOBAL ECONOMIC HEALTH

On August 5, China shocked financial markets worldwide by devaluing its main currency, the yuan, to a level unseen since the 2008 credit crisis. The rationale for this move was clear: by cheapening the yuan, China could make its exports more affordable for American buyers, effectively countering tariffs. Reaction on Wall Street was swift: U.S. stocks had their worst day of the year. The Department of the Treasury immediately called China a “currency manipulator.” With China’s economy growing at its slowest pace in 30 years, this could invite greater inflation. 7

In another surprise, Boris Johnson, the United Kingdom’s Prime Minister, announced that Queen Elizabeth had agreed to a sudden, outside-the-box political idea. On August 28, Johnson said that he had asked the Queen to suspend Parliament for a month beginning in mid-September, with U.K. lawmakers reconvening on October 14. That would give Parliament two weeks to consider and approve a Brexit strategy. A no-deal Brexit – the kind Johnson favors – may have a better chance of passage under such a tight timeline. 8

Also notable: the decline in government bond yields in key countries. Demand for bonds has sent prices of government-issued notes higher, and as a result, their interest rates have declined. Last month, roughly a quarter of the global bond market was invested in government notes bearing negative yields. 9

 

WORLD MARKETS

Many foreign indices took August losses, but there were some exceptions. In Russia, the Moex advanced 0.20%, and in Canada, the TSX Composite gained 0.22%. Mexico’s Bolsa registered a major August gain, rising 4.31%. 10

The emerging markets were hard hit last month. In fact, MSCI’s Emerging Markets index took a 5.08% fall. MSCI’s World index lost 2.24%. Hong Kong was beset by unrest, and its Hang Seng benchmark dove 8.60% for the month. China’s Shanghai Composite fell 2.24%; South Korea’s Kospi, 3.48%; the Singapore STI, 7.28%. Even Japan’s Nikkei 225 slipped 4.63%. European benchmarks were also mostly in the red: Spain’s IBEX 35 was 1.93%; Germany’s DAX, 1.71%; the FTSE Eurofirst 300, 1.55%. The United Kingdom’s FTSE 100 tumbled 5.75% last month. France’s CAC 40 lost just 0.56%. Two losses to note in South America: Brazil’s Bovespa declined 0.67%, and Argentina’s Merval slid 41.49%. 10,11

 

COMMODITIES MARKETS

At the closing bell on the month’s last trading day (August 30), an ounce of gold was worth $1,529.20 on the New York Mercantile Exchange; an ounce of silver, $18.48. Gold gained 7.76% in August, and silver, 12.92%. Another key precious metal, platinum, advanced 6.86%. One of the world’s key semi-precious metals, copper, fell 4.43% last month. 12

West Texas Intermediate crude oil ended August at $55.16 per barrel on the NYMEX, down 4.72% on the month. The value of unleaded gasoline fell 19.68%. Heating oil lost 6.42%, but natural gas increased 1.83%. Turning to crops, losses were prevalent: soybeans lost 0.61%; coffee, 5.23%; cotton, 6.86%; wheat, 7.50%; cocoa, 7.53%; sugar, 8.19%; corn, 10.81%. The U.S. Dollar Index rose 0.41% for the month to 98.92. 12,13

 

REAL ESTATE

Mortgage rates went lower in August, influenced by declining bond yields. In Freddie Mac’s August 29 Primary Mortgage Market Survey, the interest rate for the average 30-year, fixed-rate home loan was 3.58%. A 15-year, fixed-rate home loan carried an average interest rate of 3.06%. Back on August 1, they were respectively at 3.75% and 3.20%. 14

30-year and 15-year, fixed-rate mortgages are conventional home loans generally featuring a limit of $484,350 ($726,525 in high-cost areas) that meet the lending requirements of Fannie Mae and Freddie Mac, but they are not mortgages guaranteed or insured by any government agency. Private mortgage insurance, or PMI, is required for any conventional loan with less than a 20% down payment.

As for home buying, the National Association of Realtors said that existing home sales improved by 2.5% in July, a nice change from the 1.3% (revised) retreat of June. According to the Census Bureau, new home sales fell 12.8% during July, as opposed to a 20.9% climb a month earlier. 4

The latest 20-city S&P/Case-Shiller Home Price Index (June) measured 2.1% year-over-year home price appreciation, down from 2.4% in the prior edition. Housing starts fell 4.0% in July, but the Census Bureau did report an 8.4% increase for building permits. 4


TIP OF THE MONTH

Some insurers are now offering usage-based auto insurance. If you happen to drive less than 10,000 to 15,000 miles a year, you may be eligible for a discount on your policy.


LOOKING BACK, LOOKING FORWARD

August was notable for its volatility. The S&P 500 gained or lost 1% during nine of the first 17 trading days of the month. (Back in 2017, there were eight such trading sessions all year.) 15

All three of the major U.S. equity indices lost ground last month. The S&P ended August at 2,926.46; the Dow Jones Industrial Average, at 26,403.28; the Nasdaq Composite, at 7,962.88. 16-18

Aug 2019 Recap.png

With the third quarter about to give way to the fourth, investors are mulling a few questions. Can the U.S-China tariff fight be resolved this year or next? Is the economy actually showing signs of decelerating? Will Treasury yields stabilize? What will the Federal Reserve do? The answers to some of these questions may take months to surface. This month, Wall Street may see more of the choppiness that characterized August. The market is still a few weeks away from the next earnings season, so fundamental economic indicators (hiring, consumer spending, consumer confidence, manufacturing and service sector growth, retail sales) may exert some influence on stocks. Investors worldwide are waiting to see what direction the Fed will take with interest rates when it meets on September 17-18.

QUOTE OF THE MONTH

“The whole point of being alive is to evolve into the complete person you were intended to be.”

OPRAH WINFREY


UPCOMING RELEASES

Here are the major scheduled news items and events for the rest of the month: the August ADP employment report and Challenger job-cut report (9/5), the Department of Labor’s latest monthly jobs report (9/6), the August wholesale inflation numbers (9/11), the August consumer inflation reading (9/12), August retail sales and the preliminary September University of Michigan Consumer Sentiment Index (9/13), the next Federal Reserve monetary policy announcement and subsequent press conference, plus numbers on August housing starts and building permits (9/18), August existing home sales (9/19), the Conference Board’s September Consumer Confidence Index (9/24), August new home sales (9/25), August pending home sales and the federal government’s third estimate of second-quarter economic expansion (9/26), and then August consumer spending and durable goods orders, plus the final September University of Michigan Consumer Sentiment Index (9/27).

Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

 
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

CITATIONS:

1 - us.spindices.com/indices/equity/sp-500 [8/30/19]

2 - piie.com/blogs/trade-investment-policy-watch/trump-trade-war-china-date-guide [8/30/19]

3 - marketwatch.com/tools/calendars/economic?mod=economy-politics [8/30/19]

4 - investing.com/economic-calendar [8/30/19]

5 - cnbc.com/2019/08/27/us-consumer-confidence-august-2019-index-dips.html [8/27/19]

6 - marketwatch.com/story/powell-says-fed-carefully-watching-developments-and-will-act-as-appropriate-2019-08-23-10103027 [8/23/19]

7 - tinyurl.com/yy9jnbgm [8/9/19]    

8 - tinyurl.com/y32artr3 [8/28/19]

9 - cnbc.com/2019/08/20/investing-in-the-strange-negative-yield-world-its-very-hard-to-wrap-your-arms-around.html [8/20/19]

10 - markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [8/30/19]

11 - msci.com/end-of-day-data-search [8/30/19]

12 - money.cnn.com/data/commodities/ [8/30/19]

13 - marketwatch.com/investing/index/dxy/historical [8/30/19]

14 - freddiemac.com/pmms/archive.html [8/29/19]

15 - cnbc.com/2019/08/23/week-ahead-stocks-could-be-rocky-on-trade-economy.html [8/23/19]

16 - money.cnn.com/data/markets/dow/ [8/30/19]

17 - money.cnn.com/data/markets/nasdaq/ [8/30/19]

 

18 - money.cnn.com/data/markets/sandp/ [8/30/19]

19 - markets.wsj.com/us [12/31/18]

20 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [8/30/19]

Weekly Economic Update for September 2, 2019

Presented by Beacon Financial Group

THE WEEK ON WALL STREET

Fears of an impasse in the U.S.-China trade dispute lessened last week. While additional U.S. tariffs on Chinese imports were scheduled to take effect on September 1, China’s government communicated that it would refrain from taking retaliatory measures for the moment.

U.S. stock benchmarks advanced during the week. The S&P 500 rose 2.79% across five trading days, and the Nasdaq Composite and Dow Jones Industrial Average respectively gained 2.72% and 3.02%. The MSCI EAFE international index added just 0.25%. 1,2

  

Positive News in the Trade Dispute

Thursday, a spokesman for China’s commerce ministry said that negotiations could resume this month, and that discussions need to focus on “removing the new tariffs to prevent escalation.” 

In addition, officials in Beijing indicated they would hold off on responding to the U.S. tariff hikes announced Friday by the White House. 3

  

Mixed Consumer Confidence Signals

The Conference Board’s monthly Consumer Confidence Index was at 135.1 in August. Analysts polled by Reuters had projected a reading of 129.5. Consumers’ view of the present economic situation was the best since November 2000.

On the other hand, the University of Michigan’s monthly Consumer Sentiment Index (based on a different collection of survey data) dropped 8.6 points during August to 89.8; that was its biggest monthly descent in nearly seven years. 4,5

 

WHAT’s NEXT

After a pause for the Labor Day holiday, U.S. financial markets have an abbreviated trading week. The August jobs report may influence Friday’s Wall Street session, and any news pertaining to U.S.-China trade talks could also influence the markets.

TIP OF THE WEEK

If you still receive paper bank statements, you should know that there could be a financial perk for going digital: some financial institutions may offer you lower fees in return for your choice to manage your money online.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Institute for Supply Management releases its August Purchasing Managers Index (PMI) for the factory sector, assessing U.S. manufacturing activity.

Thursday: ISM presents its August PMI for the service sector, and payroll giant ADP publishes its latest private-sector employment snapshot.

Friday: The Department of Labor offers its August employment report.

Source: Econoday / MarketWatch Calendar, August 30, 2019

The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. The release of data may be delayed without notice for a variety of reasons.

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Wednesday: Palo Alto Networks (PANW), Slack Technologies (WORK)

Thursday: Lululemon Athletica (LULU)

Source: Zacks, August 30, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

 

QUOTE OF THE WEEK

“Take rest; a field that has rested gives a bountiful crop.”

OVID

Weekly Recap.png

Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

CITATIONS:

1 - wsj.com/market-data [8/30/19]

2 - quotes.wsj.com/index/XX/990300/historical-prices [8/30/19]

3 - marketwatch.com/story/dow-futures-up-over-250-points-as-china-tamps-down-fears-of-further-trade-war-escalation-2019-08-29 [8/29/19]

4 - cnbc.com/2019/08/27/us-consumer-confidence-august-2019-index-dips.html [8/27/19]

5 - sca.isr.umich.edu/ [8/30/19]

 

CHART CITATIONS:

wsj.com/market-data [8/30/19]

quotes.wsj.com/index/SPX/historical-prices [8/30/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [8/30/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [8/30/19]

 

Weekly Economic Update 8/26/2019

Presented by Beacon Financial Group

THE WEEK ON WALL STREET

Traders assumed that the week’s biggest news event would be Federal Reserve Chairman Jerome Powell’s speech at the annual Jackson Hole banking conference. Instead, China seized the headlines by announcing new tariffs on U.S. goods.

Domestic stocks ended up lower for the week. The Nasdaq Composite fell 1.83%; the S&P 500, 1.44%; the Dow Jones Industrial Average, 0.99%. International stocks posted a weekly gain: the MSCI EAFE benchmark rose 0.96%. 1,2

  

Beijing Plans New Tariffs

Friday morning, China’s finance ministry stated it would levy import taxes of 5-10% on an additional $75 billion of American imports. One set of tariffs is slated to start September 1, targeting U.S. crops, meats, and seafood. A second set, effective December 15, will put tariffs on U.S.-made cars and car parts. In total, these taxes are scheduled for more than 5,000 American products.

Friday evening, the White House announced two rounds of 5% increases on existing U.S. tariffs on Chinese goods, to be successively implemented on September 1 and October 1. 3,4 

 

Powell Reflects at Jackson Hole

Friday, Jerome Powell delivered an address on monetary policy at the Kansas City Fed’s annual Jackson Hole symposium. He noted that the global economy currently presented a “complex, turbulent picture,” and added that the Fed was “carefully watching developments” and would “act as appropriate.”

Investors wonder if, at its September meeting, the central bank will consider another rate cut. Comments from other Fed officials at Jackson Hole did not indicate a consensus on that matter. 5

  

Leading Indicators Rise

The Conference Board, the business research group known for its monthly Consumer Confidence Index, also publishes a monthly Leading Economic Indicator (LEI) Index. The Conference Board’s LEI provides a forward-looking analysis of the health of the business cycle, looking at ten factors ranging from consumer expectations to stock prices to construction activity.

In July, the LEI rose 0.5%, following 0.1% descents in May and June. This sudden increase offers optimism at a time when investors are wondering about the momentum of the economy. 6

 

FINAL THOUGHT

Bond prices have risen around the world, leading to lower bond yields. In some instances, yields have turned negative. While the yield on the 10-year Treasury has also declined, it is still above 1.5%, notably exceeding the yields of similar-duration bonds in France, Germany, Spain, and the United Kingdom. 7


TIP OF THE WEEK

Remember that you must itemize to claim a federal tax deduction for charitable contributions. It is to your advantage to itemize when your total individual deductions exceed the standard deduction amount for your federal tax filing status.


THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Conference Board’s July Consumer Confidence Index.

Thursday: The Bureau of Economic Analysis presents the second estimate of second-quarter economic growth, and the National Association of Realtors publishes new data on pending home sales.

Friday: July consumer spending data from the Department of Commerce, and July’s final University of Michigan Consumer Sentiment Index (a gauge of consumer confidence levels).

Source: Econoday / MarketWatch Calendar, August 23, 2019

The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. The release of data may be delayed without notice for a variety of reasons.

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Autodesk (ADSK)

Thursday: Abercrombie & Fitch (ABF), Best Buy (BBS), Lululemon Athletica (LULU).

Source: Zacks, August 23, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.


QUOTE OF THE WEEK

“Whether it’s the best of times or the worst of times, it’s the only time we’ve got.”

ART BUCHWALD


Weekly Recap.png



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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

CITATIONS:

1 - wsj.com/market-data [8/23/19]

2 - quotes.wsj.com/index/XX/990300/historical-prices [8/23/19]

3 - cnn.com/2019/08/23/business/china-tariff-products-soybeans-oil/index.html [8/23/19]

4 - marketwatch.com/story/trump-says-us-tariffs-will-increase-on-chinese-goods-2019-08-23 [8/23/19]

5 - marketwatch.com/story/powell-says-fed-carefully-watching-developments-and-will-act-as-appropriate-2019-08-23-10103027 [8/23/19]

6 - conference-board.org/data/bcicountry.cfm?cid=1 [8/22/19]

7 - cnbc.com/2019/08/20/investing-in-the-strange-negative-yield-world-its-very-hard-to-wrap-your-arms-around.html [8/20/19]

 

CHART CITATIONS:

wsj.com/market-data [8/23/19]

quotes.wsj.com/index/SPX/historical-prices [8/23/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [8/23/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [8/23/19]


 

Why Having a Financial Professional Matters

Presented by Beacon Financial Group

A good professional provides important guidance and insight through the years.

What kind of role can a financial professional play for an investor? The answer: a very important one. While the value of such a relationship is hard to quantify, the intangible benefits may be significant and long-lasting.

 

There are certain investors who may turn to a financial professional with one goal in mind: the “alpha” objective of beating the market, quarter after quarter.

 

At some point, these investors may realize that their financial professional has no control over what happens in the market. They may come to understand the real value of the relationship, which is about strategy, coaching, and understanding.

  

A good financial professional can help an investor interpret today’s financial climate, determine objectives, and assess progress toward those goals. Alone, an investor may be challenged to do any of this effectively. Moreover, an uncoached investor may make self-defeating decisions. Today’s steady stream of instant information can prompt emotional behavior and blunders.

  

No investor is infallible. Investors can feel that way during a great market year, when every decision seems to work out well. Overconfidence can set in, and the reality that the market has occasional bad years can be forgotten.

   

This is when irrational exuberance can creep in. A sudden Wall Street shock may lead an investor to sell low today, buy high tomorrow, and attempt to time the market.

 

Market timing may be a factor in the following divergence: according to investment research firm DALBAR, U.S. stocks gained 10% a year on average from 1988-2018, yet the average equity investor’s portfolio returned just 4.1% annually in that period. 1

                 

A good financial professional helps an investor commit to staying on track. Through subtle or overt coaching, the investor may learn to take short-term ups and downs in stride and focus on the long term. A strategy may be put in place, based on a defined investment policy and target asset allocations with an eye on major financial goals. The client’s best interest is paramount.

 

As the investor-professional relationship unfolds, the investor may begin to notice the intangible ways the professional provides value. Insight and knowledge inform investment selection and portfolio construction. The professional helps explain the subtleties of investment classes and how potential risk often relates to potential reward.

  

Perhaps most importantly, the professional can help the client get past the “noise” and “buzz” of the financial markets to see what is really important to his or her financial life.

 

The investor may gain a new level of understanding, a context for all the investing and saving. The effort to build wealth and retire well is not merely focused on “success,” but also on significance.

 

This is the value a financial professional brings to the table. You cannot quantify it in dollar terms, but you can certainly appreciate it over time.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

DALBAR’S 2018 Quantitative Analysis of Investor Behavior (QAIB) study examines real investor returns from equity, fixed income and money market mutual funds from January 1984 through December 2018. The study was originally conducted by DALBAR, Inc. in 1994 and was the first to investigate how mutual fund investors’ behavior affects the returns they actually earn. Past performance is no guarantee of future results.

 

 

Citations.

1 - cnbc.com/2019/07/31/youre-making-big-financial-mistakes-and-its-your-brains-fault.html [7/31/2019]

 

Understanding Long-Term Care

Presented by Beacon Financial Group

The important question: Are you prepared?

Addressing the potential threat of long-term care expenses may be one of the biggest financial challenges for individuals who are developing a retirement strategy.

 

The U.S. Department of Health and Human Services estimates that 69% of people over age 65 can expect to need extended care services at some point in their lives. So, understanding the various types of long-term care services – and what those services may cost – is critical as you consider your retirement approach. 1

 

What Is Long-Term Care? Long-term care is not a single activity. It refers to a variety of medical and non-medical services needed by those who have a chronic illness or disability that is most commonly associated with aging.

 

Long-term care can include everything from assistance with activities of daily living – help dressing, bathing, using the bathroom, or even driving to the store – to more intensive therapeutic and medical care requiring the services of skilled medical personnel.

 

Long-term care may be provided at home, at a community center, in an assisted living facility, or in a skilled nursing home. And long-term care is not exclusively for the elderly; it is possible to need long-term care at any age.

 

How Much Does Long-Term Care Cost? Long-term care costs vary state by state and region by region. The national average for care in a skilled care facility (semi-private in a nursing home) is $85,775 a year. The national average for care in an assisted living center is $45,000 a year. Home health aides cost a median $18,200 per year, but that rate may increase when a licensed nurse is required. 1

 

Individuals who would rather not burden their family and friends have two main options for covering the cost of long-term care: they can choose to self-insure or they can purchase long-term care insurance.

 

Many self-insure by default – simply because they haven’t made other arrangements. Those who self-insure may depend on personal savings and investments to fund any long-term care needs. The other approach is to consider purchasing long-term care insurance, which can cover all levels of care, from skilled care to custodial care to in-home assistance.

 

When it comes to addressing your long-term care needs, many look to select a strategy that may help them protect assets, preserve dignity, and maintain independence. If those concepts are important to you, consider your approach for long-term care.

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

 

Citations.

1 - fool.com/retirement/2018/09/02/5-long-term-care-stats-that-will-blow-you-away.aspx [9/2/18] 



Weekly Economic Update August 12, 2019

Presented by Beacon Financial Group


In this week’s recap: China jolts the markets by devaluing the yuan, aggregate second-quarter earnings top analyst projections, and stocks retreat for the week.


THE WEEK ON WALL STREET

Stocks spent much of last week rebounding from a Monday drop that reflected nervousness about the U.S.-China trade fight. By Thursday’s closing bell, the S&P 500 had regained all its Monday losses, but it descended again on Friday.

The three big U.S. equity benchmarks finished the week lower: the S&P declined 0.46%; the Dow Jones Industrial Average, 0.75%; the Nasdaq Composite, 0.56%. A broad index of foreign shares, the MSCI EAFE, lost 0.95%. 1,2

 

China Devalues Its Currency

Last Monday, stocks fell 3% in reaction to the overnight weakening of the Chinese yuan. A weaker yuan makes Chinese exports cheaper for buyers who pay for them in dollars.

Critics quickly accused China of manipulating its currency to strike back at the U.S. The federal government plans to impose tariffs on nearly all Chinese products next month, likely making those goods more expensive to American consumers; a weaker yuan could counter the effect of those import taxes.” 3,4 

 

Earnings Season Update

Ninety percent of S&P 500 firms have now reported second-quarter results. Their collective sales and profits have surprised to the upside.

Stock market analytics firm FactSet says that overall earnings have beaten estimates by 5.7%. Seventy-five percent of firms have reported actual earnings per share surpassing estimates, which is better than the five-year average. 5

 

FINAL THOUGHT

We are seeing a significant bond rally this summer, even with interest rates at very low levels. (When bond prices rise, bond yields tend to fall.) At the moment, about a quarter of the global bond market is invested in government notes with negative interest rates. The 10-year Treasury stands in contrast. Friday, it was yielding 1.74%. 6,7


TIP OF THE WEEK

If you think you need to save more for retirement, think about saving at a rate that is slightly above your “comfort zone.” This calls for some financial discipline and dedication, but your future self may thank you years from now.



THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The July Consumer Price Index appears, reporting the country’s monthly and annual rate of inflation.

Thursday: July retail sales numbers from the Census Bureau.

Friday: The initial August University of Michigan Consumer Sentiment Index presents the latest snapshot of household confidence in the economy.

Source: Econoday / MarketWatch Calendar, August 9, 2019

The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. The release of data may be delayed without notice for a variety of reasons.

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Sysco (SYY)

Wednesday: Cisco (CSCO)

Thursday: Alibaba (BABA), Applied Materials (AMAT), Nvidia (NVDA), Walmart (WMT)

Friday: Deere & Co. (DE)

Source: Zacks.com, August 9, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.


QUOTE OF THE WEEK

Dignity does not come in possessing honors, but in deserving them.”

ARISTOTLE


Weekly Recap.png


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Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

CITATIONS:

1 - wsj.com/market-data [8/9/19]

2 - quotes.wsj.com/index/XX/990300/historical-prices [8/9/19]

3 - bloomberg.com/news/articles/2019-08-04/asia-stocks-set-to-drop-with-trade-back-in-focus-markets-wrap [8/5/19]

4 - bloomberg.com/news/articles/2019-08-05/china-hits-back-at-trump-with-weaker-yuan-halt-on-crop-imports [8/5/19]

5 - insight.factset.com/earnings-season-update-august-9-2019 [8/9/19]

6 - cnbc.com/2019/08/07/how-bonds-with-negative-yields-work-and-why-this-growing-phenomenon-is-so-bad-for-the-economy.html [8/7/19]

7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [8/9/19]

 

CHART CITATIONS:

wsj.com/market-data [8/9/19]

quotes.wsj.com/index/SPX/historical-prices [8/9/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [8/9/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [8/9/19]

 

Your Diversified Portfolio vs. the S&P 500

Presented by Beacon Financial Group

How global returns and proper diversification are affecting overall returns.

“Why is my portfolio underperforming the market?” This question may be on your mind. It is a question that investors sometimes ask after stocks shatter records or return exceptionally well in a quarter.

 

The short answer is that even when Wall Street rallies, international markets and intermediate and long-term bonds may underperform and exert a drag on overall portfolio performance. A little elaboration will help explain things further.

    

A diversified portfolio necessarily includes a range of asset classes. This will always be the case, and while some investors may wish for an all-equities portfolio when stocks are surging, a 100% stock allocation is obviously fraught with risk.

   

Because the stock market has advanced so much over the past decade, some investors now have larger positions in equities than they originally planned, and that may leave them exposed to an uncomfortable degree of market risk. A portfolio held evenly in equities and fixed income ten years ago may now have a clear majority of its assets in equities, with the performance of stock markets influencing its return to a greater degree. 1

 

Yes, stock markets – not just here, but abroad. U.S. investors have more global exposure than they once did. International holdings represented about 5% of the typical investor’s portfolio back in the 1990s. Today, they account for around 15%. If overseas markets struggle, the impact on portfolio performance may be noticeable. 2  

  

In addition, a sudden change in sector performance can have an impact. At one point in 2018, tech stocks accounted for 25% of the weight of the S&P 500. While the recent restructuring of S&P sectors lowered that by a few percentage points, portfolios can still be greatly affected when tech shares slide, as investors witnessed in late 2018. 3

   

The state of the fixed-income market can also potentially impact portfolio performance. Bond prices commonly fall when interest rates rise, which presents a short-term concern for an investor. If a bond is held to maturity, though, the investor will receive the promised principal and interest (assuming no default on the part of the issuer). Moreover, a rising interest rate environment may help the fixed-income segment of the portfolio’s long-term performance. New bonds issued in a rising interest rate environment have the potential to generate more yield than the older bonds of similar duration that they replace. 4

  

This year, U.S. stocks have done well. A portfolio 100% invested in the U.S. stock market in 2019 could have expected a year-to-date return approximating that of the S&P 500. But how many strategies invest entirely in US Stocks, without exposure to international and emerging markets? 5

  

Just as an illustration, assume that there actually is a hypothetical investor this year who is 100% invested in equities, as follows: 50% domestic, 35% developed foreign markets, and 15% emerging markets.

 

In this illustration, the S&P 500 will serve as the model for the U.S. market, MSCI’s EAFE index will stand in for developed foreign markets, and MSCI’s Emerging Markets index will represent the emerging markets. Through the end of July, the S&P was +18.89% year-to-date, the EAFE +10.31% YTD, and the Emerging Markets just +7.38% YTD. As foreign and domestic stocks have equal weight in this hypothetical portfolio, it is easy to see that its overall YTD gain would have been less than 18.9% as of the July 31 closing bell. 6,7

  

Your portfolio is not the market – and vice versa. Your investments may return less than the S&P 500 (or another benchmark) in a particular year due to various factors, including the behavior of the investment markets. Those markets are ever-changing. In some years, you may get a double-digit return. In other years, your return may be much smaller.

 

When your portfolio is diversified across asset classes, the highs may not be so high – but the lows may not be so low, either. If things turn volatile, diversification may help insulate you from some of the ups and downs that come with investing.

     

    

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service and should not be relied upon as such. All indices are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.  

Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets. Because of their narrow focus, sector investing will be subject to greater volatility than investing more broadly across many sectors and companies.

 There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.

 The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

 

Annotation:

        

Citations.

1 - money.com/money/5481891/this-is-how-much-money-you-should-have-in-stocks-at-every-age/ [12/18/18]

2 - forbes.com/sites/simonmoore/2018/08/05/how-most-investors-get-their-international-stock-exposure-wrong/ [8/5/18]

3 - cnbc.com/2018/04/20/tech-dominates-the-sp-500-but-thats-not-always-a-bad-omen.html [4/20/18]

4 - fidelity.com/viewpoints/investing-ideas/fed-rate-hike-worries [4/23/19]

5 - investopedia.com/ask/answers/12/beating-the-market.asp [6/25/19]

6 - us.spindices.com/indices/equity/sp-500  [7/31/19]

7 - msci.com/end-of-day-data-search [7/31/19]

 

Monthly Economic Update July, 2019

Presented by Beacon Financial Group

In this month’s recap: Stocks, gold, and oil all surge, a door opens for U.S.-China trade talks to resume, and the Federal Reserve suddenly sounds dovish.

THE MONTH IN BRIEF

You could say June was a month of highs. The S&P 500 hit another record peak, oil prices reached year-to-date highs, and gold became more valuable than it had been in six years. (There was also a notable low during the month: the yield of the 10-year Treasury fell below 2%.) Also, a door opened to further trade talks with China, and the latest monetary policy statement from the Federal Reserve hinted at the possibility of easing. For most investors, there was much to appreciate. 1  

DOMESTIC ECONOMIC HEALTH

On June 29, President Trump told reporters, gathered at the latest Group of 20 summit, that he and Chinese President Xi Jinping were planning a resumption of formal trade negotiations between their respective nations. Additionally, President Trump said that the U.S. would refrain from imposing tariffs on an additional $300 billion of Chinese goods for the “time being.” A six-week stalemate in trade talks had weighed on U.S. and foreign stock, bond, and commodities markets in May and June. 2

The Federal Reserve left the benchmark interest rate alone at its June meeting, but its newest policy statement and dot-plot forecast drew considerable attention. Among seventeen Fed officials, eight felt rate cuts would occur by the end of the year, eight saw no rate moves for the rest of the year, and just one saw a 2019 hike. The policy statement also removed reference to the Fed being “patient” about its stance on interest rates, and it mentioned economic and political “uncertainties” that may affect its near-term outlook. Stocks climbed after the announcement, and futures traders saw increased chances of a rate adjustment in either the third or fourth quarter. 3

Fed Chairman Jerome Powell also moved the market on two other occasions during June. On June 4, stocks had their best day since January after he noted that the Fed was keeping a close eye on trade and tariff issues and would “act as appropriate to sustain the expansion” of the economy. Stocks had their poorest day of the month on June 25 after Powell commented that there was no need to “overreact” to a “short-term swing in sentiment” or incoming data. 4,5

Some of the latest data seemed to hint at economic deceleration. The much-watched Institute for Supply Management Purchasing Managers Index for the factory sector fell to a 19-month low of 52.1 in May. The latest Consumer Price Index showed less inflationary pressure; it had advanced 1.8% in the 12 months ending in May, falling short of the Fed’s 2% target. The annualized pace of wholesale inflation dropped from 2.2% in April to 1.8% in May. Perhaps, most importantly, the economy added only 90,000 net new jobs in May, down from 205,000 a month before. (The main unemployment rate stayed at 3.6%; the U-6 rate, a broader measure which includes the underemployed and those who have dropped out of the job market, descended 0.2% to 7.1%.) 6,7

Additionally, consumer confidence slipped. The Conference Board’s monthly index went from 131.3 in May to 121.5 in June (admittedly, the index had climbed higher for three consecutive months). The University of Michigan’s Consumer Sentiment Index treaded water, ending June 0.3 points above its previous reading. 8,9

There were also encouraging signs, however. Retail sales rose 0.5% in May, according to the Census Bureau, and the Department of Commerce recorded a healthy 0.4% May advance for personal spending. The ISM’s nonmanufacturing PMI rose 1.4 points to 56.9 in May. 7,9

Early in the month, it seemed that trade negotiations between China and the U.S. were stalled. At the start of the month, President Trump proposed assessing tariffs on $300 billion more of Chinese imports (and he also talked of imposing a 10% tariff on all imported goods from Mexico, though this did not happen in June). Some optimism returned for investors when a meeting between President Trump and Chinese President Xi Jinping was scheduled for the month-ending Group of 20 summit in Japan. 8

 

GLOBAL ECONOMIC HEALTH

Away from America, concerns about an economic slowdown grew. The central banks of Australia, Chile, India, and Russia all cut interest rates in June, in an effort to stimulate the economies of their respective nations. This was the widest wave of easing seen since the first half of 2016. Word came that IHS Markit’s Global Purchasing Managers Index, a respected barometer of worldwide factory activity, fell to 49.8 in May – an indication that global manufacturing was contracting. It was the weakest reading for the index in seven years. Markit factory PMIs for China, South Korea, the United Kingdom, and Germany were all soft enough to indicate less activity in May. 6,10

Markets in Europe benefited from comments by European Central Bank President Mario Draghi, who said that he was prepared to loosen monetary reins in order to stimulate lethargic economies of member nations within the European Union. Economists polled by Bloomberg believe that the ECB will cut its deposit rate to -0.5% during the third quarter. 11

This month, the United Kingdom will elect a new parliamentary leader. Former U.K. foreign secretary Boris Johnson and current U.K. foreign secretary Jeremy Hunt will face off, with the winner announced on July 23. Johnson is currently seen as the favorite, and he has pledged that the U.K. will make its Brexit from the European Union by Halloween, even without a deal. Analysts think his vow could lead to a fall impasse in Parliament, if the E.U. fails to agree to whatever new deal the U.K. proposes. 12

 

WORLD MARKETS

Several benchmarks recorded June gains of 3% or better. Argentina’s often-volatile Merval jumped 18.72%, the MSCI World index surged 6.46%, Russia’s Micex rose 5.98%, and the MSCI Emerging Markets index gained 5.70%. Next in line, Singapore’s STI rose 4.94%. Brazil’s Bovespa added 4.75%; Taiwan’s TWSE, 4.34%; France’s CAC 40, 4.26%; Hong Kong’s Hang Seng, 4.21%. South Korea’s Kospi advanced 3.99%, while Germany’s DAX rose 3.09%. June also brought a 2.37% gain for China’s Shanghai Composite. 13,14

India's Nifty 50 and BSE Sensex were notable June outliers. The Nifty lost 1.17%, and the Sensex declined 0.89%. 13

 

COMMODITIES MARKETS

Oil and gold certainly grew more valuable in June. As tensions heightened between the U.S. and Iran, West Texas Intermediate crude oil surged 9.07%, finishing June at $58.20 a barrel on the New York Mercantile Exchange. Gold gained 8.20% in June, rising to a June 28 settlement of $1,412.50 per ounce on the NYMEX. 15

Four other important commodities gained at least 5% last month. Unleaded gasoline advanced 5.61%; platinum, 5.50%; heating oil, 5.32%;  silver, 5.02%. Silver finished June at a NYMEX price of $15.27. 15

Other June gains: wheat, 4.41%; sugar, 3.55%; copper, 2.69%; coffee, 2.52%; soybeans, 2.50%; cocoa, 1.83%. June retreats: corn, 1.11%; U.S. Dollar Index, 1.45%; cotton, 3.07%; natural gas, 6.01%. 15,16

 

REAL ESTATE

Mortgage rates fell in June. By the June 27 edition of the Freddie Mac Primary Mortgage Market Survey, the average interest on a 30-year, fixed-rate home loan was 3.73%, compared with 3.99% on May 31. Rates for 15-year, fixed loans also descended in this timeframe, from 3.46% to 3.16%. 17

30-year and 15-year fixed rate mortgages are conventional home loans generally featuring a limit of $484,350 ($726,525 in high-cost areas) that meet the lending requirements of Fannie Mae and Freddie Mac, but they are not mortgages guaranteed or insured by any government agency. Private mortgage insurance, or PMI, is required for any conventional loan with less than a 20% down payment.

The latest data on home buying came from May. Existing home sales rose 2.5%, according to the National Association of Realtors – a nice change from the 0.4% decline in April. New home sales, unfortunately, slid 7.8% during May, and that followed a 3.7% April retreat. 7

Home prices flattened in April, according to the S&P/Case-Shiller 20-City Composite Home Price Index. (Data for May arrives in July.) In year-over-year terms, prices were up 2.5%. 7

Lastly, housing starts weakened 0.9% in May, according to the Census Bureau, but the pace of building permits issued increased 0.3%. 7

TIP OF THE MONTH

If you can reduce some of your fixed, monthly expenses in retirement, you may end up withdrawing thousands of dollars less from your retirement savings per year than you would have otherwise.

LOOKING BACK, LOOKING FORWARD

On June 21, the S&P 500 reached a new all-time peak of 2,964.03 in intraday trading. That was a high note in a strong month for the index. 1

The S&P surged 6.89% in June. The Dow Jones Industrial Average added 7.19%; the Nasdaq Composite, 7.42%. As the closing bell rang on the last market day of the month (June 28), the S&P settled at 2,941.76; the Nasdaq, at 8,006.24; the Dow, at 26,599.96. 18,19,20

Prices of longer-term Treasuries rose in June, and correspondingly, their yields fell. On the first market day of the month (June 3), the yield on the 10-year note dipped under 2%; that had not happened since November 2016. 21

All this greatly improved the year-to-date performance for these benchmarks. At the June 28 close, the S&P 500 was at +17.35% on the year; the Dow, +14.03%; the Nasdaq, +20.66%. 18,19,20

This month, the current U.S. economic expansion became the longest on record. The economy grew 3.1% in the first quarter, by the assessment of the Bureau of Economic Analysis; the BEA’s initial estimate of Q2 economic growth is scheduled to appear July 26. The Federal Reserve’s next monetary policy meeting concludes on July 31. 5,9

QUOTE OF THE MONTH

Be yourself; everyone else is already taken.

OSCAR WILDE

UPCOMING RELEASES

Here is the July schedule of news releases pertaining to fundamental economic and housing indicators: the June ADP employment change report and the June Institute for Supply Management nonmanufacturing index (7/3), the latest monthly employment snapshot from the Department of Labor (7/5), the latest Consumer Price Index (7/11), June retail sales (7/16), June construction activity (7/17), July’s initial University of Michigan consumer sentiment index (7/19), June existing home sales (7/23), June new home sales (7/24), the first estimate of Q1 economic expansion from the federal government (7/26), June consumer spending, the July Consumer Confidence Index from the Conference Board, and June pending home sales (7/30), and last, but certainly not least, a new Federal Reserve monetary policy statement (7/31). (The final July University of Michigan Consumer Sentiment Index is slated for release on 8/2.)

Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

CITATIONS:

1 - cnbc.com/2019/06/21/it-was-a-monumental-week-for-markets-with-major-milestones-in-stocks-bonds-gold-and-oil.html [6/21/19]

2 - bloomberg.com/news/articles/2019-06-29/xi-trump-agree-to-restart-trade-talks-china-says [6/29/19]

3 - bloomberg.com/news/articles/2019-06-19/fed-scraps-patient-rate-approach-in-prelude-to-potential-cut [6/19/19]

4 - foxbusiness.com/markets/us-stocks-wall-street-june-4-2019 [6/4/19]  

5 - apnews.com/36e95b56e88e444bb67d997b47b046d6 [5/29/19]

6 - bloomberg.com/news/articles/2019-06-03/asia-factories-feel-trade-war-pain-led-by-south-korea-and-japan [6/3/19]

7 - investing.com/economic-calendar [6/28/19]

8 - thehill.com/policy/finance/450322-consumer-confidence-fell-in-june-amid-trump-tariff-threats-report [5/28/19]

9 - marketwatch.com/tools/calendars/economic [6/28/19]

10 - global-rates.com/interest-rates/central-banks/central-banks.aspx [6/25/19]

11 - bloomberg.com/news/articles/2019-06-27/ecb-seen-cutting-rates-in-september-as-draghi-reloads-stimulus [6/27/19]

12 - reuters.com/article/us-britain-eu-johnson/boris-johnson-says-he-is-serious-about-no-deal-brexit-threat-idUSKCN1TP2SR [6/24/19]

13 - markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [6/28/19]

14 - msci.com/end-of-day-data-search [6/28/19]

15 - money.cnn.com/data/commodities/ [6/28/19]

16 - marketwatch.com/investing/index/dxy/historical [6/28/19]

17 - freddiemac.com/pmms/archive.html [6/27/19]

18 - money.cnn.com/data/markets/sandp [6/29/19]

19 - money.cnn.com/data/markets/dow [6/29/19]

20 - money.cnn.com/data/markets/nasdaq [6/29/19]

21 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [6/28/19]

22 - markets.wsj.com/us [12/31/18]

Will You Avoid These Estate Planning Mistakes?

Presented by Beacon Financial Group

Too many wealthy households commit these common blunders

Many people plan their estates diligently, with input from legal, tax, and financial professionals. Others plan earnestly but make mistakes that can potentially affect both the transfer and destiny of family wealth. Here are some common and not-so-common errors to avoid.

 

Doing it all yourself. While you could write your own will or create a will, it can be risky to do so. Sometimes simplicity has a price. Look at the example of Aretha Franklin. The “Queen of Soul’s” estate, valued at $80 million, may be divided under a handwritten or “holographic” will. Her wills were discovered among her personal effects. Provided that the will can be authenticated, it will be probated under Michigan law, but such un-witnessed documents are not necessarily legally binding. 1

 

Failing to update your will or trust after a life event. Relatively few estate plans are reviewed over time. Any major life event should prompt you to review your will, trust, or other estate planning documents. So should a major life event that affects one of your beneficiaries. 

   

Appointing a co-trustee. Trust administration is not for everyone. Some people lack the interest, the time, or the understanding it requires, and others balk at the responsibility and potential liability involved. A co-trustee also introduces the potential for conflict.

 

Being too vague with your heirs about your estate plan. While you may not want to explicitly reveal who will get what prior to your passing, your heirs should understand the purpose and intentions at the heart of your estate planning. If you want to distribute more of your wealth to one child than another, write a letter to be presented after your death that explains your reasoning. Make a list of which heirs will receive collectibles or heirlooms. If your family has some issues, this may go a long way toward reducing squabbles as well as the possibility of legal costs eating up some of this-or-that heir’s inheritance.

 

Leaving a trust unfunded (or underfunded). Through a simple, one-sentence title change, a married couple can fund a revocable trust with their primary residence. As an example, if a couple retitles their home from “Heather and Michael Smith, Joint Tenants with Rights of Survivorship” to “Heather and Michael Smith, Trustees of the Smith Revocable Trust dated (month)(day), (year).” They are free to retitle myriad other assets in the trust’s name. 1

  

Ignoring a caregiver with ulterior motives. Very few people consider this possibility when creating a will or trust, but it does happen. A caregiver harboring a hidden agenda may exploit a loved one to the point where they revise estate planning documents for the caregiver’s financial benefit.

    

The best estate plans are clear in their language, clear in their intentions, and updated as life events demand. They are overseen through the years with care and scrutiny, reflecting the magnitude of the transfer of significant wealth.  

         

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

Citations.

1 – detroitnews.com/story/news/local/oakland-county/2019/05/20/lawyer-says-3-handwritten-wills-found-aretha-franklin-home/3747674002/ [5/20/19]

Weekly Economic Update 7/29/2019

Presented by Beacon Financial Group

In this week’s recap: stocks rise, data shows economic growth slowing from the first quarter, and the stage is set for further U.S.-China trade discussions.

The Week on Wall Street

Last week, investors assessed earnings and the initial estimate of second-quarter economic growth, while awaiting the Federal Reserve’s next announcement about interest rates.

Stocks rose for the week; particularly, tech shares. The S&P 500 gained 1.65%; the Nasdaq Composite, 2.26%. The Dow Jones Industrial Average lagged, adding just 0.14%. MSCI’s EAFE index, a gauge of equity performance in developed foreign markets, ticked up 0.01%., 1,2

  

Economy Grew Moderately in Q2

Analysts surveyed by Dow Jones Newswires had forecast 2.0% Gross Domestic Product for the second quarter. The actual estimate, announced Friday by the Bureau of Economic Analysis, was slightly better at 2.1%. 3

While this is the poorest quarterly GDP number since the opening quarter of 2017, the decline in GDP largely reflects a decrease in business investment. Consumer spending improved 4.3% in Q2, and government spending rose 5.0%, which was the biggest quarterly gain in a decade. 3

 

China Trade Talks to Restart

U.S. trade delegates are scheduled to resume face-to-face negotiations with their Chinese counterparts, starting Tuesday in Shanghai.

This renewed effort to forge a bilateral trade pact could go on for some time. Secretary of the Treasury Steven Mnuchin, who is part of the U.S. delegation, told reporters last week that it would likely take “a few more meetings” before any kind of accord can be considered. 4 

  

What’s Next

Wednesday at about 2:00pm EST, the Federal Reserve is scheduled to conclude its July meeting. Wall Street is eager to see what the Fed will do with interest rates. The question is whether traders have priced in expectations of a cut and how they may react if no cut comes.

TIP OF THE WEEK

When it comes to insuring your residence, remember that the right amount of coverage is based on what it costs you to replace your home, not just to reconstruct it. Some homeowners under-insure their homes and end up paying some rebuilding or repair costs out of pocket after a calamity.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The federal government’s June personal spending report and the Conference Board’s monthly index of consumer confidence.

Wednesday: The Federal Reserve presents its latest statement on interest rates and monetary policy, and payroll titan ADP offers its July private-sector employment snapshot.

Thursday: The latest report on American manufacturing from the Institute for Supply Management.

Friday: July jobs data from the Department of Labor and the University of Michigan’s final July Consumer Sentiment Index, measuring household confidence in the economy.

Source: Econoday / MarketWatch Calendar, July 26, 2019

The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. The release of data may be delayed without notice for a variety of reasons.

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: RingCentral (RNG)

Tuesday: Apple (APPL), Mastercard (MA), Merck (MRK), Pfizer (PFE), Procter & Gamble (PG)

Wednesday: General Electric (GE), Qualcomm (QCOM)

Thursday: Royal Dutch Shell (RDS.A), Verizon (VZ)

Friday: Berkshire Hathaway (BRK.B), Chevron (CVX), ExxonMobil (XOM), Toyota (TM)

Source: Zacks, July 26, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

QUOTE OF THE WEEK

“To succeed, planning alone is insufficient. One must improvise as well.”

ISAAC ASIMOV

Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

CITATIONS:

1 - wsj.com/market-data [7/26/19]

2 - quotes.wsj.com/index/XX/990300/historical-prices [7/26/19]

3 - cnbc.com/2019/07/26/us-gdp-second-quarter-2019.html [7/26/19]

4 - reuters.com/article/us-usa-trade-china/top-us-china-trade-negotiators-to-meet-in-shanghai-next-week-idUSKCN1UJ1JI [7/24/19]

Insurance When You're Newly Married

Presented by Beacon Financial Group

Assess the coverage for your new household.

Marriage changes everything, including insurance needs. Newly married couples should consider a comprehensive review of their current, individual insurance coverage to determine if any changes are in order as well as consider new insurance coverage appropriate to their new life stage.

 

Auto. The good news is that married drivers may be eligible for lower rates than single drivers. Since most couples come into their marriage with two separate auto policies, you should review your existing policies and contact your respective insurance companies to obtain competitive quotes on a new, combined policy.

 

Home. Newly married couples may start out as renters, but they often look to own a home or condo as a first step in building a life together. The purchase of homeowners insurance or condo insurance is required by the lender. While these policies have important differences, they do share the same purpose – to protect your home, your personal property, and your assets against any personal liability.

 

You should take special care of what is covered under the policy, the types of covered perils, and the limits on the amount of covered losses. Pay particular attention to whether the policy insures for replacement costs (preferable) or actual cash value.

 

Health. Like auto insurance, couples often bring together two separate, individual health insurance plans. Newly married couples should review their health insurance plans’ costs and benefits and determine whether placing one spouse under the other spouse’s plan makes sense.

 

Disability. Married couples typically combine their financial resources and live accordingly. This means that your mortgage or car loan may be tied to the combined earnings of you and your spouse. The loss of one income, even for a short period of time, may make it difficult to continue making payments designed for two incomes. Disability insurance replaces lost income, so that you can continue to meet your living expenses. 1

 

Life. Central to any marriage is a concern for each other’s future well-being. In the event of a spouse’s death, a lifestyle based on two incomes may mean that the debt and cash flow obligations can’t be met by the surviving spouse’s single income. Saddling the surviving spouse with a financial burden can be avoided through the purchase of life insurance in an amount that pays off debts and/or replaces the deceased spouse’s income. 2

 

Liability. Personal liability risks can have a significant impact on the wealth you are beginning to build for your future together. Consider purchasing umbrella insurance under your homeowners policy to protect against the financial risk of personal liability.

 

Extended Care. Extended care insurance may be a low priority given other financial demands, such as saving for retirement. Nevertheless, you may want to have a conversation with your parents about how long-term care insurance may protect their financial security in retirement.

 

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

Citations.

1 - chicagotribune.com/business/success/terrysavage/tca-disability-insurance-can-protect-you-from-unthinkable-20190410-story.html [4/10/19]

2 - chicagotribune.com/business/success/terrysavage/tca-disability-insurance-can-protect-you-from-unthinkable-20190410-story.html [4/10/19]

 

Weekly Economic Update 7/22/2019

Presented by Beacon Financial Group

In this week’s recap: stocks dip as earnings season begins; investors wait for the July Federal Reserve meeting, while considering retail sales data and comments from Fed officials.

THE WEEK ON WALL STREET

Stock benchmarks retreated during the first week of the second-quarter earnings season. As some big names shared quarterly results, investors seemed more interested in what might happen at the Federal Reserve’s upcoming policy meeting.

For the week, the S&P 500 declined 1.23%. The Dow Jones Industrial Average lost 0.65%, and the Nasdaq Composite, 1.18%. International stocks, measured by the week-over-week performance of the MSCI EAFE index, were down 0.79%. 1-2

 

Households Bought More Last Month

Retail sales were up 0.4% in June, according to the Department of Commerce. Consumer purchases account for more than two-thirds of America’s gross domestic product, and data like this may rebut some assertions that the economy is losing steam. 3

Traders still expect the Federal Reserve to make a rate cut at the end of this month, even with low unemployment, solid consumer spending, and stocks near record peaks. Ordinarily, the Fed lowers interest rates to try to stimulate business growth and investment when the economy lags. After ten years without a recession, its new challenge is to make appropriate moves to ward off such a slowdown. 3 

 

Will Wall Street’s Expectations Be Met?

Thursday, Federal Reserve Bank of New York President John Williams noted that Fed policymakers could proactively adjust interest rates and take “preventative measures” to ward off a potential slowdown. A New York Fed spokesperson later said that Williams’ comments were “academic” and did not concern “potential policy actions.” Still, Fed Vice President Richard Clarida made similar comments last week, expressing the view that Fed officials “don’t have to wait until things get bad to have a dramatic series of rate cuts.” 4

Two other Fed officials – Esther George and Eric Rosengren – have publicly stated that they are not in favor of a cut. 5

 

FINAL THOUGHT

About 25% of S&P 500 companies report earnings this week. In addition, the federal government will present its first snapshot of the economy’s second-quarter performance.

TIP OF THE WEEK
Beware of altering your investment mix in response to anxieties or short-term market fluctuations. Remember your time horizon and big-picture goals.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: June existing home sales figures appear from the National Association of Realtors.

Wednesday: The Census Bureau presents its June report on new home buying.

Friday: The Bureau of Economic Analysis releases its initial estimate of Q2 economic growth.

Source: Econoday / MarketWatch Calendar, July 19, 2019

The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. The release of data may be delayed without notice for a variety of reasons.

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Celanese (CE), Halliburton (HAL), TD Ameritrade (AMTD)

Tuesday: Coca-Cola (KO), Texas Instruments (TXN), Visa (V)

Wednesday: AT&T (T), Boeing (BA), Facebook (FB), PayPal (PYPL)

Thursday: Alphabet (GOOGL), Amazon (AMZN), Anheuser-Busch (BUD), Intel (INTC), Starbucks (SBUX)

Friday: AbbVie (ABBV), Colgate-Palmolive (CL), McDonalds (MCD).

Source: Zacks, July 19, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

QUOTE OF THE WEEK

“If we could read the secret history of our enemies, we should find in each man’s life sorrow and suffering enough to disarm all hostility.”

-Henry Wadsworth Longfellow

Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional

 

CITATIONS:

1 - wsj.com/market-data [7/19/19]

2 - quotes.wsj.com/index/XX/990300/historical-prices [7/19/19]

3 - cnbc.com/2019/07/17/the-feds-expected-rate-cut-not-supported-by-economic-data.htmll [7/17/19]

4 - thestreet.com/markets/stocks-climb-rate-cut-hopes-microsoft-earnings-15025435 [7/19/19]

5 - cnbc.com/2019/07/19/feds-rosengren-not-on-board-for-rate-cut-i-think-we-should-wait.html [7/19/19]

 

CHART CITATIONS:

wsj.com/market-data [7/19/19]

quotes.wsj.com/index/SPX/historical-prices [7/19/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [7/19/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [7/19/19]

 

Eight Mistakes That Can Upend Your Retirement

Presented by Beacon Financial Group

Avoid these situations, if you can.

Pursuing your retirement dreams is challenging enough without making some common, and very avoidable, mistakes. Here are eight big mistakes to steer clear of, if possible.

 

No Strategy. Yes, the biggest mistake is having no strategy at all. Without a strategy, you may have no goals, leaving you no way of knowing how you’ll get there – and if you’ve even arrived. Creating a strategy may increase your potential for success, both before and after retirement.

 

Frequent Trading. Chasing “hot” investments often leads to despair. Create an asset allocation strategy that is properly diversified to reflect your objectives, risk tolerance, and time horizon; then, make adjustments based on changes in your personal situation, not due to market ups and downs. (The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. Asset allocation and diversification are approaches to help manage investment risk. Asset allocation and diversification do not guarantee against investment loss. Past performance does not guarantee future results.)

 

Not Maximizing Tax-Deferred Savings. Workers have tax-advantaged ways to save for retirement. Not participating in your workplace retirement plan may be a mistake, especially when you’re passing up free money in the form of employer-matching contributions. (Distributions from most employer-sponsored retirement plans are taxed as ordinary income, and if taken before age 59½, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70½, you must begin taking required minimum distributions.)

 

Prioritizing College Funding over Retirement. Your kids’ college education is important, but you may not want to sacrifice your retirement for it. Remember, you can get loans and grants for college, but you can’t for your retirement.

 

Overlooking Health Care Costs. Extended care may be an expense that can undermine your financial strategy for retirement if you don’t prepare for it.

 

Not Adjusting Your Investment Approach Well Before Retirement. The last thing your retirement portfolio can afford is a sharp fall in stock prices and a sustained bear market at the moment you’re ready to stop working. Consider adjusting your asset allocation in advance of tapping your savings so you’re not selling stocks when prices are depressed. (The return and principal value of stock prices will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost. Asset allocation is an approach to help manage investment risk. Asset allocation does not guarantee against investment loss. Past performance does not guarantee future results.)

 

Retiring with Too Much Debt. If too much debt is bad when you’re making money, it can be especially harmful when you’re living in retirement. Consider managing or reducing your debt level before you retire.

 

It’s Not Only About Money. Above all, a rewarding retirement requires good health. So, maintain a healthy diet, exercise regularly, stay socially involved, and remain intellectually active.

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

Citations.

1 - theweek.com/articles/818267/good-bad-401k-rollovers [1/17/18]

Monthly Economic Update

Presented by Beacon Financial Group

In this month’s recap: Stocks, gold, and oil all surge, a door opens for U.S.-China trade talks to resume, and the Federal Reserve suddenly sounds dovish.

THE MONTH IN BRIEF

You could say June was a month of highs. The S&P 500 hit another record peak, oil prices reached year-to-date highs, and gold became more valuable than it had been in six years. (There was also a notable low during the month: the yield of the 10-year Treasury fell below 2%.) Also, a door opened to further trade talks with China, and the latest monetary policy statement from the Federal Reserve hinted at the possibility of easing. For most investors, there was much to appreciate. 1  

DOMESTIC ECONOMIC HEALTH

On June 29, President Trump told reporters, gathered at the latest Group of 20 summit, that he and Chinese President Xi Jinping were planning a resumption of formal trade negotiations between their respective nations. Additionally, President Trump said that the U.S. would refrain from imposing tariffs on an additional $300 billion of Chinese goods for the “time being.” A six-week stalemate in trade talks had weighed on U.S. and foreign stock, bond, and commodities markets in May and June. 2

The Federal Reserve left the benchmark interest rate alone at its June meeting, but its newest policy statement and dot-plot forecast drew considerable attention. Among seventeen Fed officials, eight felt rate cuts would occur by the end of the year, eight saw no rate moves for the rest of the year, and just one saw a 2019 hike. The policy statement also removed reference to the Fed being “patient” about its stance on interest rates, and it mentioned economic and political “uncertainties” that may affect its near-term outlook. Stocks climbed after the announcement, and futures traders saw increased chances of a rate adjustment in either the third or fourth quarter. 3

Fed Chairman Jerome Powell also moved the market on two other occasions during June. On June 4, stocks had their best day since January after he noted that the Fed was keeping a close eye on trade and tariff issues and would “act as appropriate to sustain the expansion” of the economy. Stocks had their poorest day of the month on June 25 after Powell commented that there was no need to “overreact” to a “short-term swing in sentiment” or incoming data. 4,5

Some of the latest data seemed to hint at economic deceleration. The much-watched Institute for Supply Management Purchasing Managers Index for the factory sector fell to a 19-month low of 52.1 in May. The latest Consumer Price Index showed less inflationary pressure; it had advanced 1.8% in the 12 months ending in May, falling short of the Fed’s 2% target. The annualized pace of wholesale inflation dropped from 2.2% in April to 1.8% in May. Perhaps, most importantly, the economy added only 90,000 net new jobs in May, down from 205,000 a month before. (The main unemployment rate stayed at 3.6%; the U-6 rate, a broader measure which includes the underemployed and those who have dropped out of the job market, descended 0.2% to 7.1%.) 6,7

Additionally, consumer confidence slipped. The Conference Board’s monthly index went from 131.3 in May to 121.5 in June (admittedly, the index had climbed higher for three consecutive months). The University of Michigan’s Consumer Sentiment Index treaded water, ending June 0.3 points above its previous reading. 8,9

There were also encouraging signs, however. Retail sales rose 0.5% in May, according to the Census Bureau, and the Department of Commerce recorded a healthy 0.4% May advance for personal spending. The ISM’s nonmanufacturing PMI rose 1.4 points to 56.9 in May. 7,9

Early in the month, it seemed that trade negotiations between China and the U.S. were stalled. At the start of the month, President Trump proposed assessing tariffs on $300 billion more of Chinese imports (and he also talked of imposing a 10% tariff on all imported goods from Mexico, though this did not happen in June). Some optimism returned for investors when a meeting between President Trump and Chinese President Xi Jinping was scheduled for the month-ending Group of 20 summit in Japan. 8

 

GLOBAL ECONOMIC HEALTH

Away from America, concerns about an economic slowdown grew. The central banks of Australia, Chile, India, and Russia all cut interest rates in June, in an effort to stimulate the economies of their respective nations. This was the widest wave of easing seen since the first half of 2016. Word came that IHS Markit’s Global Purchasing Managers Index, a respected barometer of worldwide factory activity, fell to 49.8 in May – an indication that global manufacturing was contracting. It was the weakest reading for the index in seven years. Markit factory PMIs for China, South Korea, the United Kingdom, and Germany were all soft enough to indicate less activity in May. 6,10

Markets in Europe benefited from comments by European Central Bank President Mario Draghi, who said that he was prepared to loosen monetary reins in order to stimulate lethargic economies of member nations within the European Union. Economists polled by Bloomberg believe that the ECB will cut its deposit rate to -0.5% during the third quarter. 11

This month, the United Kingdom will elect a new parliamentary leader. Former U.K. foreign secretary Boris Johnson and current U.K. foreign secretary Jeremy Hunt will face off, with the winner announced on July 23. Johnson is currently seen as the favorite, and he has pledged that the U.K. will make its Brexit from the European Union by Halloween, even without a deal. Analysts think his vow could lead to a fall impasse in Parliament, if the E.U. fails to agree to whatever new deal the U.K. proposes. 12

 

WORLD MARKETS

Several benchmarks recorded June gains of 3% or better. Argentina’s often-volatile Merval jumped 18.72%, the MSCI World index surged 6.46%, Russia’s Micex rose 5.98%, and the MSCI Emerging Markets index gained 5.70%. Next in line, Singapore’s STI rose 4.94%. Brazil’s Bovespa added 4.75%; Taiwan’s TWSE, 4.34%; France’s CAC 40, 4.26%; Hong Kong’s Hang Seng, 4.21%. South Korea’s Kospi advanced 3.99%, while Germany’s DAX rose 3.09%. June also brought a 2.37% gain for China’s Shanghai Composite. 13,14

India's Nifty 50 and BSE Sensex were notable June outliers. The Nifty lost 1.17%, and the Sensex declined 0.89%. 13

 

COMMODITIES MARKETS

Oil and gold certainly grew more valuable in June. As tensions heightened between the U.S. and Iran, West Texas Intermediate crude oil surged 9.07%, finishing June at $58.20 a barrel on the New York Mercantile Exchange. Gold gained 8.20% in June, rising to a June 28 settlement of $1,412.50 per ounce on the NYMEX. 15

Four other important commodities gained at least 5% last month. Unleaded gasoline advanced 5.61%; platinum, 5.50%; heating oil, 5.32%;  silver, 5.02%. Silver finished June at a NYMEX price of $15.27. 15

Other June gains: wheat, 4.41%; sugar, 3.55%; copper, 2.69%; coffee, 2.52%; soybeans, 2.50%; cocoa, 1.83%. June retreats: corn, 1.11%; U.S. Dollar Index, 1.45%; cotton, 3.07%; natural gas, 6.01%. 15,16

 

REAL ESTATE

Mortgage rates fell in June. By the June 27 edition of the Freddie Mac Primary Mortgage Market Survey, the average interest on a 30-year, fixed-rate home loan was 3.73%, compared with 3.99% on May 31. Rates for 15-year, fixed loans also descended in this timeframe, from 3.46% to 3.16%. 17

30-year and 15-year fixed rate mortgages are conventional home loans generally featuring a limit of $484,350 ($726,525 in high-cost areas) that meet the lending requirements of Fannie Mae and Freddie Mac, but they are not mortgages guaranteed or insured by any government agency. Private mortgage insurance, or PMI, is required for any conventional loan with less than a 20% down payment.

The latest data on home buying came from May. Existing home sales rose 2.5%, according to the National Association of Realtors – a nice change from the 0.4% decline in April. New home sales, unfortunately, slid 7.8% during May, and that followed a 3.7% April retreat. 7

Home prices flattened in April, according to the S&P/Case-Shiller 20-City Composite Home Price Index. (Data for May arrives in July.) In year-over-year terms, prices were up 2.5%. 7

Lastly, housing starts weakened 0.9% in May, according to the Census Bureau, but the pace of building permits issued increased 0.3%. 7

TIP OF THE MONTH

If you can reduce some of your fixed, monthly expenses in retirement, you may end up withdrawing thousands of dollars less from your retirement savings per year than you would have otherwise.

LOOKING BACK, LOOKING FORWARD

On June 21, the S&P 500 reached a new all-time peak of 2,964.03 in intraday trading. That was a high note in a strong month for the index. 1

The S&P surged 6.89% in June. The Dow Jones Industrial Average added 7.19%; the Nasdaq Composite, 7.42%. As the closing bell rang on the last market day of the month (June 28), the S&P settled at 2,941.76; the Nasdaq, at 8,006.24; the Dow, at 26,599.96. 18,19,20

Prices of longer-term Treasuries rose in June, and correspondingly, their yields fell. On the first market day of the month (June 3), the yield on the 10-year note dipped under 2%; that had not happened since November 2016. 21

All this greatly improved the year-to-date performance for these benchmarks. At the June 28 close, the S&P 500 was at +17.35% on the year; the Dow, +14.03%; the Nasdaq, +20.66%. 18,19,20

This month, the current U.S. economic expansion became the longest on record. The economy grew 3.1% in the first quarter, by the assessment of the Bureau of Economic Analysis; the BEA’s initial estimate of Q2 economic growth is scheduled to appear July 26. The Federal Reserve’s next monetary policy meeting concludes on July 31. 5,9

QUOTE OF THE MONTH

Be yourself; everyone else is already taken.

OSCAR WILDE

UPCOMING RELEASES

Here is the July schedule of news releases pertaining to fundamental economic and housing indicators: the June ADP employment change report and the June Institute for Supply Management nonmanufacturing index (7/3), the latest monthly employment snapshot from the Department of Labor (7/5), the latest Consumer Price Index (7/11), June retail sales (7/16), June construction activity (7/17), July’s initial University of Michigan consumer sentiment index (7/19), June existing home sales (7/23), June new home sales (7/24), the first estimate of Q1 economic expansion from the federal government (7/26), June consumer spending, the July Consumer Confidence Index from the Conference Board, and June pending home sales (7/30), and last, but certainly not least, a new Federal Reserve monetary policy statement (7/31). (The final July University of Michigan Consumer Sentiment Index is slated for release on 8/2.)

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

CITATIONS:

1 - cnbc.com/2019/06/21/it-was-a-monumental-week-for-markets-with-major-milestones-in-stocks-bonds-gold-and-oil.html [6/21/19]

2 - bloomberg.com/news/articles/2019-06-29/xi-trump-agree-to-restart-trade-talks-china-says [6/29/19]

3 - bloomberg.com/news/articles/2019-06-19/fed-scraps-patient-rate-approach-in-prelude-to-potential-cut [6/19/19]

4 - foxbusiness.com/markets/us-stocks-wall-street-june-4-2019 [6/4/19]  

5 - apnews.com/36e95b56e88e444bb67d997b47b046d6 [5/29/19]

6 - bloomberg.com/news/articles/2019-06-03/asia-factories-feel-trade-war-pain-led-by-south-korea-and-japan [6/3/19]

7 - investing.com/economic-calendar [6/28/19]

8 - thehill.com/policy/finance/450322-consumer-confidence-fell-in-june-amid-trump-tariff-threats-report [5/28/19]

9 - marketwatch.com/tools/calendars/economic [6/28/19]

10 - global-rates.com/interest-rates/central-banks/central-banks.aspx [6/25/19]

11 - bloomberg.com/news/articles/2019-06-27/ecb-seen-cutting-rates-in-september-as-draghi-reloads-stimulus [6/27/19]

12 - reuters.com/article/us-britain-eu-johnson/boris-johnson-says-he-is-serious-about-no-deal-brexit-threat-idUSKCN1TP2SR [6/24/19]

13 - markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [6/28/19]

14 - msci.com/end-of-day-data-search [6/28/19]

15 - money.cnn.com/data/commodities/ [6/28/19]

16 - marketwatch.com/investing/index/dxy/historical [6/28/19]

17 - freddiemac.com/pmms/archive.html [6/27/19]

18 - money.cnn.com/data/markets/sandp [6/29/19]

19 - money.cnn.com/data/markets/dow [6/29/19]

20 - money.cnn.com/data/markets/nasdaq [6/29/19]

21 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [6/28/19]

22 - markets.wsj.com/us [12/31/18]

Tax Moves to Consider in Summer

Presented by Beacon Financial Group

Now is a good time to think about a few financial matters.

 

Consider making tax moves earlier rather than later. If you own a business, earn significant investment income, are recently married or divorced, or have a Flexible Savings Account (FSA), you may want to work on your income tax strategy now rather than in December or April.

   

Do you need to pay estimated income tax? If you are newly retired or newly self-employed, you will want to be familiar with Form 1040-ES and the quarterly deadlines. Each year, estimated tax payments to the Internal Revenue Service are due on or before the following dates: January 15, April 15, June 15, and September 15. (These deadlines are adjusted to the next available workday if a due date falls on a weekend or holiday.) 1

 

Ideally, you would just make four equal payments per year – but if you are a small business owner, your business income could vary per quarter or per season. The risk here is that you will underpay and set yourself up for a tax penalty. Confer with your tax professional to see if you should adjust your estimated tax payments for this or that quarter. 1

  

Has your household size changed? That calls for a look at your pre-tax withholding. No doubt you would like to take home more money now rather than wait to receive it in the form of a tax refund later. Adjusting the withholding on your W-4 may bring you more take-home pay. Ideally, you would adjust it so that you end up owing no tax and receiving no refund. You can adjust it at the I.R.S. Tax Withholding webpage, or via a paper W-4 form. 2

   

Think about how you could use your FSA dollars before the end of the year. The Department of the Treasury has modified the rules for Flexible Spending Accounts (FSAs). The I.R.S. now permits an employer to let an employee carry up to $500 in FSA funds forward into the next calendar year. Alternately, the employer can allow the FSA account-holder extra time to use FSA funds from the prior calendar year (up to 2.5 months). Companies do not have to allow either choice, however. If no grace period or carry-forward is permitted at your workplace, you will want to spend 100% of your FSA funds this year. 3

   

You could help your tax situation by contributing to certain retirement accounts. IRAs and non-Roth workplace retirement plans are funded with pre-tax dollars. By directing money into these retirement savings vehicles, you position yourself for federal tax savings in the year of the contribution. If you are able to make the maximum traditional IRA contribution of $6,000 in 2019, and you are in the 24% tax bracket, that will allow you to claim a $1,440 federal tax deduction for 2019. 4

 

While next April may seem far off, this is an excellent time to think about tax-saving possibilities. You have plenty of time to explore your options.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

    

Citations.

1 - web.blockadvisors.com/estimated-tax-payments-2019/ [5/23/19]

2 - turbotax.intuit.com/tax-tips/tax-refund/top-5-reasons-to-adjust-your-w-4-withholding/L8Gqrgm0V [5/23/19]

3 - investopedia.com/ask/answers/111615/does-money-flexible-spending-account-fsa-roll-over.asp [5/21/19]

4 - fool.com/retirement/2018/12/23/the-6-best-tax-deductions-for-2019.aspx [12/23/18]

 Securities and Advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC

The LPL FInancial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: AL, AZ, CA, CO, CT, DC, DE, FL, GA, ID, IN, KY, LA, MA, MD, MI, MN, MO, NC, NH, NJ, NM, NV, NY, OH, OK, PA, PR, RI, SC, TN, TX, UT, VA, VT, WI, WV.

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Diversification, Patience, and Consistency

Presented by Beacon Financial Group

Three important factors when it comes to your financial life.

Regardless of how the markets may perform, consider making the following part of your investment philosophy:

 

Diversification. The saying “don’t put all your eggs in one basket” has real value when it comes to investing. In a bear or bull market, certain asset classes may perform better than others. If your assets are mostly held in one kind of investment (say, mostly in mutual funds or mostly in CDs or money market accounts), you could be hit hard by stock market losses, or alternately, lose out on potential gains that other kinds of investments may be experiencing. There is an opportunity cost as well as risk. 1

Asset allocation strategies are used in portfolio management. A financial professional can ask you about your goals, tolerance for risk, and assign percentages of your assets to different classes of investments. This diversification is designed to suit your preferred investment style and your objectives.  However, there is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification and asset allocation do not protect against market risk.

 

Patience. Impatient investors obsess on the day-to-day doings of the stock market. Have you ever heard of “stock picking” or “market timing”? How about “day trading”? These are all attempts to exploit short-term fluctuations in value. These investing methods might seem fun and exciting if you like to micromanage, but they could add stress and anxiety to your life, and they may be a poor alternative to a long-range investment strategy built around your life goals. Keep in mind, there is no guaranteed strategy to accurately predict when to enter or exit the market.

 

Consistency. Most people invest a little at a time, within their budget, and with regularity. They invest $50 or $100 or more per month in their 401(k) and similar investments through payroll deduction or automatic withdrawal. They are investing on “autopilot” to help themselves build wealth for retirement and for long-range goals. Investing regularly (and earlier in life) helps you to take advantage of the power of compounding as well.

 

If you don’t have a long-range investment strategy, talk to a qualified financial professional today to determine what strategy may be appropriate for you.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

Securities and Advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC

The LPL FInancial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: AL, AZ, CA, CO, CT, DC, DE, FL, GA, ID, IN, KY, LA, MA, MD, MI, MN, MO, NC, NH, NJ, NM, NV, NY, OH, OK, PA, PR, RI, SC, TN, TX, UT, VA, VT, WI, WV.

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Citations.

1 - forbes.com/sites/brettsteenbarger/2019/05/27/why-diversification-works-in-life-and-markets [5/27/19]

Weekly Economic Update 6/24/2019

Presented by Beacon Financial Group

In this week’s recap: Wall Street maintains its risk-on mood, even as tensions grow between the U.S. and Iran, influenced by a White House tweet and a dovish signal from the Federal Reserve. 

THE WEEK ON WALL STREET

The S&P 500 hit an all-time peak of 2,964.03, in intraday trading Friday, while improving 2.20% across five market days. The Dow Jones Industrial Average and Nasdaq Composite posted respective, 5-day advances of 2.41% and 3.01%. In addition, the MSCI EAFE benchmark of overseas stocks rose 2.58%. 1-3

A White House tweet and the latest monetary policy outlook from the Federal Reserve sent the bulls running. These were the top two financial news items in an eventful week – a week in which the value of West Texas Intermediate crude rose 9.4%, the price of gold went above $1,400 for the first time in six years, and the 10-year Treasury yield fell below 2%. (Treasury yields fall when their prices rise, and vice versa.) 1

 

The Fed’s June Policy Statement

The central bank stood pat on interest rates this month, but the expectations of some of its policymakers changed. About half the 17 Fed officials who have a say in monetary policy now project either one or two quarter-point rate cuts by the end of the year. As recently as March, no Fed official saw grounds for a 2019 cut. 4  

Markets interpreted this shift as a sign that the Fed might soon ease. While a rate cut is by no means a given, traders now believe that the Fed will make either a quarter-point or half-point cut at its July meeting. 5 

 

Last Tuesday’s Market-Moving Tweet

A day earlier, stocks rose after President Trump stated that he and Chinese President Xi Jinping “will be having an extended meeting” at this week’s G-20 summit in Japan. 6 

Investors were encouraged by this note, sensing a chance for progress in U.S.-China trade talks.

 

Final Thought

With tensions persisting between Iran and the U.S., investors are keeping a close eye on both commodity prices and stock indices. Economic or geopolitical developments could heavily influence the short-term movement of the markets.

TIP OF THE WEEK

A no-exam life insurance policy may sound expedient and convenient, but keep this reality in mind: policies that are medically underwritten are usually more affordable than those that are not.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Census Bureau’s snapshot of May new home buying and the Conference Board’s monthly consumer confidence index.

Thursday: The federal government’s third (“final”) estimate of first-quarter gross domestic product.

Friday: May consumer spending data from the Department of Commerce as well as the final June consumer sentiment index from the University of Michigan, another key gauge of consumer confidence.

Source: Econoday / MarketWatch Calendar, June 21, 2019

The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Carnival (CCL)

Tuesday: FedEx (FDX), Micron Technology (MU)

Wednesday: General Mills (GIS), Kraft Heinz (KHC), Paychex (PAYX)

Thursday: Accenture (ACN), Nike (NKE), Walgreens Boots Alliance (WBA)

Friday: Constellation Brands (STZ)

Source: Zacks.com, June 21, 2019

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame, and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

QUOTE OF THE WEEK

“If you want to be respected by others, the great thing is to respect yourself. Only by that, only by self-respect will you compel others to respect you.”

Fyodor Dostoevsky

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.  Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional

CITATIONS:

1 - cnbc.com/2019/06/21/it-was-a-monumental-week-for-markets-with-major-milestones-in-stocks-bonds-gold-and-oil.html [6/21/19]

2 - wsj.com/market-data [6/21/19]

3 - quotes.wsj.com/index/XX/990300/historical-prices [6/21/19]

4 - latimes.com/politics/la-na-pol-trump-fed-interest-rate-policy-20190619-story.html [6/19/19]

5 - cmegroup.com/trading/interest-rates/countdown-to-fomc.html [6/21/19]

6 - cnbc.com/2019/06/18/trump-says-he-and-chinas-xi-spoke-will-have-extended-meeting-next-week-at-g-20.html [6/18/19]

CHART CITATIONS:

wsj.com/market-data [6/21/19]

 

quotes.wsj.com/index/SPX/historical-prices [6/21/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [6/21/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [6/21/19]

Securities and Advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC

The LPL FInancial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: AL, AZ, CA, CO, CT, DC, DE, FL, GA, ID, IN, KY, LA, MA, MD, MI, MN, MO, NC, NH, NJ, NM, NV, NY, OH, OK, PA, PR, RI, SC, TN, TX, UT, VA, VT, WI, WV.

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The Financial Realities of Longevity

Presented by Beacon Financial Group

Your financial future is up to you and no one else

What will be your future? You know that a solid retirement strategy takes your time horizon, an often unpredictable factor, into consideration. Your thinking must include an awareness of how long you must save for and what sort of expenditures may be ahead.

 

The most recent findings from the Centers for Disease Control and Prevention indicate that the average American male lives to age 76, while a female may live to 81. The numbers also take the quality of life into account, putting male and female Americans at “full health” for 67 and 70 years, respectively. 1

 

What do these numbers tell us? Women live longer, for one. Based on your age and the age of your spouse, you can make estimates; you may live longer or less, but averages offer us a window that can be used to plot that retirement strategy. One reality unnoticed in these numbers is that some women may live on their own for many years; if a woman has spent many years as part of a household, living alone shifts the responsibility from two people to one, removing any extra income their partner or spouse contributed.

 

According to the Social Security Administration, single women aged 65 and up (including both the unmarried and the widowed) rely on Social Security payments for 45% of their total income. This compares to 33% for single men of a similar age and 28% for the married couples in that bracket. 2

 

What does that come to in dollars and cents, per year? The most recent tally, based on a 2018 fact sheet, is $13,891. (Men: $17,663.) These are today’s numbers, but they underscore the importance for a retirement strategy that looks at your specific needs and goals – an approach that considers your future health expenses, your day-to-day expenses, as well as the things you want to do for enjoyment in retirement (travel, pastimes, family experiences, and more). 2,3

 

How do you create a strategy that can adapt to life's events? While your future may be unknown, working closely with your advisor may help you to create an approach that's based on your unique goals, risk tolerance and take into account your ever-changing time horizon. Follow up by meeting with a financial professional who can help you put a strategy into action.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

 

Citations.

1 - time.com/5538099/why-do-women-live-longer-than-men/ [2/27/2019]
2 - ssa.gov/news/press/factsheets/women-alt.pdf [8/2018]
3 - washingtonpost.com/outlook/2019/05/14/why-gender-pay-gap-still-persists-what-we-can-do-about-it/ [5/14/2019]

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