Economic Update

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


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 [8/9/19]

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]

 

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.)

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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 - 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]

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]

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

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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 [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]

 

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]

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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Weekly Economic Update 6/17/2019

Presented by Beacon Financial Group

In this week’s recap: the major Wall Street equity indices see further June gains, oil investors react to tanker attacks, and retail sales improve. 

THE WEEK ON WALL STREET

Stocks advanced for a second straight week. The S&P 500 benchmark rose 0.47%; the Nasdaq Composite, 0.70%; the Dow Jones Industrial Average, 0.41%. Overseas shares, as tracked by the MSCI EAFE developed markets index, added 0.20%. 1-2

The market seemed to put its recent preoccupation with trade issues aside, with attention shifting to this week’s Federal Reserve monetary policy meeting. Traders in futures markets now believe the Fed will make a rate cut in July, so its June policy statement will be of great interest. 3

 

Oil Prices Roller-coaster

Attacks on vessels in the Strait of Hormuz, the busy oil shipping channel, helped to push the price of West Texas Intermediate crude 2.2% higher Thursday, just a day after a 4% fall. Even so, WTI crude lost 2.7% in five days, closing Friday at $52.51 on the New York Mercantile Exchange.

Investors wondered at mid-week if tensions in the Persian Gulf region would soon impact oil output and transport. Looking beyond the short term, however, the International Energy Agency reduced its 2020 projection for global oil demand. 4 

 

Households Bought More in May

Retail sales rose 0.5% last month, according to the Department of Commerce. Across the year ending in May, they advanced 3.2%. The previously announced 0.2% April retreat was revised into a 0.3% gain. 

These numbers affirm strong household spending this spring. Consumer spending accounts for more than two-thirds of the nation’s gross domestic product. 5

 

WHAT’S AHEAD

In terms of news, Wednesday offers what may prove to be the biggest economic event of the week: a Federal Reserve policy statement and press conference.

TIP OF THE WEEK

Some people take out personal loans to pay off high-interest credit card debts. For some, this is a worthwhile financial move – but it has potential drawbacks. It can feel like exchanging one debt for another, and the conditions or behaviors that created the original credit card debt may remain.

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: The Federal Reserve concludes a 2-day policy meeting, with Fed chair Jerome Powell addressing the media afterward.

Friday: The National Association of Realtors releases data on May existing home sales.

Source: Econoday / MarketWatch Calendar, June 14, 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

Tuesday: Jabil (JBL)

Wednesday: Kraft Heinz (KHC), Oracle (ORCL)

Thursday: Kroger (KR), Red Hat (RHT), Darden Restaurants (DRI)

Friday: CarMax (KMX)

Source: Zacks.com, June 14, 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

“It's hard to beat a person who never gives up.”

BABE RUTH

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 [6/14/19]

2 - quotes.wsj.com/index/XX/990300/historical-prices [6/14/19]

3 - cnbc.com/2019/06/14/stock-market-middle-east-tensions-weigh-china-data-in-focus.html [6/14/19]

4 - marketwatch.com/story/oil-prices-steady-as-market-keeps-watch-on-strait-of-hormuz-after-tanker-attacks-2019-06-14 [6/14/19]

5 - cnbc.com/2019/06/14/retail-sales-may-2019.html [6/14/19]

CHART CITATIONS:

wsj.com/market-data [6/14/19]

quotes.wsj.com/index/SPX/historical-prices [6/14/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [6/14/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [6/14/19]

 

 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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Monthly Economic Update

Presented by Beacon Financial Group

In this month’s recap: major stock benchmarks descend as new developments in the U.S.-China tariff dispute lead to a broad risk-off in equities; consumer confidence surges, while the housing market cools.

THE MONTH IN BRIEF

Hopes for a quick resolution to the U.S.-China trade dispute faded in May as discussions broke down and rhetoric from both sides turned tough again. The disappointment lingered on Wall Street: the month saw losses for stocks. On Main Street, consumer confidence was strong and inflation tame. Mortgage rates reached year-to-date lows, but the latest data on home sales showed weak spring buying. The price of crude oil fell significantly, and so did the yield on the 10-year Treasury. 1

DOMESTIC ECONOMIC HEALTH

Last month, trade was the story, and tariffs were on the minds of market participants. On May 5, President Trump announced that U.S. import taxes levied on $200 billion of Chinese products would soon rise from 10% to 25% and that virtually all other goods arriving from China would “shortly” face a 25% tariff. China retaliated, declaring that it would hike tariffs already imposed on $60 billion worth of American products, effective June 1. More tariff developments followed. On May 17, President Trump opted to delay levies planned for imported autos until later in 2019, and he removed tariffs on metals arriving from Canada and Mexico. 2,3

Late May brought more attention-getting headlines. On May 29, China’s state media suggested that its government might consider banning rare-earth mineral exports to America. (China mines or produces about 80% of the world’s rare earths.) On May 30, President Trump announced that all of Mexico’s exports to the U.S. would face 5% tariffs starting on June 10; these taxes could rise to as high as 25% by October. 4,5

Households, meanwhile, felt good about the economy and their financial prospects in May. The Conference Board’s monthly consumer confidence index rose nearly five points to 134.1; that was its best reading since November. (Confidence about the present economic situation reached its highest level since December 2000.) The University of Michigan’s consumer sentiment index jumped to a 15-year peak of 102.4 at mid-month, and it ended May at 100.0. 6,7

Consumer spending rose another 0.3% in April, by the calculation of the Department of Commerce. Overall retail sales declined 0.2% in April, but core retail sales (minus auto and gas purchases) improved 0.1%. 6

Inflation advanced at a mild 2.0% in the year ending in April, according to the latest Consumer Price Index. The CPI rose 0.3% in the fourth month of the year. 6

The Department of Labor released its April employment report at the start of May, and the latest news on hiring was certainly impressive. April saw a net gain of 263,000 jobs, trouncing a Bloomberg consensus forecast of 190,000. The jobless rate fell 0.2% to 3.6%, nearly a 50-year low. The U-6 rate, which counts the unemployed, the underemployed, and those who have stopped looking for work, stayed at 7.3% for the third straight month. Wages were growing at a 3.2% annualized pace. 8

On May 1, the Federal Reserve left interest rates unchanged. While the Fed was not expected to make a move, some investors wondered if it was considering the possibility of a rate cut at some point before the end of the year. In fact, at the end of May, the market expectation was for the Fed to make two rate cuts by next January, with the first coming in September. At the central bank’s May 1 press conference, Fed chair Jerome Powell did not refer to any kind of reconsideration of monetary policy, simply telling reporters that “we don’t see a strong reason for moving in one direction or the other.” 9,10

There was another yield curve inversion in the bond market: in the second half of May, the yield on the 3-month U.S. Treasury note exceeded the yield on the 10-year U.S. Treasury note. On May 29, the 3-month yield topped the 10-year yield by the greatest margin since the financial crisis. Economists pay close attention to these yield curve inversions; some believe they presage recessions. Yields on Treasuries decline when their prices rise, and vice versa; demand for Treasuries increased during May, as stocks retreated here and overseas. 11

As for other economic indicators arriving during May, the April Institute for Supply Management manufacturing index (based on a monthly survey of purchasing managers at large firms) fell 2.5 points to a decent 52.8 reading; ISM’s April service-sector PMI lost 0.6 points, descending to 55.5. Industrial output fell 0.5% in April; durable goods orders, 2.1%. 6,12

 

GLOBAL ECONOMIC HEALTH

U.S. tariffs did seem to be affecting China’s factory sector, and by extension, its economy. China’s official manufacturing purchasing managers index displayed a May reading of 49.4, indicating contraction instead of expansion. 5

India was no longer home to the world’s fastest-growing economy. Last month, its government stated first-quarter gross domestic product of 5.8%, below that of China (which reported an official Q1 GDP of 6.4%). A June interest rate cut by India’s central bank is widely expected. 13

A change in leadership was ahead for the United Kingdom. Prime Minister Theresa May announced she would presently resign; her successor will likely take office in July. Boris Johnson, a fellow conservative, is widely considered to be the favorite in the forthcoming parliamentary elections. Johnson has stated that the U.K. must make its Brexit from the European Union by the current October 31 deadline, deal in place or not. Some analysts now see a stronger possibility of a no-deal Brexit. 14

WORLD MARKETS

Aside from a few outliers, most foreign stock markets went the way of our stock market in May. Five notable benchmarks recorded monthly gains: Argentina’s often-volatile Merval rose 15.79%, Russia’s Micex added 4.14%, India’s Sensex and Nifty 50 respectively rose 1.75% and 1.49%, and Australia’s All Ordinaries improved 1.14%. 15

 

May losses were widespread. The MSCI World index fell 6.08%; the MSCI Emerging Markets index, 7.53%. China’s Shanghai Composite declined 5.84%; Japan’s Nikkei 225, 7.45%; Hong Kong’s Hang Seng, 9.42%. Mexico’s Bolsa lost 4.14% for the month; Canada’s TSX Composite, 3.28%. Germany’s DAX slipped 5.00%; France’s CAC 40, 6.78%. The regional FTSEurofirst 300 lost 5.50%. 15,16

 

COMMODITIES MARKETS

Softs and energy futures saw some big ups and downs in May. Unleaded gasoline fell 16.63% on the New York Mercantile Exchange, and crude oil (the West Texas Intermediate variety) slipped 15.93%. Crude finished May at $53.36 per barrel. May losses also came for heating oil (11.73%) and natural gas (4.16%). Three crops soared: coffee improved 14.42%; wheat, 20.61%; corn, 20.85%. Soybeans rose 4.40%. Among notable crops, the biggest loser was cotton, down 9.69%. 17

 

Gold outperformed other key metals, with a 1.75% rise to a $1,350.50 May 31 close on the NYMEX. Silver wrapped up May at $14.56, losing 2.31%. Copper fell 9.14% for the month; platinum, 10.71%. 17

 

REAL ESTATE

New and existing home sales numbers from April arrived in May, and there were declines in both categories. The National Association of Realtors said that the pace of residential resales weakened 0.4%, on the heels of a 4.9% retreat in March; the April NAR pending home sales index also dipped 1.5%. New home buying, according to the Census Bureau, slowed 6.9% in the fourth month of the year, following a (revised) 8.1% March gain. The latest 20-city S&P/Case-Shiller home price index showed 2.7% annual appreciation in the year ending in March, down from 3.0% in the prior edition. 6

Residential construction activity picked up in April: the Census Bureau recorded a 5.7% advance for housing starts. Building permits rose 0.6%. 6

Mortgage rates dipped in May. A 30-year, fixed-rate loan bore an average interest rate of just 3.99% in the week ending May 30, according to Freddie Mac’s Primary Mortgage Market Survey. In the last April edition of the PMMS (April 25), the interest rate on the 30-year FRM averaged 4.20%. Average interest on the 15-year, fixed-rate mortgage also declined in this timeframe, from 3.64% to 3.46%. 18

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.

TIP OF THE MONTH

If your teen or young adult children perform “odd jobs” to make extra cash, they are self-employed, and the money they earn from this work is taxable. Your children may be responsible for paying income taxes on such earnings, possibly through estimated tax payments.

LOOKING BACK, LOOKING FORWARD

Things did not go well on Wall Street in May, but the year-to-date advances of the three major U.S. equity benchmarks were still impressive, five months into the year. The Chicago Board Options Volatility Index, or CBOE VIX, a leading measure of stock market volatility, rose 42.61% in May, but remained down 26.40% YTD when the month wrapped up. The S&P 500’s real estate sector was the only one of its eleven industry groups to advance last month, and it had gained more than any other sector YTD (17.01%) when May ended. 1

So, what will it take to change the market’s mood, and how soon can such a change happen? Short of a quickly forged bilateral agreement between the U.S. and China, it may take quite a diversion to take Wall Street’s collective mind off trade. Throw in a recently inverted yield curve and assorted concerns about the business cycle slowing, and stocks may be in for a challenge in June. Perhaps the May jobs report, the June Federal Reserve policy meeting, or the G-20 summit at the end of this month (which could feature a meeting between President Trump and China’s President Xi) may have an influence. For the record, the S&P 500 has only had 14 negative Mays in the past 40 years, and June gains followed eight of them. Past performance is not indicative of future results. Equities may face more turbulence this month as the markets attempt to sort out the many uncertainties. 22

QUOTE OF THE MONTH

“There is no chance, no destiny, no fate, that can hinder or control the firm resolve of a determined soul.”

Ella Wheeler Wilcox

UPCOMING RELEASES

Here is what is ahead in terms of major economic news in June… the May ADP payrolls report, the Institute for Supply Management’s May service sector PMI, and a new Beige Book from the Federal Reserve (6/5), the Department of Labor’s May employment snapshot (6/7), May wholesale inflation (6/11), May consumer inflation (6/12), the University of Michigan’s initial June consumer sentiment index and May retail sales (6/14), May housing starts and building permits (6/18), a Federal Reserve announcement following the conclusion of a 2-day monetary policy meeting (6/19), May existing home sales (6/21), the Conference Board’s latest consumer confidence index and May new home sales (6/25), May hard goods orders (6/26), May pending home sales and the “final” estimate of Q1 economic expansion from the Bureau of Economic Analysis (6/27), and then May consumer spending and the final June University of Michigan consumer sentiment index (6/28).

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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 - barchart.com/stocks/indices?viewName=performance [5/31/19]

2 - usatoday.com/story/money/2019/05/30/tariffs-pause-chinas-purchases-american-soybeans-report-says/1284336001/ [5/30/19]

3 - piie.com/blogs/trade-investment-policy-watch/trump-trade-war-china-date-guide [5/31/19]

4 - staradvertiser.com/2019/05/29/breaking-news/china-dangles-potentially-harmful-new-threat-in-trade-war/ [5/29/19]

5 - foxbusiness.com/markets/us-stocks-wall-street-may-31-2019 [5/31/19]

6 - investing.com/economic-calendar/ [5/31/19]

7 - bloomberg.com/news/articles/2019-05-28/u-s-consumer-confidence-tops-forecasts-rises-to-six-month-high [5/28/19]  

8 - finance.yahoo.com/news/april-jobs-report-2019-220932515.html [5/3/19]

9 - bankrate.com/banking/federal-reserve/fomc-meeting-recap-april-may-2019 [5/1/19]

10 - cnbc.com/2019/05/29/the-market-now-thinks-the-fed-will-cut-rates-twice-by-january-2020.html [5/29/19]

11 - cnbc.com/2019/05/29/us-bonds-wall-street-monitors-fresh-batch-of-economic-data-auctions.html [5/29/19]

12 - marketwatch.com/tools/calendars/economic [5/3/19]

13 - bbc.com/news/business-48478028 [5/31/19]

14 - theguardian.com/politics/2019/may/24/deal-or-no-deal-what-next-for-brexit-the-tories-and-the-country [5/24/19]

15 - markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [5/31/19]

16 - msci.com/end-of-day-data-search [5/31/19]

17 - money.cnn.com/data/commodities/ [5/31/19]   

18 - freddiemac.com/pmms/archive.html [6/2/19]

19 - markets.wsj.com/us [12/31/18] 

20 - money.cnn.com/data/markets/nasdaq/ [5/31/19]

21 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [5/31/19]

22 - barrons.com/articles/stock-market-in-june-51559257496 [5/31/19] 

 

Weekly Economic Update 6/3/2019

Presented by Beacon Financial Group

In this week’s recap: U.S. benchmarks decline as trade issues remain front and center in the Wall Street conversation; major consumer confidence indices are notably high.

THE WEEK ON WALL STREET

Stocks struggled during a 4-day market week as the U.S.-China trade standoff continued to weigh on the minds of market participants. From the Friday, May 24 close to the Friday, May 31 close, the S&P 500 retreated 2.62%; the Nasdaq Composite, 2.41%; the Dow Jones Industrial Average, 3.01%. The MSCI EAFE index of overseas stocks dipped just 1.47% in a week. 1,2

Trade is dominating the conversation in the financial markets, with developments steadily unfolding. Wednesday, China’s state media suggested that the country could soon cut off exports of rare earths to the U.S. Late Thursday, the Trump administration announced 5% tariffs on all imports from Mexico, effective June 10; these taxes could rise in the coming months. 3,4

 

MEANWHILE, ON MAIN STREET…

The Conference Board’s consumer confidence index soared to 134.1 in May, its highest reading since November; the consumer view of present economic conditions was the best since the end of 2000. Additionally, the University of Michigan’s consumer sentiment index ended May at 100.00, near the 15-year peak of 102.4 seen earlier in the month. 5,6

Spring also brought a solid advance in consumer spending. April’s gain was 0.3%, according to the Bureau of Economic Analysis. 6 

 

FINAL THOUGHT

While Wall Street remains cautious and concerned about trade, consumers appear to be upbeat, sensing widespread economic prosperity. This underscores the fact that the state of the economy does not necessarily correspond to the state of the stock market (and vice versa).

TIP OF THE WEEK

A will commonly needs to go through probate, and it can also be challenged during the probate process. On the other hand, if you transfer the title of certain assets you own into a properly written living trust, those assets can avoid probate after your death.

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: The Institute for Supply Management releases its latest factory purchasing manager index, which takes the pulse of the U.S. manufacturing sector.

Tuesday: Federal Reserve Chairman Jerome Powell speaks on monetary policy at the Federal Reserve Bank of Chicago.

Wednesday: Payroll giant ADP releases its May private-sector employment snapshot.

Friday: The Department of Labor presents its May employment report.

Source: Econoday / MarketWatch Calendar, May 31, 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

Tuesday: Cracker Barrel Old Country Store (CBRL), Salesforce (CRM)

Thursday: Beyond Meat (BYND), J.M. Smucker (SJM)

Source: Morningstar.com, May 31, 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

“The past is but the beginning of a beginning, and all that is or has been is but the twilight of the dawn.”

H.G. WELLS

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 [5/31/19]

2 - quotes.wsj.com/index/XX/990300/historical-prices [5/31/19]

3 - tinyurl.com/y3qycvq6 [5/30/19]

4 - foxbusiness.com/markets/us-stocks-wall-street-may-31-2019 [5/31/19]

5 - bloomberg.com/news/articles/2019-05-28/u-s-consumer-confidence-tops-forecasts-rises-to-six-month-high [5/28/19]

6 - investing.com/economic-calendar/ [5/31/19]

CHART CITATIONS:

wsj.com/market-data [5/31/19]

quotes.wsj.com/index/SPX/historical-prices [5/31/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [5/31/19]

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [5/31/19}

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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Weekly Economic Update 5/20/2019

Presented by Beacon Financial Group

In this week’s recap: tariffs and U.S.-China trade tensions once again become the talk of Wall Street, and U.S. stocks end up lower, week-over-week.

THE WEEK ON WALL STREET

Stocks fell sharply at the start of last week over trade tensions, then recovered with help from strong earnings and indications that U.S.-China trade talks would continue. Even so, the major indices had a down week. The S&P 500 lost 0.76%, while the Nasdaq Composite fell 1.27%, and the Dow Jones Industrial Average declined 0.69%.

In contrast, the MSCI EAFE benchmark for international stocks rose 0.19%. 1-2

 

THE LATEST TRADE DEVELOPMENTS

A broad selloff occurred Monday after China announced it would respond to increased U.S. tariffs by boosting its own import taxes on $60 billion of U.S. products. Friday morning, the Street breathed a sigh of relief as the Trump administration decided to delay 25% tariffs planned for imported cars and car parts; they had been slated to take effect on May 18. Just hours later, President Trump announced an end to U.S. tariffs on metals coming from Canada and Mexico.

At midweek, Secretary of the Treasury Steven Mnuchin told reporters that he expected the U.S. to resume trade negotiations with China in “the near future.” 3-5 

 

Earnings Season Winds Down

The first-quarter earnings scorecard is nearly complete, as more than 90% of S&P 500 companies have reported actual Q1 results.

Stock market analytics firm FactSet notes that 76% of these firms have beaten consensus earnings-per-share estimates. Overall earnings for S&P 500 components have surpassed expectations by 5.4%. Both of these percentages are above 5-year averages. 6

 

FINAL THOUGHT

The market is quite sensitive to trade developments at the moment, and it is unclear whether this will be a short-term trend or a long-term influence on prices. While the U.S. prepares its next moves, China is also preparing its response to any new U.S. tariffs, which could include manipulating its currency.

TIP OF THE WEEK

A small, but growing, percentage of companies now offer student debt assistance as an employee benefit. If you are looking for a new job and have outstanding education debt, research whether a potential employer can help you pay down your student loan balance.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The April existing home sales report from the National Association of Realtors.

Wednesday: Minutes from the Federal Reserve’s May policy meeting.

Thursday: April new home sales figures from the Census Bureau.

Source: Econoday / MarketWatch Calendar, May 17, 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

Tuesday: AutoZone (AZO), Home Depot (HD), Kohl’s (KSS), Nordstrom (JWN)

Wednesday: Analog Devices (ADI), Lowe’s (LOW), Target (TGT)

Thursday: Best Buy (BBY), Intuit (INTU), TD Bank (TD)

Friday: Foot Locker (FL)

Source: Morningstar.com, May 17, 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

“Every great mistake has a halfway moment, a split second when it can be recalled and perhaps remedied.”

PEARL S. BUCK

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. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. 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 [5/17/19]

2 - quotes.wsj.com/index/XX/990300/historical-prices [5/17/19]

3 - reuters.com/article/us-usa-trade-china/tough-talk-from-china-leaves-trade-talks-with-u-s-in-limbo-idUSKCN1SN207 [5/17/19]

4 - marketwatch.com/story/mnuchin-says-he-expects-to-go-to-beijing-to-continue-trade-talks-in-the-near-future-2019-05-15 [5/15/19]

5 - npr.org/2019/05/17/724357441/u-s-to-lift-tariffs-on-canadas-and-mexico-s-steel-and-aluminum [5/17/19]

6 - insight.factset.com/market-punished-sp-500-companies-reporting-negative-eps-surprises-in-q1 [5/17/19]

 

CHART CITATIONS:

wsj.com/market-data [5/17/19]

   

quotes.wsj.com/index/SPX/historical-prices [5/17/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [5/17/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [5/17/19]

 

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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Weekly Economic Update 5/13/2019

Presented by Beacon Financial Group

In this week’s recap: domestic and international stocks sell off as higher tariffs go into effect for Chinese goods coming to the U.S., while the wave of notable initial public offerings continues.

THE WEEK ON WALL STREET

As we noted recently, Wall Street has a wandering eye. Last week, it focused on the new tariff threats in the ongoing U.S.-China trade dispute. Stocks fell across five trading sessions: the Dow Jones Industrial Average lost 2.12%; the S&P 500, 2.18%; the Nasdaq Composite, 3.03%. International stocks also fell: the MSCI EAFE index declined 3.06%. 

Earnings and big-name initial public offerings mattered little last week. Traders were more concerned about how consumers and corporations might be affected by higher import taxes in future quarters. 1,2

 

TARIFFS INCREASE

At 12:01 am on Friday, duties on $200 billion worth of Chinese products coming to the U.S. rose from 10% to 25%. Just days earlier, President Trump had tweeted that the U.S. might also tax another $325 billion of Chinese imports, mainly consumer goods.

While the proposed new taxes might take months to implement, institutional investors reacted negatively to this information, perceiving that trade talks were stalled. 3,4 

 

FINAL THOUGHT

A few weeks ago, market watchers noted the huge number of initial public offerings anticipated for 2019. One well-known tech firm completed its IPO on Friday, and the wave of tech IPOs is still building. According to research firm CB Insights, the average stock market valuation of the venture-capital-backed tech companies going public this year is $9.6 billion.

TIP OF THE WEEK

Getting married? Think about whether you want to keep your finances separate or create some joint investment and bank accounts. If you want a joint investment account, you will need to agree on the investment style

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: April retail sales figures from the Census Bureau.

Friday: The University of Michigan’s preliminary May consumer sentiment index, a measure of consumer confidence.

Source: Econoday / MarketWatch Calendar, May 10, 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: Take-Two Interactive (TTWO)

Tuesday: Agilent (A), Ralph Lauren (RL)

Wednesday: Alibaba (BABA), Cisco (CSCO), Macy’s (M)

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

Friday: Deere & Co. (DE)

Source: Morningstar.com, May 10, 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

“The possible’s slow fuse is lit by the imagination.”

EMILY DICKINSON

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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 [5/10/19]

 

2 - quotes.wsj.com/index/XX/990300/historical-prices [5/10/19]

3 - cnn.com/2019/05/10/business/china-us-tariffs-trade/index.html [5/10/19]

4 - cnbc.com/2019/05/07/if-trump-slaps-china-with-all-the-tariffs-threatened-it-could-be-the-us-consumer-that-pays.html [5/7/19]

5 - nytimes.com/interactive/2019/05/09/business/dealbook/tech-ipos-uber.html [5/9/19]

CHART CITATIONS:

wsj.com/market-data [5/10/19]

 

quotes.wsj.com/index/SPX/historical-prices [5/10/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [5/10/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [5/10/19]

 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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Weekly Economic Update 5/6/2019

Presented by Beacon Financial Group

In this week’s recap: the Federal Reserve stands pat on interest rates, key indicators show strength, and stocks end the week little changed.

THE WEEK ON WALL STREET

Stocks were up and down last week, and the three major benchmarks ended up little changed after five trading days. The S&P 500 rose 0.20% for the week; the Nasdaq Composite, 0.22%. The Dow Jones Industrial Average declined 0.14%.

The MSCI EAFE index, a benchmark for international stocks, declined 0.21%. 1-2

 

The Fed Emphasizes Patience

The Federal Reserve held interest rates steady at its May meeting. Its May 1st policy statement noted “solid” job growth and economic activity, but only tame inflation pressure.

While the Fed was not expected to make a move, some investors wondered if its latest policy statement might hint at the possibility of a rate cut later this year. No such hint appeared. Fed chair Jerome Powell told the media Wednesday that “we don’t see a strong reason for moving in one direction or the other.” 3

 

Indications of a Thriving Economy

Employers added 263,000 net new jobs in April. Economists polled by Bloomberg forecast a gain of 190,000. The jobless rate fell to 3.6% last month, the lowest in half a century.

This better-than-expected employment snapshot comes on the heels of a first-quarter Gross Domestic Product (GDP) reading that surprised to the upside. In another bit of good news, personal spending rose an impressive 0.9% in March. 4-5

Final Thought

On Wednesday and Thursday, stocks fell in the wake of the Fed policy statement. Friday, they more or less recouped their losses after the impressive April jobs report. Ups and downs like these come with the territory when you invest; the key is to stay patient and think long term instead of short term.

TIP OF THE WEEK

If you are young and want to make financial progress out of college, consider starting your career in a metro area where housing and living expenses are relatively low. Some of the most “exciting” cities to live and work in are also some of the priciest, with their millennial and Gen Y residents deeply in debt.

THE WEEK AHEAD: KEY ECONOMIC DATA

Friday: The April Consumer Price Index, monitoring monthly and annual inflation.

Source: Econoday / MarketWatch Calendar, May 3, 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. Econoday Inc. is a technology and information company providing data and analysis for the financial industry, participants in the financial community, and individual investors. MarketWatch, a financial information website, is a subsidiary of Dow Jones & Company, a property of News Corp. 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 are also subject to revision. The release of data may be delayed without notice for a variety of reasons, including the shutdown of the government agency or change at the private institution that handles the material.

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Monday: Occidental Petroleum (OXY), Tyson Foods (TSN)

Tuesday: Allergan (AGN), Anheuser-Busch (BUD), Lyft (LYFT)

Wednesday: Green Dot (GDOT), Hostess Brands (TWNK), Walt Disney Co. (DIS)

Thursday: AXA Equitable Holdings (EQH), Keurig Dr. Pepper (KDP), News Corp. (NWSA)

Friday: Enbridge (ENB), Marriott International (MAR), Viacom (VIA)

Source: Morningstar.com, May 3, 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

“Do not go where the path may lead, go instead where there is no path and leave a trail.”

RALPH WALDO EMERSON

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 - markets.wsj.com/usoverview [5/3/19] 

2 - quotes.wsj.com/index/XX/990300/historical-prices [5/3/19]

3 - bankrate.com/banking/federal-reserve/fomc-meeting-recap-april-may-2019 [5/1/19]

4 - nytimes.com/2019/05/03/business/economy/jobs-report-april.html [5/3/19]

5 - marketwatch.com/tools/calendars/economic [5/3/19]

CHART CITATIONS:

markets.wsj.com/usoverview [5/3/19]

 

quotes.wsj.com/index/SPX/historical-prices [5/3/19]

 

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

 

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

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [5/3/19]

 

 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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Weekly Economic Update 4/29/2019

Presented by Beacon Financial Group

In this week’s recap: stocks come all the way back from their December lows, Q1 growth surpasses expectations, and earnings take center stage.

THE WEEK ON WALL STREET

Stocks returned to record territory, with both the S&P 500 and the Nasdaq Composite closing at historic highs. The S&P gained 1.20% for the week; the Nasdaq, 1.85%. The Dow Jones Industrial Average lagged, losing 0.06%. The MSCI EAFE index of international stocks lost 0.52%. 1-2

The S&P took only 17 weeks to fully rebound from its December low. 3

 

A SHIFT IN FOCUS

Last month, Wall Street fixated on trade, reacting to even the slightest hint of progress in U.S.-China negotiations. This month, the trade talks have taken a back seat, and the fixation is on earnings.

Anxieties about a possible earnings recession may be fading. So far, first-quarter results for S&P 500 firms are 5.3% above expectations, which compares to a 5-year average of 4.8%. 4

At some point, trade talk will come back, or other developments will lead Wall Street to chase other trends. The thing to remember is that Wall Street is fickle: what preoccupies it one week may be shrugged off the next. Short-term trends ultimately amount to background noise during the long-term pursuit of your financial goals. 

A Strong first quarter

Friday, the Bureau of Economic Analysis said that the economy expanded at a 3.2% pace in Q1. The number surprised to the upside. Economists surveyed by Dow Jones estimated Q1 gross domestic product would increase 2.5%. 5

 

What’s ahead

Investors have all kinds of news to consider this week. There will be a plethora of earnings calls, plus important reports on consumer spending and hiring. Also, Federal Reserve chair Jerome Powell will hold a press conference following the central bank’s May meeting.

TIP OF THE WEEK

Too many business owners apply for loans too late. Financing is more likely to be approved when a business is financially stable. A loan arranged when a business is healthy could be used for business expansion as well as emergencies.

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: March personal spending figures from the Department of Commerce.

Tuesday: The Conference Board’s April consumer confidence index.

Wednesday: The Federal Reserve announces its latest interest rate decision.

Friday: The April jobs report from the Department of Labor.

Source: Econoday / MarketWatch Calendar, April 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: Alphabet (GOOGL), Kemper (KMPR)

Tuesday: Amgen (AMGN), Apple (AAPL), Cummins (CMI), McDonalds (MCD)

Wednesday: Allstate (ALL), CVS Health (CVS), Humana (HUM), Public Storage (PSA)

Thursday: CBS (CBS), Cigna (CI), Dunkin’ Brands (DNKN), Gilead Sciences (GILD)

Friday: Fiat Chrysler (FCAU)

Source: Morningstar.com, April 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

“You can only perceive real beauty in a person as they get older.”

ANOUK AIMEE

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 - markets.wsj.com/usoverview [4/26/19] 

2 - quotes.wsj.com/index/XX/990300/historical-prices [4/26/19]

3 - bloomberg.com/news/articles/2019-04-23/abyss-averted-in-stocks-as-valuations-and-rates-restore-bull-run [4/23/19]

4 - insight.factset.com/earnings-season-update-april-26-2019 [4/26/19]

5 - cnbc.com/2019/04/26/gdp-q1-2019-first-read.html [4/26/19]

CHART CITATIONS:

markets.wsj.com/usoverview [4/26/19]

 

quotes.wsj.com/index/SPX/historical-prices [4/26/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [4/26/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [4/26/19]

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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Weekly Economic Update 4/22/2019

Presented by Beacon Financial Group

In this week’s recap: stocks move sideways as earnings season gathers momentum, and retail sales jump.

THE WEEK ON WALL STREET

A short and relatively placid trading week wrapped up Thursday, with the major indices turning in mixed performances. The S&P 500 retreated 0.08%, the Nasdaq Composite advanced 0.17%, and the Dow Jones Industrial Average gained 0.56%. The MSCI EAFE index, tracking foreign stocks in developed countries, added 0.65%. 1-4

Nothing really catalytic emerged to drive the market last week, and volumes were low.

 

Earnings Season Update

More than 78% of S&P 500 firms reporting so far this earnings season have surpassed analyst expectations, according to FactSet. Since guidance tends to be conservative, there is the possibility that more companies will beat forecasts than expected. 5

The initial public offering market remained strong. Two high-profile technology companies came public on Thursday and were met with enthusiasm from investors. As mentioned in recent weeks, 2019 could be a banner year for IPOs. 

 

Retail Sales Rebound

March’s 1.6% gain was the biggest monthly advance seen since September 2017. Sales of cars and gasoline rose more than 3%. 6

If the upcoming March consumer spending report is also impressive, concerns about the current business cycle peaking may recede.

Final Thought

Nearly 800 companies will report earnings this week, including some high-profile names. This kicks off five weeks of active daily earnings reports.

Investors will watch corporate profits, guidance, and fundamental indicators with great interest, to try and glean whether the economy is strengthening or softening. Reports on first-quarter economic growth and existing home sales will command particular attention.

TIP OF THE WEEK


Your insurance needs should be reevaluated every few years. Life events like a marriage, a home purchase, or retirement may mean you need more (or less) coverage.

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: March existing home sales figures from the National Association of Realtors.

Tuesday: March new home sales numbers from the Census Bureau.

Friday: The first estimate of first-quarter gross domestic product (GDP) from the federal government, and the final April University of Michigan consumer sentiment index, a gauge of consumer confidence levels.

Source: Econoday / MarketWatch Calendar, April 18, 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: Halliburton (HAL), Kimberly-Clark (KMB), Whirlpool (WHR)

Tuesday: Coca-Cola (KO), Harley-Davidson (HOG), Procter & Gamble (PG), Twitter (TWTR), Verizon (VZ)

Wednesday: Anthem (ANTM), Boeing (BA), Caterpillar (CAT), Facebook (FB)

Thursday: 3M (MMM), AbbVie (ABBV), Amazon (AMZN), Starbucks (SBUX)

Friday: American Airlines (AAL), Colgate-Palmolive (CL), ExxonMobil (XOM)

Source: Morningstar.com, April 18, 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 are the only person on earth who can use your ability.

ZIG ZIGLAR

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 - quotes.wsj.com/index/SPX [4/18/19] 

2 - quotes.wsj.com/index/DJIA [4/18/19]         

3 - quotes.wsj.com/index/COMP [4/18/19]        

4 - quotes.wsj.com/index/XX/990300/historical-prices [4/18/19]

5 - cnbc.com/2019/04/18/stocks-market-earnings-retail-sales-and-jobless-data-in-focus.html [4/18/19]

6 - reuters.com/article/us-usa-economy-retail/us-retail-sales-post-biggest-gain-in-one-and-a-half-years-in-march-idUSKCN1RU1GI [4/18/19]

CHART CITATIONS:

quotes.wsj.com/index/SPX [4/18/19] 

quotes.wsj.com/index/DJIA [4/18/19]          

quotes.wsj.com/index/COMP [4/18/19]        

quotes.wsj.com/index/XX/990300/historical-prices [4/18/19]

markets.wsj.com [4/18/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [4/18/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [4/18/19]

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.

Privacy Policy

Weekly Economic Update 4/15/2019

Presented by Beacon Financial Group

In this week’s recap: stocks advance after earnings season gets off to an encouraging start, and consumer prices rise the most in more than a year.

THE WEEK ON WALL STREET

Stocks broke out of a narrow range on Friday following news that two major banks grew their bottom line in the first quarter. For the week, the S&P 500 rose 0.79%; the Nasdaq Composite, 0.91%. The Dow Jones Industrial Average improved 0.50%. Turning to overseas stocks, the MSCI EAFE index declined 0.09% 1-4

The market spent much of the week in a lull as investors waited for earnings season to begin. Wall Street is paying close attention to both guidance and profit margins.

 

Big Banks Post Solid Results

Friday, Wells Fargo and JPMorgan Chase both reported Q1 profit growth, and JPMorgan Chase announced record revenue. 5

This was welcomed news. Analysts have tempered some of their expectations entering this earnings season, recognizing that slowing global growth, tariffs, and dollar strength may be affecting corporate profits. (The dollar rallied 6.2% in Q1.) 6

[Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities.]   

Inflation Picks Up

The Consumer Price Index rose 0.4% in March, the most in 14 months. This matched the consensus forecast of economists polled by MarketWatch, who believed rising gas prices would affect the number.

Even with this March jump, annual inflation remained relatively tame at 1.9%. 7

 

What’s Ahead

Note that U.S. stock and bond markets will be closed on Good Friday (April 19).

TIP OF THE WEEK

Life insurance is not solely for people with spouses and kids. If you are a caregiver to an ill parent, have significant debt, or simply wish to avoid having others pay for your funeral, life insurance coverage could prove very important in the event of your passing.

THE WEEK AHEAD: KEY ECONOMIC DATA

Thursday: March retail sales.

Friday: March housing starts and building permits.

Source: Econoday / MarketWatch Calendar, April 12, 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: Citigroup (C), Goldman Sachs (GS)

Tuesday: Bank of America (BAC), BlackRock (BLK), Comerica (CMA), IBM (IBM), Johnson & Johnson (JNJ), Netflix (NFLX), UnitedHealth Group (UNH)

Wednesday: Abbott Labs (ABT), Alcoa (AA), Bank of New York Mellon (BNY), Morgan Stanley (MS), PepsiCo (PEP), U.S. Bancorp (USB), United Rentals (URI)

Thursday: American Express (AMEX), Honeywell (HON), Manpower (MAN), Philip Morris (PM), Schlumberger (SLB), Travelers Companies (TRV), Union Pacific (UNP).

Source: Morningstar.com, April 12, 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 fly we have to have resistance.”

MAYA LIN

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. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. 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 - quotes.wsj.com/index/SPX [4/12/19] 

2 - quotes.wsj.com/index/DJIA [4/12/19]         

3 - quotes.wsj.com/index/COMP [4/12/19]        

4 - quotes.wsj.com/index/XX/990300/historical-prices [4/12/19]  

5 - cnn.com/2019/04/12/investing/wells-fargo-bank-earnings/index.html [4/12/19]

6 - tinyurl.com/y45wuftu [4/12/19]

7 - marketwatch.com/story/higher-gas-prices-boost-cost-of-living-in-march-but-inflation-still-soft-cpi-shows-2019-04-10 [4/10/19]

CHART CITATIONS:

quotes.wsj.com/index/SPX [4/12/19] 

quotes.wsj.com/index/DJIA [4/12/19]         

quotes.wsj.com/index/COMP [4/12/19]        

quotes.wsj.com/index/XX/990300/historical-prices [4/12/19]

markets.wsj.com [4/12/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [4/12/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [4/12/19]

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Quarterly Economic Update

A review of Q1 2019, Presented by Beacon Financial Group

In this Q1 recap: the Federal Reserve alters its outlook, the truce in the trade dispute holds, the real estate market strengthens, and stocks make an impressive comeback from Q4, even as growth concerns mount.

THE QUARTER IN BRIEF

The strongest first quarter for stocks in 21 years featured all kinds of news. Central banks revised their outlook on monetary policy, seeing less robust economies in 2019. Faint glimmers of progress emerged in the U.S.-China trade dispute. Concerns over near-term corporate earnings and bond yields grew. The possibility of a “hard” Brexit loomed in Europe. The real estate market showed signs of heating up again. As the closing bell rang on the last trading day of March, the Standard and Poor’s 500 notched a 13% gain for the first three months of the year. 1

DOMESTIC ECONOMIC HEALTH

Late last year, the Federal Reserve was forecasting two interest rate hikes for 2019 and maintaining a fairly hawkish outlook. On March 20, the central bank veered away from all that. It cut its 2019 growth forecast for the economy by 0.2% to 2.1%, indicated it would not raise interest rates this year, and projected just one quarter-point hike through 2021. At a press conference immediately after the release of the March policy statement, Fed Chairman Jerome Powell shared his view that the “growth of economic activity has slowed,” but he added that Fed policymakers did not foresee a recession developing. 2

The financial markets reacted swiftly. Demand for longer-term Treasury notes rose. By March 22, the yield on the 10-year Treasury had fallen dramatically, to the point where the yield on the 2-year Treasury exceeded it. (Bond yields fall when bond prices rise.) Economists refer to this as an inverted yield curve. Some economists see an inverted yield curve as a recession signal, while others disagree. The sudden flight to longer-term Treasuries did seem to reflect a lessening of risk appetite among institutional investors. Just six days after the Fed made its pivot, the CMEGroup’s FedWatch Tool, which tracks market expectations about interest rate changes, gave the Fed a 71.7% chance of making an interest rate cut by the end of the year. 3,4

Some of the incoming data during the quarter seemed to correspond with the Fed’s revised assessment of the economy, but some did not. (Some was actually delayed as an effect of the federal government shutdown that carried into late January.)

Inflation pressure eased. In October, the Consumer Price Index showed a 2.5% annualized advance. By February, inflation was running at just 1.5%. 5

Job creation surged, then fell off. There were 311,000 net new jobs in January, but just 20,000 in February. From January to February, though, the unemployment rate declined from 4.0% to 3.8%, and the broader U-6 rate, encompassing the underemployed, dropped from 8.1% to 7.3%. (The federal government shutdown may have affected some of the above numbers.) 6  

The quarter also ended with the Bureau of Economic Analysis downgrading fourth-quarter gross domestic product (GDP). The prior estimate was 2.6%; the revised estimate was 2.2%. 7

One important consumer confidence gauge rose and fell during the quarter: the Conference Board’s index declined sharply to 124.1 in March, after hitting a 3-month peak of 131.4 in February. The University of Michigan’s consumer sentiment index performed better: it started the quarter with a drop of 7.1 points in January, but by late March, it was at 98.4, a tenth of a point above where it was in December. 8,9

The Institute for Supply Management’s monthly purchasing manager index, following manufacturing activity, was nowhere near 60 (a level it reached last summer), but remained well above 50 (the mark delineating sector expansion from industry contraction). ISM’s manufacturing PMI was at 56.6 in January, 54.2 in February, and 55.3 in March. 10

GLOBAL ECONOMIC HEALTH

Financial markets worldwide breathed a collective sigh of relief as the trade dispute between the U.S. and China eased. Negotiations between the two nations continued during the quarter, but no deal emerged. While some trade analysts see an agreement being reached in the second quarter, there are doubts that such an accord will resolve the issue at the center of the tariff fight – the concern that Chinese firms are using their technologies to steal U.S. intellectual property. In March, President Trump said that he would prefer leaving 25% tariffs on $50 billion of Chinese products in place, even if a new trade deal was forged. 11

The quarter ended without a Brexit or even an accepted Brexit path – with the United Kingdom facing a potentially unpleasant outcome. The revised Brexit deal, which Prime Minister Theresa May brought to Parliament, was rejected for a third time in late March, raising the possibility of the U.K. leaving the European Union on April 12 without any kind of defined trade agreement. The European Central Bank surprised financial markets in early March with a decision to revive some of the economic stimulus measures it had recently ended, and it also indicated that would leave interest rates unchanged until at least 2020. The latest forecast from the Organization for Economic Cooperation and Development (OECD) projects only 1% growth for the eurozone this year and less than that for the economies of Germany, Japan, and the United Kingdom. 12,13

WORLD MARKETS

The S&P 500 was just one of many equity benchmarks advancing double digits in the first quarter. In fact, nearly every foreign stock index posted a quarterly gain of some kind. China’s Shanghai Composite surged 26.77%; Italy’s FTSE MIB, 16.17%; Hong Kong’s Hang Seng, 14.41%; France’s CAC 40, 13.10%; all outperformed the S&P for Q1. Other notable gains: Canada’s TSX Composite, 12.42%; Euro Stoxx 50, 11.66%; Germany’s DAX, 9.16%; Brazil’s Bovespa, 8.56%; the United Kingdom’s FTSE 100, 8.19%; India’s BSE Sensex, 8.11%; Japan’s Nikkei 225, 7.56%; South Korea’s KOSPI, 6.19%. MCSI’s World index rose 11.88% in the quarter; MSCI’s Emerging Markets index, 9.56%. 14,15

COMMODITIES MARKETS

Oil outgained all other major commodities during the quarter. The value of West Texas Intermediate crude rose 29.98% on the New York Mercantile Exchange (NYMEX), taking the per-barrel price to $60.18 at the March 29 close. Other major Q1 advances: unleaded gasoline, 25.52%; palladium, 14.98%; copper, 9.29%; platinum, 6.59%; lumber, 6.07%; cotton, 5.61%. The significant retreats: natural gas, 4.21%; cocoa, 6.44%; corn, 6.98%; coffee, 9.22%; wheat, 11.76%. Gold gained but 0.29% for the quarter, while silver lost 2.65%. On the NYMEX Commodity Exchange, gold was worth $1,290.80 per ounce at the close on March 29; silver, $15.10 per ounce. The U.S. Dollar Index closed out Q1 1.27% higher at 97.20. 16,17

REAL ESTATE

Is a buyer’s market returning? As the quarter ended, some real estate industry journalists and analysts wondered if that was the case. Existing home sales surged 11.8% in February, according to the National Association of Realtors. That was the largest monthly gain seen since December 2015. While residential resales were still down 1.8%, year-over-year, this latest NAR report was certainly encouraging. NAR chief economist Lawrence Yun cited “lower mortgage rates, more inventory, rising income, and higher consumer confidence” as contributing factors in the increase. Additionally, the Census Bureau said that the pace of new home buying improved 4.9% during February; economists surveyed by Reuters had forecast a 1.3% advance. 18,19

As Yun noted, cheaper home loans factored in to all this. The decline in longer-term Treasury yields influenced mortgage rates. By the last week of March, a 30-year, fixed-rate mortgage was carrying an average interest rate of just 4.06%, according to the calculations of mortgage buyer Freddie Mac. Compare that with 4.95% as recently as November. (The 15-year, fixed-rate mortgage carried an average interest rate of just 3.57% as March ended.) 20

In February, the median sale price of an existing home was $249,500, representing a year-over-year increase of 3.6%. The median new home purchase price was $315,300, and that was down 3.6% from a year earlier. 18,19

TIP OF THE QUARTER

Retirees aiming to increase their income over time should not overlook the potential of dividend-paying stocks.

LOOKING BACK, LOOKING FORWARD

The major U.S. equity benchmarks recorded great gains in the quarter. The closing settlements on the last trading day of Q1: Dow Jones Industrial Average, 25,928.68; S&P 500, 2,834.40; Nasdaq Composite, 7,729.32. The S&P Smallcap 600 ended the quarter at 939.30, advancing 11.17%. 21

Just as the bulls seemed beaten down, they came running right back. After diving nearly 14% in the last three months of 2018, the S&P 500 rebounded more than 13% in the opening quarter of 2019. While consumer spending is still strong, many analysts still see slightly less economic growth this year (between 2%-2.5%). Stock market analytics firm FactSet is now projecting 4% profit growth for S&P 500 firms in 2019; when 2018 ended, the projection was near 10%. Economies in Europe and China appear to be less robust, and that could put a drag on the revenue of S&P 500 companies, 40% of which comes from outside the U.S. An abrupt April Brexit could also be a negative for global equity markets. The financial markets showed great resilience in Q1, forcing some financial firms to reconsider their full-year outlook. 1

QUOTE OF THE QUARTER

“The secret of joy in work is contained in one word – excellence. To know how to do something well is to enjoy it.”

PEARL BUCK

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, or expenses. Investors cannot invest directly in indices. 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 - tinyurl.com/y23en223/ [3/29/19]

2 - cbsnews.com/news/fed-rate-hikes-none-in-2019-federal-reserve-projects-no-rate-hikes-slower-growth-this-year/ [3/20/19]

3 - bloomberg.com/news/articles/2019-03-22/u-s-treasury-yield-curve-inverts-for-first-time-since-2007 [3/22/19]

4 - investors.com/market-trend/stock-market-today/dow-jones-futures-fed-rate-cut-odds-inverted-yield-curve/ [3/26/19]

5 - ycharts.com/indicators/us_inflation_rate [4/1/19]

6 - investing.com/economic-calendar/ [3/31/19]

7 - marketwatch.com/tools/calendars/economic [3/29/19]

8 - investing.com/economic-calendar/cb-consumer-confidence-48 [3/31/19]

9 - tradingeconomics.com/united-states/consumer-confidence [3/31/19]

10 - instituteforsupplymanagement.org/ISMReport/MfgROB.cfm [4/1/19]

11 - pbs.org/newshour/economy/new-round-of-u-s-china-trade-talks-set-to-begin-in-beijing [3/28/19]

12 - cnbc.com/2019/03/29/brexit-general-election-speculation-grows-after-may-loses-vote.html [3/29/19]

13 - nytimes.com/2019/03/07/business/ecb-european-economy-stimulus.html [3/7/19]

14 - investing.com/indices/major-indices [3/31/19]

15 - msci.com/end-of-day-data-search [3/29/19]

16 - barchart.com/futures/performance-leaders?viewName=chart&timeFrame=3m [3/31/19]

17 - money.cnn.com/data/commodities/ [3/29/19]

18 - nar.realtor/newsroom/existing-home-sales-surge-11-8-percent-in-february [3/22/19]

19 - cnbc.com/2019/03/29/new-home-sales-february.html [3/29/19]

20 - tinyurl.com/y27puujx [3/29/19]

21 - barchart.com/stocks/indices?viewName=performance [3/29/19]

22 - barchart.com/stocks/indices?viewName=performance [1/1/19]

23 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [3/29/19]

 



Weekly Economic Update

Presented by Beacon Financial Group

In this week’s recap: stocks close out a great quarter, mortgage rates decline, and Wall Street awaits a wave of IPO action.

THE WEEK ON WALL STREET

Stocks ended last week higher as volatility slowed, completing their best quarter since 2009. A Friday tweet from Secretary of the Treasury Steven Mnuchin encouraged investors, referring to “constructive” discussions in the ongoing U.S.-China trade negotiations. 1

The S&P 500 gained 1.27% for the week. The Dow Industrials and Nasdaq Composite both exceeded that advance: the Dow rose 1.60%; the Nasdaq, 1.42%. 2-4

Foreign shares went the other way. The MSCI EAFE index following international stocks retreated 0.91%. 5

2019 Could Be a Big Year for IPOs

One of the ride-share pioneers, Lyft, closed on its initial public offering (IPO) on Friday, and a glance at the IPO calendar shows that as many as 226 companies could soon go public, with Uber and Airbnb possibly among them. 6

This IPO wave may be a signal of a market top, or it may point to a comeback for risk appetite, which could be healthy for the overall market.

Should some big-name IPOs stumble, it may deter others from moving ahead, which may influence the market psychology. Conversely, an enthusiastic reception may help support further market advances.

[Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities.]   

Good News for the Housing Market

The Fed’s dovish tone has also influenced home loan rates. Freddie Mac’s latest Primary Mortgage Market Survey shows an average interest rate of just 4.06% on a 30-year, fixed rate mortgage, compared with 4.28% a week earlier and 4.95% in December. 7

This news is especially significant given the recent pickup in existing home sales. They jumped 11.8% in February, the biggest monthly gain in more than three years. 8

[A 30-year, fixed rate mortgage is a conventional home loan meeting the lending requirements of Fannie Mae and Freddie Mac, but it is not a mortgage 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.]

 

TAX TIP

The federal income tax filing deadline is Monday, April 15. However, residents of Maine and Massachusetts have until Wednesday, April 17 to file their 2018 tax return. April 15 is Patriots' Day, and April 16 is Emancipation Day. 9

TIP OF THE WEEK

Good debt (a home loan, a student loan) should be distinguished from bad debt (such as credit card debt with a high-interest rate). Strive to pay off bad debt as quickly as you can, and remember that much of it may be linked to purchases that reflect wants rather than needs.

THE WEEK AHEAD: KEY ECONOMIC DATA

Monday: February retail sales.

Wednesday: ADP’s snapshot of March private sector hiring.

Friday: The Department of Labor’s March jobs report.

Source: Econoday / MarketWatch Calendar, March 29, 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: GameStop (GME), Walgreens Boots Alliance (WBA)

Thursday: Constellation Brands (STZ)

Source: Morningstar.com, March 29, 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

“No pessimist ever discovered the secrets of the stars, or sailed to uncharted land, or opened a new doorway for the human spirit.”

HELEN KELLER

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 - marketwatch.com/story/stocks-end-higher-sp-records-strongest-quarter-in-a-decade-2019-03-29 [3/29/19]

2 - quotes.wsj.com/index/SPX [3/29/19] 

3 - quotes.wsj.com/index/DJIA [3/29/19]         

4 - quotes.wsj.com/index/COMP [3/29/19]        

5 - quotes.wsj.com/index/XX/990300/historical-prices [3/29/19]

6 - cnbc.com/2019/02/04/a-giant-ipo-wave-is-coming-as-unicorns-whet-investor-appetite.html [2/4/19]

7 - startribune.com/us-mortgage-rates-post-biggest-drop-in-decade-to-4-06-pct/507781302/ [3/29/19]

8 - nar.realtor/newsroom/existing-home-sales-surge-11-8-percent-in-february [3/22/19]

 

9 - efile.com/tax-day-deadlines/ [3/21/19]

CHART CITATIONS.

 

quotes.wsj.com/index/SPX [3/29/19]   

quotes.wsj.com/index/DJIA [3/29/19]         

quotes.wsj.com/index/COMP [3/29/19]        

quotes.wsj.com/index/XX/990300/historical-prices [3/29/19]

markets.wsj.com [3/29/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [3/29/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [3/29/19]

Weekly Economic Update

Presented by Beacon Financial Group

In this week’s recap: the “yield curve” inverts for the first time this decade, the Federal Reserve adjusts its stance on interest rates, and the price of oil climbs.

THE WEEK ON WALL STREET

Friday, the yield of the 3-month Treasury bill exceeded the yield of the 10-year Treasury note for the first time in 12 years. For some analysts, this “inverted yield curve” may imply a short-term lessening of confidence. (Treasury yields move inversely to Treasury prices.) 1

As a result, the S&P 500 ended the week 0.94% lower. The Nasdaq Composite fell 0.80%, and the Dow Industrials lost 1.19%. 2,3,4

In contrast, the MSCI EAFE index following international stocks rose, gaining 0.52% for the week. 5

FED SEES NO HIKES IN 2019

On Wednesday, the Federal Reserve held interest rates steady, but lowered its estimate of 2019 economic growth to 2.1%.

Last December, the central bank forecast two rate hikes in 2019. It now expects to leave rates unchanged this year, with one quarter-point hike projected for 2020.

This pivot may acknowledge a slight change in economic conditions. The Fed’s latest policy statement noted that the “growth of economic activity has slowed from its solid rate in the fourth quarter.” 6   

OIL HOVERS NEAR $60

At Friday’s closing bell, a barrel of West Texas Intermediate (NYMEX) crude oil was valued at $58.85 on the New York Mercantile Exchange (NYMEX). Its value briefly climbed to $60 earlier in the week.

Month-over-month, the price of WTI crude has risen nearly 5%. Historically, higher oil prices can have a significant impact on retail gasoline prices. 7

WHAT’s NEXT

A U.S. delegation is scheduled to accompany Secretary of the Treasury Steven Mnuchin to China this week for further trade negotiations. Finally, Brexit will not occur this Friday, as the European Union has extended the United Kingdom’s deadline in response to Prime Minister Theresa May’s request. 8,9

T I P  O F  T H E  W E E K

When a baby comes along, it can be hard to stick to a household budget. Rather than struggle to meet old goals, adjust the budget in light of new realities. Refrain from abandoning budgeting in the wake of the change.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: The Conference Board’s latest reading on consumer confidence.

Thursday: February pending home sales, and the federal government’s second estimate of fourth-quarter Gross Domestic Product (GDP).

Friday: Reports on consumer spending and new home sales, and March’s final University of Michigan consumer sentiment index, another measure of consumer confidence levels.

Source: Econoday / MarketWatch Calendar, March 22, 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: Winnebago (WGO)

Tuesday: KB Home (KBH)

Wednesday: Lennar (LEN), Lululemon Athletica (LULU), Paychex (PAYX)

Thursday: Accenture (ACN)

Friday: Blackberry (BB), CarMax (KMX)

Source: Morningstar.com, March 22, 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.

Q U O T E  O F  T H E  W E E K

“Life engenders life. Energy creates energy. It is by spending oneself that one becomes rich.”

SARAH BERNHARDT

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 - bloomberg.com/news/articles/2019-03-22/u-s-treasury-yield-curve-inverts-for-first-time-since-2007 [3/22/19]

2 - quotes.wsj.com/index/SPX [3/22/19] 

3 - quotes.wsj.com/index/DJIA [3/22/19]         

4 - quotes.wsj.com/index/NASDAQ [3/22/19]        

5 - quotes.wsj.com/index/XX/990300/historical-prices [3/22/19]

6 - cbsnews.com/news/fed-rate-hikes-none-in-2019-federal-reserve-projects-no-rate-hikes-slower-growth-this-year/ [3/20/19]

7 - money.cnn.com/data/commodities/ [3/22/19]

8 - cnbc.com/2019/03/20/trump-says-china-tariffs-could-stay-in-place-amid-trade-deal-talks.html [3/20/19]

9 - nytimes.com/2019/03/21/world/europe/brexit-extension-eu-uk.html [3/21/19]

 

CHART CITATIONS.

 

quotes.wsj.com/index/SPX [3/22/19]     

quotes.wsj.com/index/DJIA [3/22/19]         

quotes.wsj.com/index/NASDAQ [3/22/19]        

quotes.wsj.com/index/XX/990300/historical-prices [3/22/19]

markets.wsj.com [3/22/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [3/22/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [3/22/19]

 

Weekly Economic Update

Presented by Beacon Financial Group

In this week’s recap: the Dow, S&P, and Nasdaq all advance more than 2% in five trading sessions, while investors review tame inflation data and wait for further news in U.S.-China trade negotiations.

THE WEEK ON WALL STREET

The big story last week was the sudden grounding of Boeing 737 Max 8 and 9 passenger jets in dozens of countries. The financial effects of this ban could potentially impact the airline industry and segments of the economy for months. 1

While the news created a headwind for the Dow Industrials, stocks managed to post solid gains for the week. The Nasdaq Composite rose 3.12%; the S&P 500, 2.46%; the Dow, 2.25%. 2,3,4

Bullish sentiment was also evident overseas. Looking at the MSCI EAFE index, international stocks advanced 1.93%. 5

Any companies mentioned are for illustrative 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.

TRADE MEETING DELAYED

Wall Street expected President Trump and Chinese President Xi to discuss trade issues this month. Thursday, Bloomberg reported that their talk had been postponed, with no firm date ahead. 6   

MUTED INFLATION

The latest Consumer Price Index showed just a 1.5% rise in overall consumer costs in the year ending in February.

This number does not suggest an overheating economy. During a 60 Minutes interview last week, Federal Reserve Chairman Jerome Powell said the central bank did “not feel any hurry” to make a rate move.

TAX TIP

If you turned 70½ last year, April 1 is your final deadline to receive your initial Required Minimum Distribution (RMD) from a traditional IRA, SEP-IRA, SIMPLE IRA, or employer-sponsored retirement plan. If you take your initial RMD from these retirement accounts this year, you must receive your second RMD from them by December 31, 2019. 8

Withdrawals from traditional IRAs, SEP-IRAs, and SIMPLE IRAs are taxed as ordinary income and, if taken before age 59 1/2, may be subject to a 10% federal income tax penalty. Generally, once you reach age 70 ½, you must begin taking required minimum distributions from these plans. 7

T I P   O F   T H E   W E E K

If it seems you will retire before you are eligible for Medicare, be sure to make the most of your employee health benefits. Schedule doctor, optometrist, and dentist check-ups as well as any major procedures needed. Paying for this health care out of pocket could be hugely expensive, and the premiums for private insurance could be costly.

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: The Federal Reserve wraps up its two-day policy meeting.

Friday: February existing home sales.

Source: Econoday / MarketWatch Calendar, March 15, 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: FedEx (FDX), Michaels Companies (MIK)

Wednesday: General Mills (GIS), Micron Technology (MU)

Thursday: ConAgra Brands (CAG), Darden Restaurants (DRI), Nike (NKE)

Source: Morningstar.com, March 15, 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.

Q U O T E  O F  T H E  W E E K

“Committing a great truth to memory is admirable; committing it to life is wisdom.”

WILLIAM ARTHUR WARD

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/2019/03/13/boeing-shares-fall-after-report-says-us-expected-to-ground-737-max-fleet.html [3/13/19]

2 - quotes.wsj.com/index/SPX [3/15/19] 

3 - quotes.wsj.com/index/DJIA [3/15/19]         

4 - quotes.wsj.com/index/NASDAQ [3/15/19]        

5 - quotes.wsj.com/index/XX/990300/historical-prices [3/15/19]

6 - bloomberg.com/news/articles/2019-03-14/china-u-s-said-to-push-back-trump-xi-meeting-to-at-least-april [3/14/19]  

7 - reuters.com/article/us-usa-economy-inflation-idUSKBN1QT1MF [3/12/19]

8 - irs.gov/newsroom/tax-time-guide-seniors-who-turned-70-and-a-half-last-year-must-start-receiving-retirement-plan-payments-by-april-1 [3/5/19]

 

CHART CITATIONS:

quotes.wsj.com/index/SPX [3/15/19] 

quotes.wsj.com/index/DJIA [3/15/19]         

quotes.wsj.com/index/NASDAQ [3/15/19]        

quotes.wsj.com/index/XX/990300/historical-prices [3/15/19] 

markets.wsj.com [3/15/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield [3/8/19]

 

treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [3/8/19]

Monthly Economic Update for January 2019

Presented by Beacon Financial Group

In this month’s recap: equities rally here and around the world, economic fundamentals look solid, the pace of home sales slows, and oil surges.

THE MONTH IN BRIEF

During a month marked by political impasses in the United States and United Kingdom, equities performed well around most of the world. On Wall Street, the S&P 500 advanced 7.87% in January, with a new earnings season as well as trade and monetary policy developments providing tailwinds. Most of the economic data that rolled in was good; the partial federal government shutdown may have negatively impacted some of the numbers. Home sales fell off abruptly. Many commodities advanced. All in all, investors focused on the potential of the markets more than disputes. 1

DOMESTIC ECONOMIC HEALTH

The Congressional Budget Office believes that the 35-day federal government shutdown cost the economy about $11 billion. The silver lining is that roughly $8 billion of that loss is potentially recoverable, presuming federal spending and consumer spending bounce back in the coming months. 2

Due to the length and breadth of the shutdown, a few key economic reports did not appear last month. Nevertheless, there were plenty of attention-getting news items.

As expected, the Federal Reserve left interest rates alone in January. What really intrigued investors was the dovish tone of the Fed’s latest policy statement. It noted that the Federal Open Market Committee would be “patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate” for the economy. The central bank appeared newly cautious: language implying that rate hikes might be merited was now absent. 3

In mid-January, China made a move in the U.S.-China trade dispute. It offered a plan to address the U.S. trade deficit, with an objective of cutting it to $0 by 2024. China would undertake a strategy to buy greater amounts of American goods: $45 billion more during 2019, and gradually, more in each of the following five years, with the multiyear increase reaching $1 trillion. Bloomberg News reported that U.S. negotiators wanted China to try and wipe out the trade imbalance within two years, not six. American demand for Chinese-made products is so strong, however, that making any real dent in the trade deficit might be a tall order, given current free market conditions. 4

Main Street seemed a bit unsettled by the shutdown and recent stock market volatility. The most respected U.S. monthly consumer confidence gauge, maintained by the Conference Board, fell sharply in January to 120.2, a good reading that still represented its lowest level since July 2017. Its future expectations sub-index hit a 27-month low. At mid-month, the University of Michigan’s consumer sentiment index slipped from its final December mark of 98.3 to 90.7. 5,6

The Institute for Supply Management’s twin purchasing manager indices also fell; those numbers exclusively concerned December. In the last month of 2018, ISM’s manufacturing sector index slipped 5.2 points to 54.1; its services sector PMI declined 3.1 points to 57.6. Both readings indicated solid sector expansion, just to a lesser degree than a month before. 7

One word summed up the latest jobs report from the Department of Labor: fantastic. In December, employers added 312,000 net new workers to their payrolls. The main unemployment rate rose 0.2% to 3.9%, but that was an effect of more Americans looking for work. The U-6 rate, counting both the unemployed and underemployed, held at 7.6%. Wages were up 3.2% year-over-year, the best annual advance in a decade. 8

The Consumer Price Index retreated 0.1% during December after a flat November; the core CPI rose 0.2% in the final month of 2018, replicating its November move. December also brought a slight slip for both the headline (0.2%) and core (0.1%) Producer Price Index. 6

As January drew to a close, some significant data was still pending: the first estimate of Q4 Gross Domestic Product (GDP), plus the latest reports on personal spending as well as income and durable goods orders. This backlogged data could appear in the first half of this month.

GLOBAL ECONOMIC HEALTH

Would the Brexit be delayed? After the crushing 230-vote defeat of Prime Minister Theresa May’s withdrawal deal in Parliament, the United Kingdom faced six possible options: an extension of the March 29 Brexit deadline set by the European Union, a renegotiation of May’s withdrawal deal, a general election that could bring about a change in U.K. leadership, a “hard” Brexit with no trade agreements with the E.U., another national vote on the matter, or no Brexit at all with the U.K. staying in the E.U. As January ended, May faced a February 13 deadline to return to Parliament with either an altered deal or a statement of which other course of action she wanted the U.K. to pursue. While European Council President Donald Tusk tweeted that the Brexit agreement was “not open for renegotiation,” U.K. Foreign Secretary Jeremy Hunt said that a delayed Brexit could be in order. One key sticking point has been the flow of trade between Ireland and Northern Ireland, which could be disturbed if Northern Ireland leaves the E.U. 9,10

China’s factory sector shrunk for a second straight month in January; the reading on the nation’s official manufacturing PMI improved 0.2 points to 49.5. The Chinese economy grew 6.6% in 2018 – a striking advance by global standards, but its smallest expansion since 1990. The effect of that slowdown was being felt in America (where major tech and heavy equipment firms reported declining sales in China) and in Japan, South Korea, and Australia, three of its other major trading partners. (Tariffs on a variety of Chinese imports to the U.S. are slated to rise from 10% to 25% before the end of the first quarter.) 11,12

WORLD MARKETS

Investors felt bullish around the world last month, and the performance numbers of major equity benchmarks reflected their optimism. Europe saw broad gains: Russia’s MICEX improved 6.41% in January; Spain’s IBEX 35, 6.05%; the FTSE Eurofirst 300, 5.99%; Germany’s DAX, 5.82%; France’s CAC 40, 5.54%. Even in London, the FTSE 100 gained 3.58%. 13

Indices in the Asia-Pacific region, Canada, and South America recorded even larger monthly jumps. Canada’s TSX Composite outperformed the Dow and S&P 500, surging 8.50%. The MSCI Emerging Markets index climbed 8.71% for the month, and MSCI’s World index added 7.68%. Look what two South American benchmarks did: Brazil’s Bovespa soared 11.14%, and Argentina’s Merval, 18.97%. Mexico’s Bolsa posted a monthly advance of 5.64%. Hong Kong’s Hang Seng and South Korea’s Kospi set the pace in the east, with respective gains of 8.11% and 8.03%. Australia’s All Ordinaries rose 3.99%; China’s Shanghai Composite, 3.96%; Japan’s Nikkei 225, 3.79%. The only notable retreats were minor: India’s Nifty 50 lost 0.29%; Malaysia’s KLSE Composite, 0.42%. 13,14

COMMODITIES MARKETS

Oil got off to a great start for 2019. By the closing bell on January 31, a barrel of WTI crude was worth $54.04 on the NYMEX, after a 17.94% YTD gain. While natural gas futures lost 4.53% last month, unleaded gasoline improved 4.94%, and heating oil soared 11.71%. 15

Among the softs, while cocoa took a 10.50% drop, other major crops rose. Sugar gained 4.16%; soybeans, 3.83%; cotton, 2.99%; wheat, 2.68%; corn, 0.47%; coffee, 0.34%. Copper led the key metals, rising 5.75%. Platinum advanced 4.35%, and silver and gold respectively added 4.05% and 3.03%. Gold ended the month at $1,319.50 on the COMEX; silver, at $16.06. The U.S. Dollar Index lost 0.80% in January. 15,16

REAL ESTATE

First, the good news. January brought a significant dip in mortgage rates. In Freddie Mac’s last Primary Mortgage Market Survey of 2018 (December 27), a conventional home loan carried 4.55% interest on average. By January 31, that average interest rate had declined to 4.46%. The trend carried over to 15-year, fixed rate loans (4.01% to 3.89%) and 5/1-year, adjustable loans (4.00% to 3.96%). 17,18

Additionally, delayed new home sales data from the Census Bureau showed a 17.0% jump in November to an 8-month high. (The Bureau’s report on January housing starts is still pending as a result of the shutdown.) 19

Now, the bad news: existing home sales slowed. The National Association of Realtors announced that resales were down 6.4% month-over-month in December, after improving 2.1% in November. In 2018, existing home sales lagged 3.1% behind their 2017 pace; last year was the poorest year for home buying since 2015. 6,20

In other real estate news, the 20-city composite S&P CoreLogic Case-Shiller home price index showed 4.7% annual appreciation in its latest edition (November), which was the slimmest gain in almost four years. The yearly advance had been 5.0% a month earlier. The NAR’s pending home sales index, which measures monthly housing contract activity, fell 2.2% to 99.0 in December; that was its worst reading since April 2014. 5,20

T I P O F T H E M O N T H

Recent college graduates are certainly challenged to save for the future, what with student loans, rent, and entry-level jobs. It can be tough to set anything aside. Still, saving and investing something is better than nothing, and the effort must be made. Given the power of compounding over time, starting early is smart.

LOOKING BACK, LOOKING FORWARD

Equities got off to a flying start this year. While the big three all gained 7% or better last month, the small caps outran those bullish starts: the Russell 2000 soared 11.19% in January. At the closing bell on January 31, their settlements were: Dow Industrials, 24,999.67; Nasdaq Composite, 7,281.74; S&P 500, 2,704.10; Russell 2000, 1,499.42. Leading the pack among U.S. benchmarks in terms of monthly performance, the PHLX Oil Service Sector index climbed 19.28%. The CBOE VIX declined 34.82% in January, down to 16.57 at the end of the month. 1

Patient investors sighed with relief at January’s major Wall Street advance. The S&P 500 had not rallied so strongly in January since 1987. It just goes to show that when the bears come out, the bulls are quite capable of coming right back. Going into February, investors have three preoccupations: earnings, the rate of progress in the trade negotiations between the U.S. and China, and the lingering risk of a shutdown in Washington. In the best-case scenario, this month would see a return to business as usual on Wall Street: a leveling out of extreme volatility, a fading memory of December and its anxieties. With luck, maybe we will see that this month instead of a retreat inspired by poor quarterly results or sudden headlines. 23

Q U O T E O F T H E M O N T H

“Cherish all your happy moments: they make a fine cushion for old age.”

CHRISTOPHER MORLEY

UPCOMING RELEASES

What will investors interpret during the rest of 2019’s shortest month? Besides earnings, they will look at the January Consumer Price Index (2/13), the January Producer Price Index (2/14), the preliminary February University of Michigan consumer sentiment index, recent retail sales data, and January industrial output (2/15), minutes from the January Federal Reserve policy meeting as well as new and delayed reports on homebuilding activity (2/20), January existing home sales and leading indicators (2/21), a new Conference Board consumer confidence index, January new home sales, and the December S&P CoreLogic Case-Shiller home price index (2/26), January pending home sales and hard goods orders (2/27), and then, an estimate of Q4 growth (2/28). January personal spending data, the January Personal Consumption Expenditures price index, and the final February University of Michigan consumer sentiment index are slated to appear on March 1.

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 - markets.wsj.com/us [1/31/19]

2 - tinyurl.com/ybuyqd79 [1/28/19]

3 - nbcnews.com/business/economy/federal-reserve-leaves-interest-rate-unchanged-first-meeting-2019-n964726 [1/30/19]

4 - bloomberg.com/news/articles/2019-01-18/china-is-said-to-offer-path-to-eliminate-u-s-trade-imbalance [1/18/19]

5 - reuters.com/article/us-usa-economy/us-consumer-morale-at-one-and-a-half-year-low-house-price-gains-slow-idUSKCN1PN271 [1/29/19]

6 - investing.com/economic-calendar/ [1/31/19]

7 - instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm?SSO=1 [1/7/19]

8 - time.com/5493913/december-jobs-numbers/ [1/4/19]

9 - cnbc.com/2019/01/15/theresa-may-loses-brexit-vote-what-happens-next.html [1/15/19]

10 - apnews.com/dcaa3bafbc474b0ca2f1a2ef43b450fd [1/31/19]

11 - cnbc.com/2019/01/31/china-economy-manufacturing-january-pmi-.html [1/31/19]

12 - hawaiipublicradio.org/post/asia-minute-slowing-chinese-economy-hits-neighboring-countries [1/29/19]

13 - markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [1/31/19]

14 - msci.com/end-of-day-data-search [1/31/19]

15 - money.cnn.com/data/commodities/ [1/31/19]

16 - marketwatch.com/investing/index/dxy/historical [1/31/19]

17 - freddiemac.com/pmms/archive.html [1/31/19]

18 - freddiemac.com/pmms/archive.html?year=2018 [1/31/19]

19 - marketwatch.com/story/new-home-sales-soar-17-in-november-hit-an-8-month-high-2019-01-31 [1/31/19]

20 - tinyurl.com/yd25wvyd [1/30/19]

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

22 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yieldAll [2/1/19]

23 - marketwatch.com/story/what-does-the-stock-markets-monster-january-rally-mean-for-february-2019-01-31 [1/31/19]