Stock Market

The Sequence of Returns

Presented by Beacon Financial Group

A look at how variable rates of return do (and do not) impact investors over time.

What exactly is the “sequence of returns”? The phrase describes the yearly variation in an investment portfolio’s rate of return. Across 20 or 30 years of saving and investing for the future, what kind of impact do these deviations from the average return have on a portfolio’s final value?

 

The answer: no impact at all.

 

Once an investor retires, however, these ups and downs can have an effect on portfolio value – and retirement income.

   

During the accumulation phase, the sequence of returns is ultimately inconsequential. Yearly returns may vary greatly or minimally; in the end, the variance from the mean hardly matters. (Think of “the end” as the moment the investor retires: the time when the emphasis on accumulating assets gives way to the need to withdraw assets.)

 

An analysis from BlackRock bears this out. The asset manager compares three model investing scenarios: three investors start portfolios with lump sums of $1 million, and each of the three portfolios averages a 7% annual return across 25 years. In two of these scenarios, annual returns vary from -7% to +22%. In the third scenario, the return is simply 7% every year. In all three situations, each investor accumulates $5,434,372 after 25 years – because the average annual return is 7% in each case. 1

 

Here is another way to look at it. The average annual return of your portfolio is dynamic; it changes, year-to-year. You have no idea what the average annual return of your portfolio will be when “it is all said and done,” just like a baseball player has no idea what his lifetime batting average will be four seasons into a 13-year playing career. As you save and invest, the sequence of annual portfolio returns influences your average yearly return, but the deviations from the mean will not impact the portfolio’s final value. It will be what it will be. 1

 

When you shift from asset accumulation to asset distribution, the story changes. You must try to protect your invested assets against sequence of returns risk.

 

This is the risk of your retirement coinciding with a bear market (or something close). Even if your portfolio performs well across the duration of your retirement, a bad year or two at the beginning could heighten concerns about outliving your money. 

 

For a classic illustration of the damage done by sequence of returns risk, consider the awful 2007-2009 bear market. Picture a couple at the start of 2008 with a $1 million portfolio, held 60% in equities and 40% in fixed-income investments. They arrange to retire at the end of the year. This will prove a costly decision. The bond market (in shorthand, the S&P U.S. Aggregate Bond Index) gains 5.7% in 2008, but the stock market (in shorthand, the S&P 500) dives 37.0%. As a result, their $1 million portfolio declines to $800,800 in just one year. 2

 

If you are about to retire, do not dismiss this risk. If you are far from retirement, keep saving and investing, knowing that the sequence of returns will have its most relevant implications as you make your retirement transition.

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

 

 

    

Citations.

1 - blackrock.com/pt/literature/investor-education/sequence-of-returns-one-pager-va-us.pdf [10/19]

2 - kiplinger.com/article/retirement/T047-C032-S014-is-your-retirement-income-in-peril-of-this-risk.html [7/3/18]

3 - thebalance.com/how-sequence-risk-affects-your-retirement-money-2388672 [2/8/19]

 

 

Weekly Economic Update for September 16, 2019

Presented by Beacon Financial Group


THE WEEK ON WALL STREET

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

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

 

A Delay for Planned October Tariff Hikes

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

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

 

More Risk Appetite

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

 

Inflation Pressure Increases

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

 

WHAT’S NEXT

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


TIP OF THE WEEK


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



THE WEEK AHEAD: KEY ECONOMIC DATA

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

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

Source: Econoday / Federal Reserve, September 13, 2019

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

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Adobe (ADBE), FedEx (FDX)

Wednesday: General Mills (GIS)

Thursday: Darden Restaurants (DRI)

Source: Zacks, September 13, 2019

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


QUOTE OF THE WEEK

“You cannot shake hands with a clenched fist.”

INDIRA GHANDI

Weekly Recap 9-16-2019.png


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

 

CITATIONS:

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

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

3 - wsj.com/market-data [9/13/19]   

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

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

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

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

 

CHART CITATIONS:

wsj.com/market-data [9/13/19]   

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

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

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



Monthly Economic Update for August, 2019

Presented by Beacon Financial Group


THE MONTH IN BRIEF

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


DOMESTIC ECONOMIC HEALTH

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

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

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

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

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

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

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

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

 

GLOBAL ECONOMIC HEALTH

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

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

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

 

WORLD MARKETS

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

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

 

COMMODITIES MARKETS

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

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

 

REAL ESTATE

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

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

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

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


TIP OF THE MONTH

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


LOOKING BACK, LOOKING FORWARD

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

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

Aug 2019 Recap.png

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

QUOTE OF THE MONTH

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

OPRAH WINFREY


UPCOMING RELEASES

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

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

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

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

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

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

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

7 - tinyurl.com/yy9jnbgm [8/9/19]    

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

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

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

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

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

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

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

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

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

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

 

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

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

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

Weekly Economic Update for September 2, 2019

Presented by Beacon Financial Group

THE WEEK ON WALL STREET

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

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

  

Positive News in the Trade Dispute

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

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

  

Mixed Consumer Confidence Signals

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

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

 

WHAT’s NEXT

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

TIP OF THE WEEK

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

THE WEEK AHEAD: KEY ECONOMIC DATA

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

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

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

Source: Econoday / MarketWatch Calendar, August 30, 2019

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

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

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

Thursday: Lululemon Athletica (LULU)

Source: Zacks, August 30, 2019

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

 

QUOTE OF THE WEEK

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

OVID

Weekly Recap.png

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

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

 

CITATIONS:

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

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

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

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

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

 

CHART CITATIONS:

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

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

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

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

 

Weekly Economic Update 8/26/2019

Presented by Beacon Financial Group

THE WEEK ON WALL STREET

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

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

  

Beijing Plans New Tariffs

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

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

 

Powell Reflects at Jackson Hole

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

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

  

Leading Indicators Rise

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

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

 

FINAL THOUGHT

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


TIP OF THE WEEK

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


THE WEEK AHEAD: KEY ECONOMIC DATA

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

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

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

Source: Econoday / MarketWatch Calendar, August 23, 2019

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

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Autodesk (ADSK)

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

Source: Zacks, August 23, 2019

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


QUOTE OF THE WEEK

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

ART BUCHWALD


Weekly Recap.png



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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 [8/23/19]

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

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

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

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

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

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

 

CHART CITATIONS:

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

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

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

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


 

Your Diversified Portfolio vs. the S&P 500

Presented by Beacon Financial Group

How global returns and proper diversification are affecting overall returns.

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

 

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

    

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

   

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

 

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

  

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

   

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

  

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

  

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

 

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

  

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

 

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

     

    

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

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

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

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

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

 

Annotation:

        

Citations.

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

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

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

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

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

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

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

 

Monthly Economic Update July, 2019

Presented by Beacon Financial Group

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

THE MONTH IN BRIEF

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

DOMESTIC ECONOMIC HEALTH

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

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

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

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

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

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

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

 

GLOBAL ECONOMIC HEALTH

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

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

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

 

WORLD MARKETS

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

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

 

COMMODITIES MARKETS

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

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

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

 

REAL ESTATE

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

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

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

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

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

TIP OF THE MONTH

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

LOOKING BACK, LOOKING FORWARD

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

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

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

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

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

QUOTE OF THE MONTH

Be yourself; everyone else is already taken.

OSCAR WILDE

UPCOMING RELEASES

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

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

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

 

CITATIONS:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Weekly Economic Update 7/22/2019

Presented by Beacon Financial Group

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

THE WEEK ON WALL STREET

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

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

 

Households Bought More Last Month

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

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

 

Will Wall Street’s Expectations Be Met?

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

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

 

FINAL THOUGHT

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

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

THE WEEK AHEAD: KEY ECONOMIC DATA

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

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

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

Source: Econoday / MarketWatch Calendar, July 19, 2019

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

 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

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

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

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

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

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

Source: Zacks, July 19, 2019

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

QUOTE OF THE WEEK

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

-Henry Wadsworth Longfellow

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

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

 

CITATIONS:

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

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

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

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

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

 

CHART CITATIONS:

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

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

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

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

 

Diversification, Patience, and Consistency

Presented by Beacon Financial Group

Three important factors when it comes to your financial life.

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

 

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

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

 

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

 

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

 

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

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

 

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

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

Privacy Policy

 

Citations.

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

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.

Privacy Policy

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).

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 - 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 5/13/2019

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

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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 - 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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Do Our Biases Affect Our Financial Choices?

Presented by Beacon Financial Group

Even the most seasoned investors are prone to their influence.

Investors are routinely warned about allowing their emotions to influence their decisions.  They are less routinely cautioned about letting their preconceptions and biases color their financial choices.

 

In a battle between the facts & our preconceptions, our preconceptions may win. If we acknowledge this tendency, we may be able to avoid some unexamined choices when it comes to personal finance; it may actually “pay” us to recognize our biases as we invest. Here are some common examples of bias creeping into our financial lives. 1

  

Valuing outcomes of investment decisions more than the quality of those decisions. An investor thinks, “I got a great return from that decision,” instead of thinking, “that was a good decision because ______.”

 

How many investment decisions do we make that have a predictable outcome? Hardly any. In retrospect, it is all too easy to prize the gain from a decision over the wisdom of the decision, and to, therefore, believe that the decisions with the best outcomes were in fact the best decisions (not necessarily true). 

Valuing facts we “know” & “see” more than “abstract” facts. Information that seems abstract may seem less valid or valuable than information that relates to personal experience. This is true when we consider different types of investments, the state of the markets, and the health of the economy.

 

Valuing the latest information most. In the investment world, the latest news is often more valuable than old news, but when the latest news is consistently good (or consistently bad), memories of previous market climate(s) may become too distant. If we are not careful, our minds may subconsciously dismiss the eventual emergence of the next bear (or bull) market. 

     

Being overconfident. The more experienced we are at investing, the more confidence we have about our investment choices. When the market is going up and a clear majority of our investment choices work out well, this reinforces our confidence, sometimes to a point where we may start to feel we can do little wrong, thanks to the state of the market, our investing acumen, or both. This can be dangerous.

 

The herd mentality. You know how this goes: if everyone is doing something, they must be doing it for sound and logical reasons. The herd mentality is what leads many investors to buy high (and sell low). It can also promote panic selling. Above all, it encourages market timing – and when investors try to time the market, they frequently realize subpar returns.

       

Sometimes, asking ourselves what our certainty is based on and what it reflects about ourselves can be a helpful and informative step. Examining our preconceptions may help us as we invest.

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

 

Citations.

1 - forbes.com/sites/theyec/2018/12/14/three-psychological-biases-that-prevent-effective-financial-management [12/14/18]



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]