Market Brief January 13 2020

Market Brief January 13 2020

Happy Monday to you all! The markets quickly pushed aside the idea of increasing tension between the United States and Iran, as cooler heads prevailed. Global news is now instantly spread and processed by the markets, and being an election year, further geopolitical volatility should be expected. During an address last Wednesday, President Trump gave no signal of further escalation. The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 0.6%, S&P 0.9%, and Nasdaq 1.7%.

The markets shook off the Middle East tensions and lower payroll figure released on Friday, the U.S. economy added 145,000 jobs in December. Despite being weaker than expected, the jobs report extended the streak of gains to 111 months in a row. The decade wrapped up with 10 straight years of job growth as well. Wage inflation reported a 2.9% increase year-over-year, outpacing current inflation levels. Europe economic reports were positive last week. The Eurozone’s December services PMI’s were revised higher and industrial production rose higher.

U.S. inflation, retail, and housing reports fill up the week of economic news. 2019 holiday sales were a record, so the attention is focused on the Retail Sales report released on Thursday.

From the Stock Trader’s Almanac – the first five trading days of the new year were positive, indicating an increased likelihood of an up year for the market. The Santa Claus rally was also positive. Whenever both the Santa Claus rally and first week of trading are positive, the Dow has gained an average 11.5% for the year and rose 80% of the time.

Year-to-date index performance will begin tracking once we have a month under our belt in 2020. The Oklahoma/Ohio State National title was suppose to be tonight! Since we don’t have a dog in the fight, we will take the Tigers to win the championship! And for the sports nuts reading this, I am referring to the Orange and White tigers!

Have a great week!

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Market Brief January 6 2020

Market Brief January 6 2020

Happy First Monday of 2020! 2019 was a great year for returns in the market, and I am certainly looking forward to what this next year brings. Following the down year in 2018, all the indexes finished above 20%. The Dow up 22%, S&P up 29%, and the Nasdaq up 35%. The year never felt that way. Many headlines focused on negative sentiment to the trade war, manufacturing struggles, and the inverted yield curve. Despite these concerns, a strong consumer, low unemployment, and a Fed willing to reduce interest rates pushed markets higher.

As we enter 2020, we are reminded that not only trade war, but real wars can also cause market corrections and possible recessions. This unfolded last week with tension between the U.S. and the Middle East quickly escalating. Other points of caution ahead include the political environment in the U.S., as well as, the U.K. and China, and the impact rising wages for workers will have on corporate earnings. Lastly, the repo market remains a question mark as to how the economy and markets respond to the Feds actions. A similar buying spree pushed markets on a tear in 1999, followed by the dot com bust.

The markets never act as expected. So where danger lies, is typically determined after the fact. I don’t make market predictions, the market will go up or down, and volatility along the way is to be expected. Planning around the timing of market fluctuations is not sound for reaching goals. A comprehensive strategy that offers options, organization, and structure can provide the best chance for accomplishing financial goals. Whatever your goals may be for 2020 and beyond, the most sound advice is to work with someone to help you get there!

Have a great week!

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Market Brief Dec 23 2019

Market Brief Dec 23 2019

Finish strong! The market continues strength into the holiday season and finishing the year with new record highs! The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 1.1%, S&P 1.7%, and Nasdaq 2.2%. The indices reach for record all-time highs as trade sentiment remains positive and economic reports remain strong from both the U.S. and China. Caution of weakness remain with Europe’s slowing economy and domestic manufacturing.

What a year it has been! Coming off a terrible Q4 of 2018, the question was how far or how much more could the market be beaten down. The market took a few more punches the first week of January, then the snap back rally began. Pullbacks came and went in May, August, and September, stirred up by the trade war uncertainty with China, and perceived economic weakness globally. All pullbacks were short lived, following the Fed’s stance of easing rates, which occurred three times in 2019, and the strength of the U.S. consumer. The theme for the year really is the U.S. Not just companies who primarily have revenues in the U.S, but the consumer and U.S. economy as well. Companies with more than 50% of revenues in the U.S. achieved much better earnings reports than companies selling globally. And the U.S. consumer is strong; unemployment is low, wages are rising, and debt delinquencies are low.

So how about them markets?! Year-to-date index performance; Dow up 22.0%, S&P up 28.5%, and Nasdaq up 34.5%. These numbers are great across the board, given recession fears were news headlines the entire year, impeachments news dominated the latter part of the year, and a trade war with China was never meant to end! Excellent match-up on the last MNF game of the season tonight, for entertainment purposes to keep the pick ’em streak alive its the Pack over the Vikings!

Thanks for reading this market brief, have a fun and safe holiday season, see you in 2020!

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Market Brief December 16 2019

Market Brief December 16 2019

The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 0.49%, S&P 0.77%, and Nasdaq 0.93%. The markets continued to march higher following the final Fed meeting of the year and trade optimism heading into the weekend. The Fed closed the final meeting of the year leaving interest rates unchanged due to favorable economic conditions, strong jobs reports, and low inflation. The U.S. and China reached a phase one trade deal on Friday, easing concerns on the tariff war.

The S&P 500 index has now closed higher in 9 of the last 10 weeks. The Fed meeting last Wednesday went pretty much as expected, no surprises. Fed Chairman Jerome Powell made clear that policies would remain accommodating, positive language for stock market bulls. Powell also reiterated that it would take a significant and sustained rise in inflation for the U.S. Central Bank to raise interests rates in the near term.

Economic reports coming out this week include Tuesday’s Housing Starts for November to give a pulse on the housing market. Wednesday will see the mortgage application report, also provide insight to the housing market, as will Thursday’s existing home sales report. And Friday, Q3 GDP numbers and University of Michigan Consumer Sentiment reports are released. Further details on domestic growth and consumer strength.

Year-to-date index performance; Dow up 20.6%, S&P up 26.4%, and Nasdaq up 31.6%. Stay positive, there are good things going on! Jobs and wages are moving up, companies and consumers continue to benefit from tax cuts, consumer balance sheets look healthy, and serious (90+ day) debt delinquencies are down substantially from post-recession highs. We have a good match-up on MNF tonight, for entertainment purposes to keep the pick ’em streak alive its the Saints over the Colts!

Have a great week! Good luck with your last minute holiday shopping 😉

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Market Brief Dec 9 2019

Market Brief Dec 9 2019

It’s that time of year, yes, the Elf on the shelf is watching! Hopefully, he can add some magic fuel to the stock market before year-end! The Dow and Nasdaq indexes fell slightly, 0.13% and 0.10%, while the S&P index finished the week with a small gain of 0.16%. The week started with a slide, and the markets almost fully recovered by the end of the week. Driving the markets higher on Friday was the jobs report that came out, way above estimates for November.

The jobs data dispelled worries about potential trade-war-induced recession. Aiding the jobs report was the return of General Motors strikers, accounting for 46,000 of the 266,000 gain. Furthermore, upward revisions totaled 41,000 for the two previous months. The unemployment rate came in at 3.5%. Before 2019, the last time the unemployment rate was this low was 1969. The ISM Manufacturing index report signaled a reading of 48.1, indicating a 4th month in the contraction phase as trade uncertainty lingers. The ISM non-manufacturing index remained in expansion territory for the 118th consecutive month. Employment wages also grew at 3.1% over the prior year. Black Friday retailers cashed in on the strong employment situation, as online sales jumped 19.6% year-over-year.

Since October 11, when President Trump acknowledged there were some details needed to finalize Phase One of the trade deal to be concluded. The Fed also announced its program to increase liquidity that same day. Since then, the S&P has risen 7%. The response to Sunday’s tariff deadline could pose a volatile week ahead, as markets have been very sensitive to the latest trade news.

Year-to-date index performance; Dow up 20.1%, S&P up 25.5%, and Nasdaq up 30.5%. What else? This year’s Atlantic hurricane season was the 8th most on record since 1851, I should have been in the catastrophic business! The number of banks on the FDIC list of “problem banks” stood at 55 in Q3 2019. For perspective, the post-crisis high was 888 in Q1 2011. The U.S. Agriculture Department has indicated a 33% decline in Christmas tree production, from 30 million in 1977, to 20 million earlier this decade. Fun fact, it takes nearly a decade to grow a 5-to-6 foot tree! That is some tall inventory to keep around. Awful match-up on MNF tonight, for entertainment purposes to keep the pick ’em streak alive its the Eagles over the G-men! The Oklahoma/Ohio State National title collision course that I predicted in October is still possible but I would say unlikely, as LSU is playing the best football out of the final 4.

Have a great week!

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Market Brief November 25 2019

Market Brief November 25 2019

Happy Thanksgiving! A quick market brief for your reading pleasure before you pay the annual homage and devour a bird later in the week! Speaking of turkeys, the market was acting like one last week responding to continued political and trade news. The Dow, S&P, and Nasdaq indexes all finished down last week; Dow down 0.5%, S&P 0.3%, and Nasdaq 0.2%. The indexes briefly touched new highs before retreating by the end of the week. The drop ends the 6 week win streak. Despite concern overseas, notice that the U.S. is not alone in the stock market rally. The Euro Stoxx 50 index is up 19.4% in dollar terms so far this year (as of last Friday close) while Japan’s Nikkei is up 18.2%.

Reaction sentiment indicates there is a stabilization of U.S. manufacturing data, German manufacturing is still in contraction but at a 5-month high, and despite new orders falling, business confidence has turned positive for the first time in 4 months. Housing remains strong. Existing home sales climbed again, home building permits and housing starts posted their best gains in 2019. The building permits surged to the highest levels since August 2007. Overall, easier financial conditions, low unemployment, wage growth, and housing are all supporting the stability of the current economy.

Upcoming week highlights include consumer confidence report on Tuesday, which is expected to rise, and Wednesday’s preliminary Q3 Gross Domestic Product report. Year-to-date index performance; Dow up 19.5%, S&P up 24.1%, and Nasdaq up 28.4%. What else? I feel like a broken record in holiday snowstorms as Colorado is bracing for another storm. So, if you were dreaming of a white Thanksgiving, you might get it this year! Great match-up on MNF tonight, for entertainment purposes to keep the pick ’em streak alive its the high flying Ravens over the Rams!

Safe travels and good times this Thanksgiving week!

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Market Brief Nov 18 2019

Market Brief Nov 18 2019

Not a lot of market and economic changes over the last week. Much of the same continued geo-political and impeachment unrest. The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 1.2%, S&P 0.9%, and Nasdaq 0.8%. The indices reach for record all-time highs. Recent recession concerns have calmed down as trade talks have simmered. Slowdowns from industrial production is drawing the latest concern. However, employment remains strong and the consumer continues to spend. The Friday retail sales data was the latest reading of consumer spending available and showed an October bounce-back after September saw a decline; the first in seven months. 

Industrial production continued to slow in October, as the GM strike dragged on. Manufacturing, excluding autos, had a smaller decline of 0.2% in October. It’s also important to remember that we had a similar slowdown in 2015-16 during the oil price crash, and no recession materialized. Looking ahead to next week, economic data is expected in housing, leading indicators, consumer sentiment and jobs. These are all direct measures of consumer health, which has been the cornerstone of recent market returns. At 3.97%, mortgage delinquencies fell to the lowest level in nearly 25 years, and those in serious delinquency fell to 1.81%, the lowest since Q4 1985! University of Michigan Consumer Sentiment Index showed a small gain over the prior month. It was the third consecutive month of improvement and further indication that the U.S. consumer is on solid footing.

Year-to-date index performance; Dow up 20.1%, S&P up 24.5%, and Nasdaq up 28.7%. What else? Redfin reported that U.S. homeowners are residing in their homes for roughly 13 years, five years longer than the average in 2010, according to The Wall Street Journal. The lack of turnover is contributing to the low inventory levels of homes for sale, now near its lowest point in 37 years, according to CoreLogic Inc. Economists point out that many baby boomers are staying healthier later in life and not downsizing. For entertainment purposes only, we will take the Chiefs over the Chargers in Mexico.

Thanks for reading, have a great week!

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Market Brief Nov 11 2019

Market Brief Nov 11 2019

First off, thank you to all our veterans out there who served us, and our country for all those years.

The markets continue the win streak. All indexes finished up for the week, Dow up 1.2%, S&P up 0.9%, and the Nasdaq up 1.1%. That makes 3 up weeks in a row for the Dow, 5 for the S&P, and 6 for the Nasdaq. Trade optimism, corporate earnings, and economic data continue to support the indices track to all-time highs.

U.S. ISM non-manufacturing exceeded expectation as both new orders and employment jumped noticeably. This report relieved concerns that the manufacturing sector slowdown would ripple into other areas of the economy. Last week there were initially signs of progress with the China/U.S. Phase 1 trade talks. By the end of the week, President Trump indicated possibly being further away than initially perceived from an agreement. The seesaw continues. The preliminary University of Michigan Consumer Sentiment report showed a slight gain over September. If this reading holds, that is 3 months in a row of improved readings, further indicating the strength of the U.S. consumer and financial confidence.

Looking ahead, more of the same headlines loom: trade war, 2020 election, and economic readings this week that include mortgage applications, retail sales, industrial production, and Germany’s Q3 GDP report.

Year-to-date index performance; Dow up 18.7%, S&P up 23.4%, and Nasdaq up 27.7%. What else? According to Generations United, 2.6 million grandparents are the primary caretaker for their grandchildren. Read the headlines with caution, since the last recession, fears of these events were also suppose to lead to another recession: another wave of home foreclosures, a disaster in commercial real estate, the Fiscal Cliff, Greece potentially leaving the Eurozone, German bank defaults, or even the inverted yield curve earlier this year. Historically, stocks have performed well following three successive interest rate cuts (1975, 1996 and 1998). Data from LPL Financial indicates that the S&P 500 Index has risen an average of 10% six months after said rate cuts and 20% a year out, according to MarketWatch. Time will tell how this one plays out! According to Bloomberg, U.S. consumers have worked diligently to get their fiscal houses in order since the 2008-2009 financial crisis. The S&P/Experian Consumer Credit Default Index stood at a reading of 0.93% on 9/30/19, well below its all-time high of 5.51% on 5/31/09 and below its 1.85% average since the inception of the index on 7/31/04. That is more “fiscal” power to the people!

OK sports fans, we have a great match-up on MNF tonight. For entertainment purposes to keep the pick ’em streak alive its the Seahawks on the road over the undefeated 49ers! Bama lost, but I still see them sneaking into the college playoff picture.

Have a great week!

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Market Brief November 4 2019

Financial Advisor Market Brief November 4 2019

We enter the second to last month of 2019 on a positive note. More treats than tricks last week, as all three indices finished positive: the Dow up 1.4%, S&P 1.5%, and Nasdaq 1.7%. The indices reach for record all-time highs, while much of the commentary is pointing to global economic downturn. There are three areas driving the markets higher at this time. First, corporate earnings is underway and majority of the results are much better than expected. Second, economic data continues to be positive. Third, improving trade talks, although this seems to with each passing day. And for a bonus reason, the Fed cut rates last week, as expected.

So why is recession talk a daily headline? The negative headlines focus on trade war uncertainty, global manufacturing slowdown (Germany), and contraction in U.S. manufacturing as areas of concern. And while that may be true, these headlines fail to shine light on the strength of the consumer and low unemployment (September 3.6% reading was a 50-year low). Never has there been a recession with the unemployment rating where it is at today. Icing on the cake is the Fed interest rates at such a low level. In fact, at the end of the last 5 bull markets, the lowest Fed rate was 4.75%, compared with today’s rate range of 1.5-1.75%. Lastly, the jobs report from Friday indicate further job creation in the marketplace, reaffirming the strength of the U.S. labor market.

For now, the Fed stated they will keep rates steady unless prompted by new economic data to take action. Inflation is still top of mind, and the latest quarterly GDP report indicated growth rate of 1.6%. This reading is slightly below the Fed’s annualized growth target of 2.0%.

And with all that said, the Citigroup Market Sentiment indicates a reading closer to market panic (vs euphoria). The week ahead has light economic reports being released. Main focus will be on corporate earnings, global manufacturing data, and Friday’s University of Michigan consumer sentiment report.

Year-to-date index performance; Dow up 17.2%, S&P up 22.3%, and Nasdaq up 26.4%. What else? If you are in the market for a new home, the Hamptons have the largest inventory for sale since 2011, can you say Buyers market! Or if you prefer a parking spot, the most expensive spot just sold in Hong Kong for $969,000 – that’s a lot of dough for 135 sq ft of concrete – maybe it has a beautiful view!?!? Heading to college, be sure to check the price tag! To the surprise of nobody, growth of indirect college costs (tuition less grants and scholarships) from early 1980s to early 2000s has grown 137%, per a St Louis Fed Analyst. Fair to say it has grown another 137% from the early 2000s to now? Not a bad idea to start socking away college tuition dollars if you have rugrats in the house. According to the Bureau of Labor Statistics, less than ⅕ of American full-time workers have access to any paid family leave, although that is up from just 10% as recently as 2010. So, trending in the right direction… but hope you have a nice boss! We do have a great rivalry match-up tonight on MNF, for entertainment purposes to keep the pick ’em streak alive its America’s Team over the G-men! How bout dem Cowboys!

Have a great week!

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Market Brief October 28 2019

Market Brief Oct 28 2019

Happy Halloween! And the markets either have a trick up the sleeve, or a treat for those invested! The Dow, S&P, and Nasdaq indexes all finished up last week Dow up 0.7%, S&P 1.2%, and Nasdaq 1.9%. The indices reach for record all-time highs, while much of the commentary is pointing to global economic downturn. The lesson here is that stocks are acting better in the face of weak economic data, such as the September ISM reading and weak German production. Stock markets are a leading indicator, and economic data reports are looking backwards. So higher prices are factoring in strong earnings, favorable monetary policy, and (current) positive sentiment from the U.S./China trade war.

As of Friday, the federal-funds futures market priced in a 93.5% probability of a quarter-point rate cut. The Fed aims to keep the economy growing, even with a 50-year low unemployment rate of 3.5%. So what’s with the further rate cut? Well, the central bank’s inflation target is 2%, and current growth is below that target. And it is not just the U.S. participating, globally, there have been 40 rate cuts in the past 3 months. Global rates, however, may have reached a floor, as Sweden’s central bank (also the oldest central bank) hinted to a rate increase in December. Time will tell.

And with all that said, the Citigroup Market Sentiment indicates a reading closer to market panic (vs euphoria). Looking at this week (besides Fed meeting on Wednesday), it is a heavy economic reporting week with Consumer data Tuesday, employment on Wednesday, and manufacturing data on Friday.

Year-to-date index performance; Dow up 15.6%, S&P up 20.6%, and the Nasdaq up 24.2%. What else? Colorado was hit with the second snowfall on the Front Range. So, if you were dreaming of a white Halloween, you might get it this year! We don’t have a great match-up on MNF tonight, but for entertainment purposes to keep the pick ’em streak alive, it’s the Steelers over the Fins! World Series prediction was off with America’s pastime, Astros in 5, and the Oklahoma/Ohio State National title collision course doesn’t seem likely after the Sooners lost this weekend.

Have a fun and safe Halloween week! And turn back the clock Saturday night!!

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Market Brief October 21 2019

Market Brief October 21 2019

No trick-or-treat here, just the facts! The Dow fell slightly, down 0.2% on the week, S&P and Nasdaq indexes pulled out small gains of 0.5% and 0.4%. Phase 1 of the U.S./China trade war is receiving mixed reviews, Brexit progress came as a surprise, corporate earnings, and economic data was mixed.

What is Brexit anyway? The long used term for “British exit” means in the current news, an exit from the European Union. The exit could be costly in terms of economic growth, impacting trade among European countries, as well as, approximately 450,000 jobs if the British break away completely. So large ramifications for Europe, worth keeping an eye on. Elsewhere globally, China reported its weakest growth in 30 years.

Corporate earnings season is under way for Q3, as many large companies report this week including Boeing, Microsoft, Amazon, Visa, and Ford to name a few. Earnings tell the story of how companies are doing, compared to where they expected to be. Earnings reports also give a baseline for the bigger picture of the industry, sector, domestic economy, and global demand.

Consumer data remains mixed. The latest retail sales report was below expectations, however, credit card delinquencies remain historically low. Consumer crisis averted? Maybe, time will tell but recent indication points to a more fiscally responsible consumer.

Our week ahead is focused on corporate earnings. Domestic economic data to watch is the U.S. manufacturing report that comes out on Thursday. The Fed Futures decision at the end of the month is also pointing to another rate cut of 0.25%. Year-to-date index performance; Dow up 14.8%, S&P up 19.1%, and Nasdaq up 21.9%.

Weekly Bits… Free water? Not in Switzerland, water prices are about 4 times higher than those in the United States. Flight shaming? The latest change in attitude as environmentalist want everyone to think twice before booking the next flight to support the trend to stop emissions in the atmosphere. Tourism to the U.S. is down because of the strong U.S. dollar compared to foreign currencies, making it more expensive to visit the land of the free. And for Gen Z’s, Chick-fil-A is the #1 teen restaurant, followed by Starbucks. Funniest thing from the sports weekend was Doug Pederson, the confident Philadelphia Eagles coach, saying his team was heading to Dallas to get a win… and proceeded to lose 37-10. For entertainment purposes only, a big rivalry among AFC East teams on MNF, however, the Pats roll and easily beat the Jets. And the Astros win the World Series in 5 games.

Have a great week!

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This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief October 14 2019

Market Brief October 14 2019

Fall is here, so happy fall! Enjoy the sweaters and pumpkin spice latte’s while they last. The markets were happy and stayed green last week. The Dow, S&P, and Nasdaq indexes all finished up last week between 0.6-0.9%, with the focus moving back to interest rates and the U.S./China trade war. The market’s rallied Friday following good news on the trade front. The Dow index and the S&P 500 index both snapped 3-week losing skids.

The positive trade talk was led by President Trump’s remarks “very substantial phase one deal” with China, which includes a suspension of tariffs to take effect on Tuesday. Belief is that progress is a realization that both economies are slowing and would greatly benefit from a de-escalation of trade tension. Good news in the stock market was met by bad news for bonds, as their prices dropped. The drop in prices lifted yields, removing the yield curve inversion and the fear of recession.

Globally, interest rate cuts have helped soften the economic landing. 45 central bank cuts have occurred in the last six months, which should favor economic growth and help avoid a near term recession. Our week ahead is focused on retail sales data and the Home Builders index report for October, both reports released on Wednesday. Year-to-date index performance; Dow up 15.0%, S&P up 18.5%, and Nasdaq up 21.4%.

What else? Given the S&P 500 index growth this year, the index is only up 3.4% since it’s high in January 2018! Interesting – U.S. births hit a 32-year low in 2018; thanks to expensive child rearing costs, improved career opportunities for women, high home prices, and the drain of student loans impacting family finances. For entertainment purposes only, we like Aaron Rodgers and the Packers beating the Lions tonight on MNF!

Have a great week-

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Market Brief October 7, 2019

Market Brief October 7, 2019

The Dow and S&P indexes finished down last week -0.9% and -0.3%, and the Nasdaq posted a gain of 0.5%. The week saw a wild seesaw from global economic woes to jobs and employment data that were better than expected. And then there was the Fed, back in the picture again to provide further stimulus, maybe?

So what happened? The ISM reports early last week indicated a slowdown in business from service and manufacturing industries. This survey is based on business owner sentiment towards sales and jobs, and tipped recession fears to higher levels. The week closed with unemployment rates at 3.5% and jobs increasing 136,000. The jobs figure came below forecast of 150,000, but the market didn’t mind as that 150k figured was recently revised up 45,000 over the last 2 months. Strong jobs and unemployment contradict recession talk. When the recession head peaks, the Fed comes around! And based off the ISM report, odds of a rate cut begin to increase. This news also helped the markets rebound at the end of the week.

That leaves us thinking… the economy is in a good place, just growing at a slower pace. This slowdown has rippled from the Fed rate hike last year and trade talk uncertainty, stymieing businesses from continuing to spend and invest at the previous levels. Fed will continue to monitor inflation and employment. Employment is strong. Inflation is lower than the Fed’s target. The inflation lever will be the one to watch to determine if further stimulus action is needed.

Our week ahead will bring light back to U.S./China talks on Thursday. Consumer sentiment reports will also be released on Friday. Globally, eyes will be on German Industrial Production orders on Tuesday for a pulse on Europe. Year-to-date index performance; Dow up 13.9%, S&P up 17.8%, and Nasdaq up 20.3%.

Have a great week! And for entertainment purposes only tonight, the Brownies and the 49ers – we take the home team and San Fran straight up as the Browns will come come down to earth after a big win in Baltimore last Sunday.

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Market Brief September 30 2019

Market Brief September 30 2019

Out with Saudi oil news and in with the impeachment news to rattle markets. The indexes all finished down last week; Dow down 0.4%, S&P down 1.0%, and Nasdaq down 2.2%. More concerning to the markets than the impeachment talk was the White House considering to delist Chinese companies and limit U.S. investments in China. This morning, the Trump administration denied plans to delist Chinese companies and markets opened positively.

The impeachment talk stalled as Democrats control the House, and Republicans hold then Senate. Therefore, impeachment would unlikely pass the Senate. September’s track record of being the worst month to for stock market returns has not held up in 2019, as through Friday close, the S&P is up approximately 2% for the month.

Global concerns remain as Germany’s September Purchasing Managers index fell from 43.5 in August to 41.4. Below 50 suggests contraction. Germany has strong dependence on the rest of the world to purchase their manufactured goods, and exports continue to decline. The U.S. Core Durable Goods beat expectations and the New Home Sales report smashed expectations, up 18% year-over-year, and low interest rates continue to support U.S. housing.

Our week ahead is focused on U.S. manufacturing data and jobs report. Earnings are light this week and do not get heavy until the middle of October. Year-to-date index performance; Dow up 15.0%, S&P up 18.1%, and Nasdaq up 19.7%.

It’s an ugly MNF match-up tonight with two winless teams in the Steelers and Bengals. For entertainment purposed only, I’ll take the Steelers to get their first win of the season. Funniest thing from the sports weekend was present day Uncle Rico (Napoleon Dynamite) Gardner Minshew (QB for Jacksonville) coming into Denver and stealing a win from the Broncos! Have a great week!

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Market Brief September 23 2019

Market Brief September 23 2019

The Dow, S&P, and Nasdaq indexes all finished slightly down last week between 0.5-1.0%, with the focus remaining on the U.S./China trade war and the geopolitical tensions, with the recent Saudi oil attacks. The market’s fell Friday following China’s cancelled farm visits. The Fed cut rates 0.25%, which led to more confusing sentiment regarding the future rate direction.

Housing activity has improved in 2019, thanks to lower mortgage rates. The NAHB Housing Market Index rose for a third straight month. Builder confidence rises as housing starts have hit a 12 year high. The Fed meeting last week resulted in a dovish stance, lowering rates due to slowing global economy and uncertainty with the U.S.-China trade war. Further rates cuts are not clear at the moment.

Our week ahead is highlighted by U.S. housing data; U.S New Home Sales on Wednesday, U.S. Pending Home Sales and U.S. Existing Home Sales on Thursday. Friday ends the week with U.S. Durable Goods Orders and U.S. Personal Spending reports. Year-to-date index performance; Dow up 15.5%, S&P up 19.4%, and Nasdaq up 22.3%.

The funniest moment from the sports weekend was the defense in the UCLA/Washington St collegiate football game. I don’t think there was a single defensive player dressed Saturday night, as the offenses went wild in a 67-63 shootout win for the Bruins. For entertainment purposes only, we like the Monsters of Midway wreaking havoc in Washington D.C. and easily taking care of the Case Keenum led Redskins. Have a great week!

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This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief September 16 2019

Market Brief September 16 2019

Happy Monday! Touchdowns and cooler temp’s are here, the leaves begin to turn, and chatter of what to wear on Halloween has begun. The markets scored last week, with the Dow, S&P, and Nasdaq indexes all finishing in the green. Trade war optimism and strong consumer reports rallied the markets close to all-time highs. President Trump delayed a China tariff hike until mid-October. All eyes shift to a heavy week of economic data and the 2-day Fed meeting that ends on Wednesday, where the central bank is likely to cut its key interest rate a quarter point.

The Fed meeting will weigh the signs that consumer spending and inflation are healthy, against the slowdown in factory production, lower hiring rates in the private sector, and global economic weakness. A quarter point rate cut will put the Fed’s benchmark rate in the 1.75-2% range. The possibility of further rate cuts is unlikely, but could shift based on dissenting votes from this Fed meeting and how the U.S.-China trade deal evolves.

Retail sales, the core consumer price index and jobless claims all came in stronger than expected. Auto sales also rose 6.8% compared to the previous year. Online and other nonstore sales surged 16%, the best annual gain since December 2000.

This week reports include the Fed’s industrial production report, construction data on new homes and building permits, the Philly Fed’s business index, and a survey of sales of existing homes. Globally, the Bank of Japan, Bank of England, and Swiss National Bank will also be announcing policy decisions. Year-to-date index performance; Dow up 16.7%, S&P up 20.0%, and Nasdaq up 23.2%.

Have a great week! The best thing from the sports weekend was Clemson quarterback Trevor Lawrence digging for gold on national television for a good 10 seconds, haha. And, for entertainment purposes only, the Browns will have no problem taking care of the Jets tonight on MNF!

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This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief September 3 2019

Market Brief September 3 2019

Football is back! Many high school and collegiate teams opened on the holiday weekend. As for the markets, the Dow, S&P, and Nasdaq indexes all rebounded last week finishing up 3%, 2.8%, and 2.7%. The positive week ended a 4-week losing streak, mainly due to trade war optimism. The markets ended the month of August down about 2% across the board.

The consumer continues to show strength in our economy. Personal incomes rose slightly, 0.1%, and consumer spending grew 0.6% over last month. Real consumer spending increased 2.7% year-over-year. Another gauge on the economy, the core PCE deflator report showed inflation increase of 1.6% year-over-year. This is below the Fed’s target inflation rate of 2%, which signals to investors that the outlook will remain soft in terms of the interest rate environment.

Our week ahead is heavy with economic reports. This mornings ISM Manufacturing index reported below expected results of 49.1, prompting growth concerns. The expected reading was 51.3 for the month of August. This report details contracting new orders, production, and employment. This is a 2.1% decrease from July’s reading of 51.2. The August reading calls for a contracting direction, the first such reading over the past 12 months. Despite the ISM manufacturing contraction in August, the overall economy grew for the 124th consecutive month. Year-to-date index performance; Dow up 13.2%, S&P up 16.7%, and Nasdaq up 20.0%.

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This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief August 26 2019

Market Brief August 26 2019

The Dow, S&P, and Nasdaq indexes all finished down last week between 1-1.8%, with the focus remaining on the U.S./China trade war and the yield curve. The market’s fell Friday following President Trump’s response to China’s tariff announcement and the Fed’s lack of aggressive easing. The U.S. consumer continues to show strength, but many see the yield curve inversion as a sign of recession to come.

The Fed meeting last week resulted in a dovish stance, which means the Fed is likely to continue keeping rates low, and potentially lower. Housing numbers for last week were down for July new home sales, following a June increase. And current reports are well below the highs that were seen in the mid-2000’s.

Our week ahead is light leading into the holiday weekend. Volatility is expected to be low, unless further unexpected trade headlines emerge. Tuesday’s Consumer Confidence report is expected to be lower than last month, and Thursday’s U.S. GDP may surprise on the upside given all the recent strong retail sales figures. Year-to-date index performance; Dow up 9.9%, S&P up 13.6%, and Nasdaq up 16.8%.

Have a fun and safe Labor Day weekend!

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This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief August 19 2019

Market Brief August 19 2019

School is back in session and as family routines get back to normal, the markets are anything but! Another week of bullish and bearish volatility led by continued trade war discussion and an inverted yield curve. The Dow finished the week down 1.5%, the S&P down 1.0%, and the Nasdaq down 0.8%. The S&P has not dropped enough to meet the requirement of an intermediate-level correction of 10%. This past weeks low was 6.7% off from the highs.

The events from last week started with President Trump offering temporary reprieve on the new China tariffs on some holiday related items, including cell phones, which was good news for retailers. China retaliated Thursday saying they wanted to meet “half-way”. The Yield Curve inverted on Wednesday, increasing recession fears, and China economic reports were weaker than expected. The week ended positive due to stronger than expected U.S. retail sales.

What is the big deal with the inverted Yield Curve? This occurs when the 10 year yield undercuts the 2 year yield. This occurred for the first time since 2007. The inversion typically signals recession, though not immediately, but months ahead. The inversion was triggered by China’s recent reports of economic weakness, as well as, the economic contraction reports in Germany. The inversion did not last long as it turned positive again after the strong U.S. retail reports, signaling the U.S. consumer is still strong.

GDP is growing at 2%, key word is growing. And corporate earnings are not terrible. Growth has slowed back to trend, and this slowdown is not unlike other similar slowdowns in the past, and does not necessarily lead to recessions. Strong U.S. retail sales in July eased the fears of consumer spending and economic growth, growing at 0.7%. Online and other non-store retail sales rose 16% vs the prior year.

The Fed meets this Friday in Jackson Hole, WY, to address ongoing recession fears as the China/U.S. trade talks continue. Also on the docket is the inverted yield curve and pressure from the President to lower interest rates. This week’s economic data include existing home sales figures and the new homes sales report, which follows 3 straight monthly declines in housing starts. Year-to-date performance for the indexes include Dow up 11%, S&P up 15.2%, and the Nasdaq up 19% as of Friday’s close.

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This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.

Market Brief August 12 2019

Market Brief August 12 2019

The Twitter Policy is in full effect and The Great Uncertainty market continues. Last week, the U.S. administration accused China of manipulating their currency, sending the markets into a volatile frenzy. The markets briefly recovered, before falling again on news that the U.S. will not do business with Huawei. The Dow, S&P, and Nasdaq indexes all finished the week down between 0.5-0.7%.

Trade headlines will dominate the news once again this week. As Q2 earnings season comes to an end, investors will shift focus to economic data. Results from data will be telling as to the strength of the U.S. economy. This week key German and China economic data reports, along with the U.S. CPI report. Lower numbers may result in continued easing of interest rates at the Fed’s next meeting in September. U.S. Retail sales figures also report this week on Thursday, indicating the strength of the consumer, the backbone of the U.S. economy. Friday’s permits and starts data will indicate the strength of current business investment.

Current year-to-date returns for the indexes as of Friday close: Dow up 12.7%, S&P up 16.4%, and the Nasdaq up 20.0%.

Click here if you would like to learn more about your options and if we can assist you with your investment and retirement planning.

This website is for informational purposes only and is not intended to be specific advice or recommendations. For specific advice or recommendations you would need to meet directly with one of our advisers.