Weekly Economic Update for November 19, 2018

In this week’s recap: a bit more inflation pressure, a big fall retail sales gain, another setback for light sweet crude, and a down week on Wall Street.

Weekly Economic Update

 

Presented by JB Beckett, November 19, 2018

 

IN OCTOBER, INFLATION JUMPED THE MOST SINCE JANUARY

The Consumer Price Index rose 0.3% last month, according to the Bureau of Labor Statistics. This was the largest monthly gain for the headline CPI since its 0.5% move in the first month of the year. A 3.0% leap in gasoline prices played a significant role. Core consumer inflation, which does not include volatile food and energy costs, increased by 0.2% in October.

1

     

RETAIL SALES RISE 0.8%

Consumers certainly entered fall in a buying mood. Even with car and truck sales factored out, the gain was still 0.7% in October, and that left overall U.S. retail purchases up 4.6% year-over-year. In September, retail purchases tailed off 0.1% (the Department of Commerce first reported a 0.1% advance).

2

    

WTI CRUDE FALLS INTO A BEAR MARKET

Oil’s fourth-quarter slide continued last week. Friday, light sweet crude ended the week at $56.46 on the New York Mercantile Exchange after its price slid 6.2% across five trading sessions, hitting a 12-month closing low of $55.69 on Tuesday. The commodity is now on a 6-week losing streak.

3

    

MAJOr INDICES RETREAT

Investors were left cold by some of last week’s key earnings reports, and the significant October inflation advance seemed to provide additional substantiation for a year-end Federal Reserve interest rate hike. The S&P 500 lost 1.61% in five days, falling to 2,736.27 at Friday’s closing bell.  It fared better than both the Dow Industrials and Nasdaq Composite; last week, the blue chips slumped 2.22% to 25,413.22, while the tech-heavy benchmark dipped 2.15% to 7,247.87.

4

    

 

T I P   O F   T H E   W E E K

 

Did you know

mortgage rates fluctuate daily

during the week? If you are looking for a home loan, be sure to assess the terms of different loans on the same day. If you finalize negotiations on a loan, ask your lender to lock in the terms.

 

 

THIS WEEK

Agilent Technologies, Intuit, Jack in the Box, and Urban Outfitters present earnings on Monday. | Analog Devices, Barnes & Noble, Best Buy, BJ’s Wholesale Club, Campbell Soup, Foot Locker, Gap, Hormel Foods, Kohl’s, Lowe’s, Medtronic, Ross Stores, Stage Stores, Target, and TJX all announce earnings on Tuesday; in addition, the Census Bureau releases a report on October housing starts. | Wednesday sees the release of the final November University of Michigan consumer sentiment index, the October existing home sales report from the National Association of Realtors, the October leading indicator index from the Conference Board, and a new monthly report on capital goods orders from the Census Bureau. | U.S. financial markets are closed Thursday in observance of Thanksgiving. | Friday, stock and bond markets reopen for a shortened trading session, with no major economic news or earnings announcements scheduled. 

 

 

Q U O T E  O F  T H E  W E E K

 

“We must learn to be

still

in the midst of activity and to be

vibrantly alive

in repose.”

indira gandhi

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

2.81

8.33

11.84

20.72

NASDAQ

4.99

6.69

16.37

38.90

S&P 500

2.34

5.83

10.43

22.16

 

 

 

 

 

REAL YIELD

11/16 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

1.06

0.53

0.53

2.85

 

Sources: wsj.com, bigcharts.com, tre

asury.gov – 11/16/18

4,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

T H E   W E E K L Y   R I D D L E

 

What goes back and forth all the time while keeping time, causing a bit of noise only some of the time

?

 

LAST WEEK’S RIDDLE: A young man runs away from home. Cheered on by onlookers, he makes three lefts, then finds two masked men ahead of him, but he runs toward them. Can you explain why?

ANSWER: He is rounding the bases in a baseball game and heading toward home plate.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

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. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

CITATIONS:

1 – cnbc.com/2018/11/14/us-consumer-price-index-october-2018.html [11/14/18]

2 – investors.com/news/economy/retail-sales-rise-amazon-walmart-ecommerce/ [11/15/18]

3 – marketwatch.com/story/oil-reclaims-more-ground-though-the-sharp-selloff-accounts-for-a-4-weekly-loss-2018-11-16 [11/16/18]

4 – markets.wsj.com/us [11/16/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F16%2F17&x=0&y=0 [11/16/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F16%2F17&x=0&y=0 [11/16/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F16%2F17&x=0&y=0 [11/16/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F15%2F13&x=0&y=0 [11/16/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F15%2F13&x=0&y=0 [11/16/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F15%2F13&x=0&y=0 [11/16/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F17%2F08&x=0&y=0 [11/16/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F17%2F08&x=0&y=0 [11/16/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F17%2F08&x=0&y=0 [11/16/18]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/16/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/16/18]

 

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Your monthly Retirement In Sight newsletter for November, 2018

Beckett Financial Group      825 Meeting Street, West Columbia, SC 29169      BeckettFinancialGroup.com

(803) 939-4848

JB Beckett

JB@BeckettFinancialGroup.com

Monthly News and Information for Current and Future Retirees

Presented by JB Beckett – NOVEMBER 2018

QUOTE OF THE MONTH

 

“Live life to the fullest.”

ERNEST HEMINGWAY

retirEment PLANNING CONTINUES AFTER YOU RETIRE

It can be easy think of retirement planning as a means to an end: a series of purposeful meetings leading up to a life transition. This transition is not the end of retirement planning. Think of this transition (and the steps preceding it) as the first phase. The second phase focuses on managing your spending, plus enhancing your income and savings.

It may be useful to plan your spending with the “bucket” approach. In this strategy, you withdraw assets from three “buckets” to spend on present-day, near-term, and future needs. The present-day (or short-term) bucket is a bucket of cash, typically from bank accounts or short-duration, fixed-income investments, that complements Social Security and other income sources. This is a liquid resource you can tap for emergency expenses as well as everyday needs. Your second bucket is your near-term bucket, a portion of your retirement savings invested for a mix of growth and income. This bucket could help you finance your vacations, a remodel of your home or yard or a dream that emerges during your “second act.” Your third bucket, a portion of your retirement fund invested mostly with an eye toward long-range growth, can be used to address health care costs (including long-term care expenses). All the while, tweaks can be made to your retirement plan in pursuit of tax efficiency and improved income streams (one may lead to the other). According to Bankrate, 61% of Americans have no idea how much money they will need to save for retirement, and very few have probably considered how they will spend the savings they have once away from work. So the first phase of retirement planning is designed to provide one kind of clarity; the second phase, another.

1

TRAVEL TIP

 

Going abroad? Bring medications and supplements in original packaging.

In other countries, you may end up getting generics rather than brand names, and supplements and vitamins may come in different forms than you expect. Ask your physician for the exact generic names of the drugs you take. 

THE MAY-DECEMBER RETIREMENT CHALLENGE

When one spouse or partner is considerably older than the other, retirement may unfold differently for that couple than it does for others. Most importantly, the younger spouse or partner must realize how self-reliant he or she may need to be decades from now. 

If you are a Gen Xer married to or partnered with a Baby Boomer, the prime challenge may be making your own wealth last until your eighties or nineties. Your spouse or partner may have a greater amount of wealth and retirement savings than you do, but future long-term care or hospital expenses may reduce it to an extent you cannot anticipate. Consider also that you might need to retire earlier than you think, to care or simply be with your spouse or partner if he or she becomes physically or mentally frail. If you can work well into your sixties, this can be a plus, as you can maintain your own income and keep up your own retirement savings effort. If you are in your early sixties and your partner or spouse is in his or her eighties and in need of eldercare, having at least one income can help if your home needs upkeep or if you need to downsize. If you intend to retire together, your loved one may be eligible for Medicare, but you may be without any health insurance for some time (and the average annual premium for individual private health coverage was $6,896 this year, by the estimate of the National Conference of State Legislatures). These matters all deserve consideration before a retirement decision is made.

2

DID YOU KNOW?

 

Sometimes the red planet gets a blanket of white

Snow occasionally falls on parts of Mars. The snow is a bit different than that we know on Earth, however: it is not comprised of water, but carbon dioxide. As a result, there are no snowflakes during a Mars snowfall, only a kind of fog.

3

ON THE

BRIGHT SIDE

At the end of the third quarter of 2018, the average IRA balance was $111,000. That was more than double the average balance of $52,000 in 2008, according to Fidelity Investments.

4

BRAIN TEASER

 

What belongs to you, but is used more by others?

STUMPED? CALL (803) 939-4848 FOR THE ANSWER!

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

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. 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.

 

CITATIONS.

1 – investopedia.com/retirement/retirement-planning-doesnt-stop-when-you-retire/ [11/12/18]

2 – washingtonpost.com/business/2018/10/29/retiring-with-big-age-gap-these-couples-share-joys-challenges/ [10/29/18]

3 – mentalfloss.com/life-on-mars-facts [11/12/18]

4 – plansponsor.com/years-positive-retirement-savings-behaviors-lead-record-balances/ [11/5/18]

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Weekly Economic Update for November 12, 2018

In this week’s recap: swift service sector expansion, sustained consumer optimism, a surge in wholesale inflation, and gains for equities.

Weekly Economic Update

 

Presented by JB Beckett, November 12, 2018

 

SERVICE SECTOR KEEPS BOOMING

At a lofty October mark of 60.3, the Institute for Supply Management’s non-manufacturing purchasing manager index was a bit lower than the record 61.6 reading seen in September, but it also beat the 59.3 consensus forecast from Refinitiv. Across the 12 months ending in October, the mean reading for the index was a strong 58.5.

1,2

     

IS THIS THE BEST YEAR FOR CONSUMER SENTIMENT SINCE 2000?

It could turn out that way, if the University of Michigan’s influential index maintains its current level. Its preliminary November edition came in at 98.3, slightly below the final October mark of 98.6 and slightly above the 98.0 reading projected in a Bloomberg analyst poll. The gauge has averaged a reading of 98.4 in 2018, a level unseen in the past 18 years.

3

    

WHOLESALE INFLATION JUMPS 0.6% IN A MONTH

Higher costs for fuel and industrial supplies were significant factors, according to the Bureau of Labor Statistics. The PPI rose 2.9% across the 12 months ending in October.

4

    

A NEW MONTH, A NEW DIRECTION FOR STOCKS

In November, the market is doing its best to erase the memory of October. All three major indices advanced again last week, with the Dow Industrials adding 2.84%; the S&P 500, 2.13%; the Nasdaq Composite, 0.68%. At Friday’s close, their settlements were: Dow, 25,989.30; S&P, 2,781.01; Nasdaq, 7,406.90.

5

    

 

T I P   O F   T H E   W E E K

 

If the

terms on one of your credit cards change unfavorably

, you may consider dropping the card. Think twice about doing so. If you have had the account for years and the payment history is good, closing it out could possibly hurt your FICO score. Instead, 

use that card for minor purchases only

.

 

 

THIS WEEK

Monday marks the observance of Veterans Day; the bond market will be closed, but stocks, currencies, and commodities will be actively traded, with no major earnings news scheduled. | Tuesday, earnings roll in from Advance Auto Parts, Aramark Holdings, Bayer, Beazer Homes, Cumulus Media, Home Depot, and

Tyson Foods. | On Wednesday, the latest Consumer Price Index surfaces, and investors also

consider earnings news from Cisco, Griffon, Macy’s, NetApp, NetEase, and Smart & Final. | October retail sales figures appear Thursday, along with a new initial jobless claims report and earnings from America’s Car-Mart, Applied Materials, Energizer Holdings, JCPenney, Nordstrom, Nvidia, Shoe Carnival, Sonos, and Walmart. | Friday, Viacom announces Q4 results.

 

 

Q U O T E  O F  T H E  W E E K

 

“The

best and most beautiful things

in the world cannot be seen or even touched – they

must be felt with the heart

.”

Helen Keller

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

5.14

10.77

12.98

19.30

NASDAQ

7.29

9.73

17.80

35.81

S&P 500

4.02

7.60

11.41

20.25

 

 

 

 

 

REAL YIELD

11/9 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

1.15

0.46

0.59

2.84

 

Sources: wsj.com, bigcharts.com, tre

asury.gov – 11/9/18

5,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

T H E   W E E K L Y   R I D D L E

 

A young man

runs away from home

. Cheered on by onlookers, he makes

three lefts

, then finds

two masked men

ahead of him, but he runs toward them

. Can you explain why?

LAST WEEK’S RIDDLE: It floats when born, lies down when alive, and runs as it dies. What is it?

ANSWER: Snow.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

Know someone who could use information like this?

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

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

CITATIONS:

1 – cnbc.com/2018/11/05/october-ism-non-manufacturing-index.html [11/5/18]

2 – instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm?SSO=1 [11/5/18]

3 – 247wallst.com/economy/2018/11/09/november-consumer-sentiment-slips-election-impact-negligible/ [11/9/18]

4 – marketwatch.com/story/wholesale-inflation-surges-in-october-to-6-year-high-ppi-shows-2018-11-09 [11/9/18]

5 – markets.wsj.com/us [11/9/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F9%2F17&x=0&y=0 [11/9/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F9%2F17&x=0&y=0 [11/9/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F9%2F17&x=0&y=0 [11/9/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F8%2F13&x=0&y=0 [11/9/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F8%2F13&x=0&y=0 [11/9/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F8%2F13&x=0&y=0 [11/9/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F10%2F08&x=0&y=0 [11/9/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F10%2F08&x=0&y=0 [11/9/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F10%2F08&x=0&y=0 [11/9/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/9/18]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/9/18]

 

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Weekly Economic Update for August 13, 2018

In this week’s recap: core inflation reaches a 10-year peak, oil’s losing streak continues, earnings impress, and Wall Street indices have a mixed week.

1

Weekly Economic Update

 

Presented by JB Beckett, August 13, 2018

 

INFLATION AT 2.9%, CORE INFLATION AT 2.4% 

Friday, the Department of Labor reported these annualized gains through July of this year for the Consumer Price Index. Both the headline and core CPIs rose 0.2% last month, matching the consensus forecast of economists polled by Reuters. The yearly core inflation increase is the largest on record since September 2008. (The core inflation reading leaves out food and energy costs.) The Producer Price Index was flat in July, with the yearly advance declining slightly to 3.4%; the core PPI rose 0.3%, resulting in a 2.8% annualized gain.

1,2

 

HOW IS EARNINGS SEASON GOING?

Ninety-one percent of S&P 500 companies have reported Q2 results so far. FactSet, the respected stock market analytics firm, reports that 72% have surprised to the upside in terms of sales and 79% have topped earnings expectations. Weighing actual earnings results and future projections, FactSet estimates a 24.6% “blended” earnings growth rate for the second quarter. On Friday, the forward 12-month P/E ratio for the S&P 500 was 16.6; that compares to an average of 16.2 across the past five years.

3

 

OIL FALLS FOR A SIXTH STRAIGHT WEEK

WTI crude last suffered such a losing streak in 2015. Friday, it settled at $67.63 on the NYMEX, even after a 1.2% advance during Friday’s trading session. Some commodities investors believe that the emerging trade war will reduce demand for energy products.

4

 

NASDAQ ADVANCES, S&P and DOW RETREAT

The possibility of the U.S. doubling tariffs on Turkish aluminum and steel sent stocks skidding worldwide, Friday, as diplomatic disagreements between the countries took on an economic aspect. Of the three major Wall Street indices, only the Nasdaq Composite posted a weekly gain, rising 0.35% to 7,839.11. The S&P 500 fell 0.25% in five days, settling at 2,833.28 Friday. The Dow Jones Industrial Average ended the week 0.59% lower at 25,313.14.

5,6

 

 

T I P   O F   T H E   W E E K

 

This year, the Internal Revenue Service eased the “use it or lose it” rule on 

Flexible Spending Accounts (FSAs)

. In the past, funds you directed into an FSA had to be spent by the end of a year or else they would be forfeited.

The I.R.S. now permits you to carry over as much as $500 in FSA funds into the next year,

but your employer must elect to allow this option.

 

 

THIS WEEK

Sysco announces Q2 results Monday. | Advance Auto Parts, Agilent Technologies, and Home Depot present earnings on Tuesday. | On Wednesday, July retail sales numbers are out, along with earnings from Briggs & Stratton and Cisco. | Nordstrom, Nvidia, and Walmart share quarterly results on Thursday, as Wall Street also considers new data on initial jobless claims and July homebuilding activity. | The University of Michigan’s initial August consumer sentiment index appears on Friday, plus the Conference Board’s latest leading indicators index and earnings from Deere & Co.

 

 

Q U O T E  O F  T H E  W E E K

 

“Do not accustom yourself to use big words for

little matters.

SAMUEL JOHNSON

 

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

2.40

15.88

12.82

11.48

NASDAQ

13.55

26.09

22.84

22.13

S&P 500

5.97

16.20

13.50

11.71

 

 

 

 

 

REAL YIELD

8/10 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.78

0.40

0.33

1.80

 

Sources: wsj.com, bigcharts.com, treasury.gov – 8

/10/18

6,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

T H E   W E E K L Y   R I D D L E

 

A cargo truck hauling a load of lumber

can carry 2 tons

. It approaches a bridge with a sign, which notes that

the bridge can support up to 2 tons of weight

. The driver sees the sign and reckons that the bridge should hold up under the weight of the truck. Is the driver right?

 

LAST WEEK’S RIDDLE: Gary drops an egg onto a sidewalk. The egg doesn’t break after falling 3 feet. Why?

ANSWER: The egg is dropped from a height of more than 3’, so after 3’ of falling, it has not yet broken.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

Know someone who could use information like this?

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

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

CITATIONS:

1 – cnbc.com/2018/08/10/us-cpi-july-2018.html [8/10/18]

2 – reuters.com/article/us-usa-economy-inventories/u-s-producer-prices-unchanged-in-july-idUSKBN1KU1JH [8/9/18] 

 

3 – factset.com/hubfs/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_081018.pdf [8/10/18]

  

4 – bloomberg.com/news/articles/2018-08-10/oil-set-for-sixth-weekly-loss-as-u-s-china-trade-war-escalates [8/10/18]

5 – thestreet.com/markets/stocks-slide-amid-currency-crisis-in-turkey-14679908 [8/10/18]

 

6 – markets.wsj.com/us [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F10%2F17&x=0&y=0 [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F10%2F17&x=0&y=0 [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F10%2F17&x=0&y=0 [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F9%2F13&x=0&y=0 [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F9%2F13&x=0&y=0 [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F9%2F13&x=0&y=0 [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F11%2F08&x=0&y=0 [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F11%2F08&x=0&y=0 [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F11%2F08&x=0&y=0 [8/10/18]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/10/18]

 

9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/10/18]

   

 

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Monthly Economic Update for August, 2018

In this month’s recap: earnings and fundamentals encourage Wall Street, while tariff talk continues, inflation pressure mounts, and home sales decline.

Monthly Economic Update

 

Presented by JB Beckett, August 2018

 

THE MONTH IN BRIEF

While investors kept tariffs and trade disputes in mind in August, a new earnings season provided Wall Street with a lift. Blue chips especially benefited: the Dow Jones Industrial Average rose 4.71% for the month. Broadly speaking, strong corporate profits and domestic economic data gladdened the bulls, even as question marks about global commerce flashed.

1

 

 

DOMESTIC ECONOMIC HEALTH

Was the federal government about to enlarge tariffs on Chinese imports or relax them? The month ended with conflicting signals. In late July, Bloomberg reported that the Trump administration was considering hiking the 10% import taxes, which it planned to impose on $200 billion of Chinese-made goods this fall, to 25%. Yet as the month ended, representatives of the offices of Secretary of State Steven Mnuchin and Chinese Vice Premier Liu He were trying to rekindle trade negotiations, with the possibility of dropping these proposed tariffs.

2

 

Two other developments concerning tariffs made headlines. On July 1, Canada acted to impose a 25% import tax on American steel products and a 10% import tax on assorted U.S. consumer, food, and agriculture exports coming through its borders. On July 25, President Trump and European Commission President Jean-Claude Junker agreed to lower the respective industrial tariffs the U.S. and E.U. had announced and postpone others (such as the planned 25% U.S. tax on European-built autos) pending further talks.

3,4

A new report from the Department of Labor showed a net June gain of 213,000 jobs. That topped the 195,000 projected by Bloomberg’s consensus forecast. Headline unemployment increased to 4.0% from 3.8% in June, while the U-6 rate, counting the underemployed, rose 0.2% to 7.8%, but those changes reflected the growth in the labor force participation rate. Wages were rising 2.7% a year at the end of the second quarter.

5

Consumer costs, however, were increasing at 2.9% per year, according to the latest Consumer Price Index. That was the highest inflation rate seen since February 2012. Well beneath the headline number, the core CPI (which removes food and fuel prices) was up just 2.3%, annually, through June. The large difference between the two CPIs reflects the impact of a 30.8% year-over-year rise in the price of fuel oil and a 24.3% annualized gain for the cost of gasoline. (The June Producer Price Index showed yearly wholesale inflation running at 3.4%.)

6,7

The Institute for Supply Management’s purchasing manager indices looked very strong as spring gave way to summer. In June, ISM’s non-manufacturing PMI achieved a mark of 59.1, improving 0.5 points. The June and July readings for ISM’s manufacturing PMI were also excellent: 60.2, then 58.1. Federal government reports showed durable goods orders increasing 1.0% in June; industrial output, 0.6%; manufacturing output, 0.8%.

6,8

On Main Street, consumer confidence held up even as households thought about the potential impact of tariffs on the economy. The Conference Board’s index rose 0.3 points in July to 127.4, and the University of Michigan’s barometer progressed from 97.1 in its preliminary July edition to a final July mark of 97.9.

6

 

Fresh Department of Commerce data showed consumers spending at a healthy rate at the end of spring. Personal spending was up 0.4% in June, with overall retail sales advancing 0.5%; all this was helped by a gain of 0.4% for personal incomes.

6

 

 

GLOBAL ECONOMIC HEALTH

China announced moves last month to try and ward off the potential economic impact of U.S. tariffs and to stimulate an economy that had slowed slightly to 6.7% growth during the second quarter. Its central bank poured the equivalent of $74 billion U.S. into its financial system in June, a record. Its government announced a new round of bonds to facilitate localized upgrades in infrastructure and forthcoming tax cuts. Its foreign ministry denied accusations of currency manipulation to stimulate exports. Southeast Asia’s largest economies were still projected for healthy growth in 2018, in some cases matching that of the P.R.C. A median forecast from Bloomberg puts Indonesia’s 2018 GDP at 5.3%; Malaysia, 5.5%; Singapore, 3.1%; Thailand, 4.2%; Vietnam, 6.8%; the Philippines, 6.7%.

9,10

What if the Brexit occurred without any deal defining how the European Union and the United Kingdom could continue to do business? That troubling question was on many minds in Europe in July. U.K. Prime Minister Teresa May publicly stated back in 2017 that “no deal for Britain is better than a bad deal for Britain,” and the E.U. has been advising corporations and governments to prepare for the possibility of a “hard” Brexit. A “no-deal” Brexit is a real risk, with the customs border between Northern Ireland (part of the U.K.) and Ireland (part of the E.U.) as the major sticking point. The Netherlands, Belgium, and the U.K. have begun to stockpile cash and resources in case of potential economic shortages or hardships caused by a trade chasm. The projected date for the Brexit is March 29, 2019, but it could be postponed. Fifty-one percent of U.K. respondents to a July Sky News poll felt the Brexit was a bad move for the country, and 78% felt May’s government was doing a poor job of negotiating the separation.

11,12

 

WORLD MARKETS

Was July also a good month for foreign shares? Largely speaking, yes. India’s major indices and two South American benchmarks made the most dramatic gains. The Sensex advanced 6.16%; the Nifty 50, 5.99%. Brazil’s Bovespa topped both with a climb of 8.88%, while Argentina’s Merval jumped 12.27%. Mexico’s Bolsa advanced 4.27%. Speaking of emerging markets, the MSCI Emerging Markets index added 1.68%, while the MSCI World index improved 3.05% in July.

13,14

 

In Europe, the German DAX rose 4.06%. France’s CAC 40 ascended 3.53%, while the FTSE Eurofirst 300 gained 3.19%. The United Kingdom’s FTSE 100 posted a 1.46% July advance, and Russia’s Micex improved 1.10%. Looking at the Asia-Pacific region, Taiwan’s TSE 50 rose 4.28%; Australia’s All Ordinaries, 1.22%; the Nikkei 225, 1.12%; the Shanghai Composite, 1.02%. Hong Kong’s Hang Seng slipped 1.29%; South Korea’s Kospi, 1.33%. To our north, Canada’s TSX Composite gained 0.96%.

13

 

COMMODITIES MARKETS

As stocks attracted investors during a solid earnings season, commodities lost some appeal. All the major energy futures declined across July, along with the four key metals. Oil closed the month at $68.43 on the NYMEX, taking a 7.84% loss. Unleaded gasoline dipped 4.85%; natural gas, 4.93%; heating oil, 3.19%. Copper stumbled 4.48% in July; silver, 3.18%; gold, 2.28%; platinum, 1.28%. COMEX gold was worth $1,223.10 an ounce at the close on July 31; COMEX silver, $15.54 an ounce. The U.S. Dollar Index added just 0.01% during July.

1,15

Some crops did post big gains, while others fell hard. July winners included wheat at +11.57%, corn at +6.36%, cotton at +5.61%, and soybeans at +5.25%. Among the losers: coffee at -2.44%, sugar at -8.77%, and cocoa at -12.88%.

15

 

REAL ESTATE 

New reports from the National Association of Realtors and Census Bureau showed home sales weakening in June. The slip in resales was minor: just 0.6%. It was, however, the third consecutive monthly retreat for existing home purchases; in spring, they slowed to a pace unseen since January. Some good news emerged to counter this: the NAR’s pending home sales index rose 0.9% in the sixth month of the year. New home buying fell off 5.3% during June; the May gain was revised to 3.9%.

6,16

Home values continued their healthy appreciation. The latest 20-city S&P CoreLogic Case-Shiller index showed home prices up 6.5%, year-over-year, through May. Prospective buyers could take heart in the fact that mortgage rates were little changed in late July from where they were in late June. Freddie Mac’s Primary Mortgage Market Survey from June 26 listed the mean interest rate on the 30-year FRM at 4.55%, the mean rate on the 15-year FRM at 4.04%, and the average interest rate for the 5/1-year ARM at 3.87%; in the July 26 PMMS, the respective numbers were 4.54%, 4.02%, and 3.87%.

6,17

The last month of the second quarter also witnessed less groundbreaking. In June, developers made 12.3% fewer housing starts and arranged 2.2% fewer building permits than in May, according to the Census Bureau.

6

 

 

T I P   O F   T H E   M O N T H

 

Summer is an ideal time to organize your tax records.

 Contact your CPA and ask for a mid-year tax check-up. Opportunities for savings may emerge.

 

 

LOOKING BACK… LOOKING FORWARD

The Dow Jones Industrial Average and S&P 500 managed to catch up a little versus the Nasdaq Composite in July. Blue chips rose 4.71%, the S&P advanced 3.60%, and the Nasdaq improved 2.15% for the month. The Russell 2000 was not far behind in terms of performance, rising 1.69%. If it seemed that July was not all that volatile, the CBOE VIX’s performance will confirm your assumption; Wall Street’s top gauge of market instability fell 20.26% across July to 12.83, but remained up 16.21% YTD.

1,18

The Nasdaq, Dow, Russell, and S&P are all firmly in the green for 2018 at this date. As the closing bell rang on July 31, their year-to-date numbers were as follows: DJIA, +2.82%; S&P, +5.34%; COMP, +11.13%; RUT, +8.81%. When that trading session ended, the four benchmarks settled at these levels: DJIA, 25,415.19; COMP, 7,671.79; S&P, 2,816.29; RUT, 1,670.80.

1,18

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

2.82

16.10

12.79

12.34

NASDAQ

11.13

20.85

22.31

23.00

S&P 500

5.34

14.01

13.41

12.22

 

 

 

 

 

REAL YIELD (%)

7/31 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.84

0.48

0.38

1.65

 

Sources: barchart.com, bigcharts.com, treasury.gov – 7/31/

18

1,19,20,21

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

The second half of the year started with some promise: earnings and fundamentals largely came through and brightened the mood of investors contending with unanswered questions about global trade. July was the S&P 500’s fourth straight winning month, and 2018 is the twelfth year in the past 90 years in which the S&P has had an April-July win streak. In all previous 11 years featuring such a streak, the S&P advanced across the rest of the year. Will history repeat in 2018? Maybe not, but 11 for 11 is certainly encouraging. A strong finish to 2018 is by no means assured, as trade and diplomatic concerns, probable Federal Reserve rate hikes, and perhaps even a slowing U.S. business cycle cloud the horizon. The market will also exit earnings season this month, and that may leave less for investors to get excited about. Late-summer doldrums could certainly overtake Wall Street, but that does not rule out the possibility of a bullish fourth quarter.

22

 

 

 

Q U O T E   O F   T H E   M O N T H

 

Drive thy business

or it will drive thee.”

Benjamin FRANKLIN

 

 

UPCOMING RELEASES

What will investors pay attention to across the rest of August, in addition to the remaining earnings calls? They will look at the latest jobs report from the Department of Labor and ISM’s newest non-manufacturing PMI (8/3), the July PPI (8/9), the July CPI (8/10), July retail sales and industrial output (8/15), the Census Bureau’s latest snapshot of residential construction activity (8/16), the initial August University of Michigan consumer sentiment index and the Conference Board’s July leading indicators index (8/17), the NAR’s July existing home sales report (8/22), the Census Bureau’s latest new home sales announcement (8/23), July hard goods orders (8/24), a new Conference Board consumer confidence index (8/28), the second estimate of Q2 economic expansion and the NAR’s report on July pending home sales (8/29), July consumer spending figures and the July PCE price index (8/30), and lastly, the final August University of Michigan consumer sentiment index (8/31).

 

 

T H E  M O N T H L Y   R I D D L E

 

The 22nd and 24th Presidents had the same biological mother and father, yet were not brothers. How was this possible?

 

LAST MONTH’S RIDDLE: Getting into it is often easy, as it may not require speech or much thought. It is often very difficult to get out of, though. What is it?

ANSWER: Trouble.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com 

BeckettFinancialGroup.com

 

Know someone who could use information like this?

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

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. The CBOE Volatility Index

®

(VIX

®

) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx

®

, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The BSE SENSEX (Bombay Stock Exchange Sensitive Index), also-called the BSE 30 (BOMBAY STOCK EXCHANGE) or simply the SENSEX, is a free-float market capitalization-weighted stock market index of 30 well-

established and financially sound companies listed on the Bombay Stock Exchange (BSE). The Nifty 50 (NTFE 50) is a well-diversified 50-stock index accounting for 13 sectors of the Indian economy. It is used for a variety of purposes such as benchmarking fund portfolios, index-based derivatives and index funds. The Bovespa Index is a gross total return index weighted by traded volume & is comprised of the most liquid stocks traded on the Sao Paulo Stock Exchange. The MERVAL Index (MERcado de VALores, literally Stock Exchange) is the most important index of the Buenos Aires Stock Exchange. The Mexican Stock Exchange, commonly known as Mexican Bolsa, Mexbol, or BMV, is the only stock exchange in Mexico.  The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The MSCI World Index is a free-float weighted equity index that includes developed world markets and does not include emerging markets. The DAX 30 is a Blue-Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSEurofirst 300 Index comprises the 300 largest companies ranked by market capitalisation in the FTSE Developed Europe Index. The FTSE 100 Index is a share index of the 100 companies listed on the London Stock Exchange with the highest market capitalization. The MICEX 10 Index is an unweighted price index that tracks the ten most liquid Russian stocks listed on MICEX-RTS in Moscow. The FTSE TWSE Taiwan 50 Index consists of the largest 50 companies by full market value and is also the first narrow-based index published in Taiwan. The All Ordinaries (XAO) is considered a total market barometer for the Australian stock market and contains the 500 largest ASX-listed companies by way of market capitalization. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE).  The Nikkei average is the most watched index of Asian stocks. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange.  The Hang Seng Index is a free float-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The Korea Composite Stock Price Index or KOSPI is the major stock market index of South Korea, representing all common stocks traded on the Korea Exchange. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The US Dollar Index measures the performance of the U.S. dollar against a basket of six currencies. 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 [7/31/18]

2 – bloomberg.com/news/articles/2018-07-31/u-s-china-said-to-seek-to-restart-talks-to-defuse-trade-war [7/31/18]

3 – piie.com/blogs/trade-investment-policy-watch/trump-trade-war-china-date-guide [7/24/18]

4 – investors.com/news/economy/trade-war-trump-juncker-announce-deal-pulling-back-from-u-s-eu-from-brink/ [7/25/18]

5 – fortune.com/2018/07/06/june-2018-jobs-report/ [7/6/18]

6 – investing.com/economic-calendar/ [7/31/18]

7 – tradingeconomics.com/united-states/inflation-cpi [7/12/18]

8 – instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm [7/5/18]

9 – bbc.com/news/business-44933512 [7/24/18]

10 – straitstimes.com/business/economy/growth-outlooks-for-south-east-asias-economies-as-trade-war-fears-gather [7/16/18]

11 – bloomberg.com/news/articles/2018-07-24/what-no-deal-brexit-means-and-how-it-may-be-averted-quicktake [7/24/18]

12 – reuters.com/article/uk-britain-eu-poll/britons-see-brexit-turning-sour-half-want-chance-to-vote-again-poll-idUSKBN1KK0KW [7/29/18]

13 – markets.on.nytimes.com/research/markets/worldmarkets/worldmarkets.asp [7/31/18]

14 – msci.com/end-of-day-data-search [7/31/18]

15 – money.cnn.com/data/commodities [7/31/18]

16 – tradingeconomics.com/united-states/existing-home-sales [7/30/18]

17 – freddiemac.com/pmms/archive.html [7/30/18]

18 – money.cnn.com/data/markets/russell [7/31/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F31%2F17&x=0&y=0 [7/31/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F31%2F17&x=0&y=0 [7/31/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F31%2F17&x=0&y=0 [7/31/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F31%2F13&x=0&y=0 [7/31/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F31%2F13&x=0&y=0 [7/31/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F31%2F13&x=0&y=0 [7/31/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F31%2F08&x=0&y=0 [7/31/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F31%2F08&x=0&y=0 [7/31/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F31%2F08&x=0&y=0 [7/31/18]

20 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/31/18]

21 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/31/18]

22 – marketwatch.com/story/the-fate-of-the-stock-market-for-2018-could-rest-on-the-next-5-trading-days-2018-07-24 [7/24/18]

 

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Weekly Economic Update for July 30, 2018

In this week’s recap: an impressive Q2 GDP reading, a consumer sentiment dip,a falloff in home buying, and the end of a long stock market correction.

Weekly Economic Update

Presented by JB Beckett, July 30, 2018

First estimate of Q2 GDP: 4.1%

Not since the third quarter of 2014 has the economy grown at such a pace.In its report released Friday, the Bureau of Economic Analysis noted 4.0% growth in consumer outlays during the quarter,a 7.3% improvement in business spending, and 3.5% more federal government spending. The BEA also revised the first-quarter GDP number up 0.2% to 2.2%.

1

CONSUMER SENTIMENT FALLS TO A 6-MONTH LOW

The University of Michigan’s final July consumer sentiment index came in at 97.9, 0.8 points higher than its preliminary reading earlier in the month, but 0.3 points below its final June mark.This minor month-over-monthdescentleft the gauge at its lowest level since January.

2

HOME SALES RETREAT

Existing home purchases slowed 0.6% in June, and new home buying weakened 5.3%. June was the third straight month to see a pullback in resales, according to the National Association of Realtors, and existing home sales were down 2.2%, year-over-year, as the first half of 2018 ended. In its monthly report, the Census Bureau noted that new home sales are up 6.9% YTD.

3

STOCKS PULL OUT OF CORRECTION MODE

On Wednesday, the S&P 500 – the Wall Street index that the financial media typically uses as shorthand for the broad stock market – exited its longestcorrection in nearly 34 years by settling at 2,846.07. (A correction is defined as a descent of at least 10% from an index’s peak close; an index recovers from a correction when it climbs 10% above a closing low.) The S&P gained 0.61% for the week, finishing Fridayat 2,818.82. The Dow Industrials bettered that, adding 1.57% in five days to reach 25,451.06 at Friday’s closing bell. Losing 1.06% for the week, the Nasdaq Composite declined to 7,737.42.

4,5

T I P O F T H E W E E K

It is better to

create an emergency fund with gradual amounts from your paycheck

than with a lump sum taken from an investment account. Retirement savings will notgrow and compound if they are drawn down early.

THIS WEEK

On Monday, the NAR presents its June pending home sales index, and Acadia Healthcare, AK Steel, Bloomin’ Brands, Booz Allen Hamilton, Caterpillar, CNA Financial, Denny’s, KBR, Kemper, Loews, Logitech, Nautilus, Nutrisystem, Rent-A-Center, Seagate Technology, and Transocean offer earnings news. | Tuesday, June personal spending data emerges, along with the June PCE price index, the Conference Board’s latest consumer confidence index, and earnings fromAnadarko Petroleum, Apple, Archer Daniels Midland, Baidu, BP, Charter Communications, Container Store, Credit Suisse, Cummings, Extra Space Storage,Fidelity National, Fortis, Fresh Del Monte Produce, Frontier Communications, Genworth, Huntsman, Hyatt Hotels, Pandora Media, Pfizer, Procter & Gamble, Ralph Lauren, Sony, Unisys, Vulcan Materials, WestJet, and William Lyon Homes. | On Wednesday, the Federal Reserve issues its latest policy statement, ADP puts out its latest payrolls report, the Institute for Supply Management unveils its June manufacturingPMI, and earnings arrive from Alamo Group, Allstate, AMC Entertainment, AmeriGas, Arcelor Mittal, AutoNation, Chesapeake Energy, Cirrus Logic, Diebold Nixdorf, Energizer Holdings, Express Scripts, Fitbit, Garmin, Hanesbrands, Herbalife, Humana, Macerich, Marathon Oil, MetLife, Molson Coors, Pitney Bowes, Prudential Financial, Public Storage, Sprint, Square, Taylor Morrison, Tesla, TripAdvisor, U.S. Steel, Valvoline, Voya Financial, Wyndham Hotels & Resorts, and Zynga.| Thursday’s earnings roll call includes Activision Blizzard, Aetna, AMC Networks, AIG, Avon, Blue Apron, CBRE Group, CBS, Cigna, Clorox, DowDuPont, Duke Energy, Fluor, GoDaddy, GoPro, Icahn Enterprises, Kellogg, MGM Resorts, Motorola Solutions, Parker Hannifin, Pinnacle Foods, RE/MAX Holdings, Shake Shack, Spectra Energy, Symantec, Take-Two Interactive, Teva Pharmaceutical, Western Union, Wingstop, and Yum! Brands. | A new employment report from the Department of Labor appears Friday, plus ISM’s June non-manufacturing PMI and earnings from Kraft Heinz.

QUOTE OF THE WEEK

No act of kindness,

no matter how small, is ever wasted.”

AESOP

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

2.96

16.59

12.72

12.86

NASDAQ

12.08

21.38

22.83

24.17

S&P 500

5.43

14.03

13.33

12.84

REAL YIELD

7/27 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.84

0.49

0.43

1.70

Sources: wsj.com, bigcharts.com, treasury.gov – 7/27/18

5,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

T H E W E E K L Y R I D D L E

What can you feel but never touch,

hear but never see?

LAST WEEK’S RIDDLE: Scott has math 4 times a week. If he has math at 8:00 Monday, 9:00 on Tuesday and Wednesday, and 8:00 on Friday, when does he have math on Thursday?

ANSWER: Scott does not have math on Thursday, as he already has math at the four other times.

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com

BeckettFinancialGroup.com

Know someone who could use information like this?

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

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

CITATIONS:

1 – cnbc.com/2018/07/27/us-gdp-q2-2018.html [7/27/18]

2 – bloomberg.com/news/articles/2018-07-27/u-s-consumer-sentiment-falls-to-six-month-low-on-trade-concern [7/27/18]

3 – nytimes.com/aponline/2018/07/25/us/politics/ap-us-new-home-sales.html [7/25/18]

4 – marketwatch.com/story/the-sp-500-just-ended-its-longest-stint-in-correction-territory-since-1984-2018-07-25 [7/25/18]

5 – markets.wsj.com/us [7/27/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F28%2F17&x=0&y=0 [7/27/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F28%2F17&x=0&y=0 [7/27/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F28%2F17&x=0&y=0 [7/27/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F26%2F13&x=0&y=0 [7/27/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F26%2F13&x=0&y=0 [7/27/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F26%2F13&x=0&y=0 [7/27/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F28%2F08&x=0&y=0 [7/27/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F28%2F08&x=0&y=0 [7/27/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F28%2F08&x=0&y=0 [7/27/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/27/18]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/27/18]

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Weekly Economic Update for July 23, 2018

In this week’s recap: retail sales impress again, groundbreaking suddenly tails off, stocks tread water, and more tariffs might be in store for China.

Weekly Economic Update

 

Presented by JB Beckett, July 23, 2018

 

ANOTHER GOOD MONTH FOR RETAIL SALES

Americans are spending freely, as new Census Bureau data confirms. Retail sales advanced 0.5% last month, matching the consensus forecast of economists surveyed by Reuters, in the wake of a revised 1.3% May gain. (May was the best month for buying since last September.) The only negative note: core retail sales were flat in June. (Core sales exclude food, fuel, auto, and home improvement purchases.)

1

 

HOUSING STARTS SINK TO A 9-MONTH LOW

Taking their biggest monthly fall since November 2016, starts unexpectedly dropped 12.3% in June. New Census Bureau data showed building permits declining 2.2% in June as well. In May, groundbreaking reached an 11-year peak.

2

 

ARE MORE TARIFFS COMING ON CHINESE GOODS?

The possibility has just been raised. During a CNBC

Squawk Box

interview Friday, President Trump noted that perhaps all Chinese imports should face U.S. tariffs, explaining that he was “ready to go to 500” – a reference to the $505.5 billion total in Chinese products that came to America in 2017. The U.S. exported $129.9 billion of goods to China last year.

3

 

A FLAT WEEK ON WALL STREET

While earnings and headlines certainly impacted market sectors, the major indices were little changed from where they began the week at Friday’s closing bell. Up 0.15% across five trading days, the Dow Jones Industrial Average concluded the week at 25,058.12. Moving north but 0.02% last week, the S&P 500 reached 2,801.83. Losing 0.07% on the week, the Nasdaq Composite settled at 7,820.20, Friday.

4

 

 

T I P   O F   T H E   W E E K

 

Are you a self-employed professional or a small business owner? You should seriously consider 

disability insurance

. As your salary may be your household’s main (or only) source of income, an extended interruption in your earnings could disrupt your lifestyle and prove financially disastrous.

 

 

THIS WEEK

Monday, earnings announcements emerge from Alphabet, Halliburton, Hasbro, Kaiser Aluminum, Lennox International, Netgear, TD Ameritrade, Whirlpool, and Zions Bancorp; Wall Street also looks at June existing home sales. | 3M, Ameriprise Financial, AT&T, Avery Dennison, Biogen, Chubb, Eli Lilly, Harley-Davidson, JetBlue, Kimberly-Clark, Lockheed Martin, Peabody Energy, Quest Diagnostics, Smith Micro, Stryker, Texas Instruments, TransUnion, UBS Group, and Verizon present earnings, Tuesday. | On Wednesday, the earnings roster includes Anthem, Boeing, Citrix, Coca-Cola, Corning, Dolby Labs, Equifax, Extended Stay Hotels, Facebook, Fiat Chrysler, Ford Motor Co., Freeport-McMoRan, General Motors, General Dynamics, Gilead Sciences, GlaxoSmithKline, GrubHub, Hilton Worldwide Holdings, Ingersoll-Rand, Mattel, Mondelez, NextEra Energy, Norfolk Southern, Northrop Grumman, O’Reilly, Owens Corning, PayPal, Qualcomm, Raymond James, Rockwell Automation, Ryder Systems, Sempra Energy, Sirius XM, Six Flags Entertainment, Smart & Final, T. Rowe Price, Trivago, Universal Health Services, UPS, Visa, and Waste Management; in other news, a June new home sales report appears. | Data on June hard goods orders and initial jobless claims surfaces Thursday, along with earnings news from Aflac, Alaska Air, Allergan PLC, Ally Financial, Altria Group, Amazon.com, American Airlines, Amgen, Anheuser-Busch, Beazer Homes, Bristol-Myers, Celgene, Chipotle, CME Group, Comcast, Conoco-Phillips, D.R. Horton, Daimler AG, Del Taco, Discover, Dunkin’ Brands, Edison International, Electronic Arts, Expedia, GNC, Hershey, Intel, International Paper, Live Nation, Marathon Petroleum, Mastercard, McDonalds, NCR, Nokia, Penske, Praxair, Pulte Group, Raytheon, Royal Dutch Shell, SkyWest, Spirit Airlines, Spotify, Starbucks, SuperValu, The Hartford, Under Armour, Valero Energy, Verisign, Western Digital, W.R. Grace, and Xerox. | On Friday, the first estimate of Q2 GDP arrives, plus the final July University of Michigan consumer sentiment index and earnings from Chevron, Colgate-Palmolive, Exxon Mobil, Merck, Phillips 66, Twitter, and Weyerhaeuser.

 

 

Q U O T E  O F  T H E  W E E K

 

It is

 

wise to remember

that you are one of those who can be fooled some of the time.”

LAURENCE J. PETER

 

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

1.37

15.95

12.24

11.85

NASDAQ

13.28

22.38

23.60

24.31

S&P 500

4.80

13.28

13.12

12.24

 

 

 

 

 

REAL YIELD

7/20 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.78

0.50

0.28

1.80

 

Sources: wsj.com, bigcharts.com, treasury.gov – 7/20/18

5,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

T H E   W E E K L Y   R I D D L E

 

Scott has math 4 times a week. If he has math at 8:00 Monday, 9:00 on Tuesday and Wednesday, and 8:00 on Friday,

when

does he have math on Thursday?

 

LAST WEEK’S RIDDLE: How many times can you subtract 100 from 1,000?

ANSWER: Just once, because after that, you will be subtracting 100 from 900, 800, and so on.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com BeckettFinancialGroup.com

 

Know someone who could use information like this?

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

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

CITATIONS:

1 – cnbc.com/2018/07/16/us-retail-sales-june-2018.html [7/16/18]

2 – tradingeconomics.com/united-states/housing-starts [7/18/18]

3 – cnbc.com/2018/07/19/trump-says-hes-ready-to-put-tariffs-on-all-505-billion-of-chinese-.html [7/19/18]

4 – markets.wsj.com/us [7/20/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F20%2F17&x=0&y=0 [7/20/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F20%2F17&x=0&y=0 [7/20/18]

 

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F20%2F17&x=0&y=0 [7/20/18]

 

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F19%2F13&x=0&y=0 [7/20/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F19%2F13&x=0&y=0 [7/20/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F19%2F13&x=0&y=0 [7/20/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F21%2F08&x=0&y=0 [7/20/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F21%2F08&x=0&y=0 [7/20/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F21%2F08&x=0&y=0 [7/20/18]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/20/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/20/18]

If you wish to be removed from our mailing list please click here .

Weekly Economic Update for July 16, 2018

In this week’s recap: inflation pressure mounts, a household sentiment index dips, gold settles lower, and stocks rally as a new earnings season begins.

Weekly Economic Update

 

Presented by JB Beckett, July 16, 2018

 

INFLATION NEARS 3%

The federal government’s Consumer Price Index rose 2.9% across the 12 months ending in June, a level of annualized inflation last seen in February 2012. Yearly inflation has now increased for five straight months (although the headline CPI went north only 0.1% last month). The core CPI, which removes food and fuel costs, rose 0.2% in June, bringing its 12-month gain to 2.3%. Over the past 12 months, the cost of fuel oil climbed 30.8%; the cost of gasoline, 24.3%. Feeling the effect of those advances, the Producer Price Index rose 3.4% in the year ending in June.

1,2

 

UNIVERSITY OF Michigan CONSUMER SENTIMENT GAUGE DECLINES

At a mark of 97.1, the preliminary July edition of this consumer sentiment index came in 1.1 points underneath its final June reading. Still, it was close to its average reading over the past year (97.7). One year ago, the index stood at 93.4. Thirty-eight percent of consumers felt tariffs would negatively affect the economy, an increase from 21% in June and 15% in May.

3

 

GOLD FALLS TO A 12-MONTH LOW

With a strengthening dollar providing a stiff headwind for the metals market, it was unsurprising that the key precious and base metals (gold, silver, copper, palladium, platinum) all retreated last week. Gold suffered the least, declining 1.2% to a Friday settlement of $1,241.20, its lowest COMEX close since July 17, 2017.

4

 

DOW CLIMBS BACK ABOVE 25,000

Finishing Friday’s trading session at 25,019.41, the blue chips rose 2.30% for the week, and outperformed the Nasdaq Composite and the S&P 500 over five days. The Nasdaq gained 1.79% to close out the week at 7,825.98, while the S&P advanced 1.50% to end the week at 2,801.31.

5

 

 

T I P   O F   T H E   W E E K

 

There are multiple reasons why you should

avoid taking a loan from your workplace retirement plan.

One excellent argument against this move: you will deprive the funds you borrow of compounding power.

 

 

THIS WEEK

Earnings take center stage: Bank of America, BlackRock, J.B. Hunt, and Netflix lead the way on Monday, when investors will also consider June retail sales figures. | Federal Reserve chair Jerome Powell begins two days of testimony before Congress on monetary policy on Tuesday; on the earnings front, Charles Schwab, Comerica, CSX, Fidelity National, Goldman Sachs, Johnson & Johnson, and UnitedHealth all announce. | Wednesday, earnings news rolls in from Abbott Labs, Alcoa, American Express, eBay, Grainger, IBM, Morgan Stanley, Northern Trust, Novartis, and U.S. Bancorp, and complementing all this, analysts consider June housing starts and building permits and a new Fed Beige Book. | On Thursday, BoNY Mellon, BB&T, Blackstone Group, Capital One, Celanese, Cintas, Dominos, E*TRADE, Fifth Third, GATX, KeyCorp, Microsoft, Nucor, Philip Morris, Snap-On, Sonoco, Travelers Companies, Unilever, and Union Pacific present earnings, and a new initial jobless claims report arrives. | Friday, earnings appear from Baker Hughes, General Electric, Honeywell International, Manpower, Regions Financial, Schlumberger, Stanley Black & Decker, State Street, and SunTrust Bank.

 

 

Q U O T E  O F  T H E  W E E K

 

“Always aim at

complete harmony

of thought and word and deed

.

MAHATMA GANDHI

 

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

1.21

16.08

12.36

12.63

NASDAQ

13.36

24.73

23.48

25.37

S&P 500

4.78

14.44

13.35

12.81

 

 

 

 

 

REAL YIELD

7/13 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.72

0.58

0.55

1.43

 

Sources: wsj.com, bigcharts.com, treasury.gov – 7/13/18

5,6,7,8

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

T H E   W E E K L Y   R I D D L E

 

How many times can you subtract

100

from 1,000?

 

LAST WEEK’S RIDDLE: Regina is about to meet her cousin Lydia for the first time. Regina has no idea what she looks like. She arrives at Lydia’s house at night. The door opens, and she sees a mail carrier, a UPS driver, and a police officer watching television. She immediately hugs Lydia. How does she know which one of the three is her cousin?

ANSWER: Two of the three are men.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com BeckettFinancialGroup.com

 

Know someone who could use information like this?

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

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

CITATIONS:

1 – tradingeconomics.com/united-states/inflation-cpi [7/12/18]

2 – investing.com/economic-calendar/ [7/13/18]

3 – sca.isr.umich.edu/ [7/13/18]

4 – marketwatch.com/story/gold-retreats-on-track-for-lowest-settlement-in-a-nearly-a-year-2018-07-13 [7/13/18]

5 – markets.wsj.com/us [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F13%2F17&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F13%2F17&x=0&y=0 [7/13/18]

 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F13%2F17&x=0&y=0 [7/13/18]

 

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F12%2F13&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F12%2F13&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F12%2F13&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F14%2F08&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F14%2F08&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F14%2F08&x=0&y=0 [7/13/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/13/18]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/13/18]

 

 

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Quarterly Economic Update for Q2, 2018

In this Q2 recap:

tariffs take center stage, U.S. data signals solid growth, oil gains 18.4%, and the S&P 500 rises nearly 3%.

Quarterly Economic Update

 

A review of Q2 2018, Presented by JB Beckett

 

THE QUARTER IN BRIEF

At the end of 2018, economists and journalists may look back on the second quarter and see the moment when a global trade war began. Whether one is truly underway or not, the fact is that Q2 was a good quarter for equities. The S&P 500 gained 2.93% in three months, and while the blue chips had their struggles, tech shares ascended once again. Many foreign benchmarks also had a good quarter, even as the Trump administration’s planned import taxes on U.S. trading partners drew tariffs in kind and bred pessimism overseas. Our labor market and manufacturing and service industries continued to look healthy, and consumer confidence and spending reports were largely encouraging. Existing home sales tailed off. Oil made quite a comeback, aided by supply concerns. It was a quarter in which relatively strong economic data was overshadowed by a shift in the playing field for global trade.

1

 

 

DOMESTIC ECONOMIC HEALTH

The Trump administration had begun imposing import taxes early in the year, but in the second quarter, the international tariff spat truly grew heated. U.S. duties against metals imported from Mexico, Canada, and European Union nations were met by 25% taxes levied by the E.U. on American jeans, bourbon, orange juice, and other products, and Canada, India, and Mexico announced duties on select imports from America as well. Then the U.S. supplemented its earlier tariffs with new 25% taxes on $34 billion of Chinese imports (set to take effect July 6), and threatened to impose further 10% duties on another $200 billion of Chinese products and a 20% tariff on autos coming out of the E.U. China replied to the new tariff on $34 billion of its exports with an equal tariff on U.S. goods, to be implemented July 6.

2

 

Interest rates moved north in Q2. The Federal Reserve made its second rate move of the year on June 13, taking the target range for the federal funds rate 0.25% higher to 1.75%-2.00%. A new wrinkle was found in the Federal Open Market Committee’s latest dot-plot consensus projection: it suggested four quarter-point rate hikes would occur this year rather than three.

3

April saw consumer spending jump 0.6%, but the May number was just a third of that. Consumer wages were up 0.3% in April, then advanced another 0.4% a month later. Retail purchases were up 0.4% in April; then, 0.8% for May.

4,5

Some of the data in the previous paragraph might seem a bit contradictory, but the takeaway was clear: consumers were playing a strong role in keeping the economy healthy. While consumer confidence indices fell during Q2, they were still at lofty levels. The University of Michigan’s index came in at 98.8 in April, then 98.0 in May and 98.2 in June; its historical average is 86.4. The Conference Board announced successive readings of 128.7, 128.0, and 126.4 for its consumer confidence index in April, May, and June, respectively.

6,7

Inflation pressure also mounted during the quarter. The headline Consumer Price Index showed a 2.5% annualized gain through April, and that increased to 2.8% in May; core consumer prices were up 2.1% in a year through April; then, 2.2% as of May. Yearly wholesale inflation jumped from 2.6% in April to 3.1% in May.

5

Even with those production costs rising, the manufacturing and service sectors of the economy continued their fast growth. The Institute for Supply Management’s factory purchasing manager index improved from 57.3 in April to 58.7 in May, and its service sector PMI also rose across those two months, ascending from 56.8 to 58.6. (At the top of July, more good news rolled in: the factory PMI had climbed to 60.2 in June.) Perhaps these readings would decline in summer, as the federal government reported hard goods orders declined 1.0% in April and 0.6% in May.

4,5

Unemployment declined even further in the second quarter. The headline rate was just 3.9% in April, and it ticked down to 3.8% a month later. In tandem, the U-6 rate, encompassing underemployed workers, fell to 7.6% in May from 7.8% in April. April brought 159,000 net new jobs to the economy, and the Department of Labor said that 223,000 more were created in May.

5

In late June, the Bureau of Economic Analysis concluded that the economy grew at a middling 2.0% annual pace in Q1. That was still the best first-quarter number since 2015. As the third quarter started, the Federal Reserve Bank of Atlanta’s GDPNow model estimated 3.8% GDP for Q2 (the estimate had been up at 4.8% as recently as June 14).

4,8

 

GLOBAL ECONOMIC HEALTH

China is coping with U.S. tariffs at an inopportune time. While its official growth target of 6.5% for 2018 may still be met, several signs point to its economy decelerating. Through May, its annualized retail sales pace was the slowest in 15 years, and its year-over-year export growth slipped from 3.7% in April to 3.2% in May. Fixed asset investment growth also tailed off to an 18-month low in the quarter. Given that consumer spending, capital investment, and exports are the pillars of the nation’s economy, this news was troubling. Additionally, the yuan hit a 6-month low versus the dollar in May. China’s central bank had been tightening in step with the Federal Reserve, but it broke ranks in Q2 and left its benchmark interest rate unchanged; it also cut its reserve requirement ratio for commercial banks by 1% in April and another 0.5% in June. Japan, meanwhile, warned the U.S. that it could impose import taxes of its own on U.S. products, especially if the Trump administration announced car tariffs in addition to the existing levies on steel and aluminum from Japan.

9,10

The European Union held its breath as power struggles played out in Italy and Spain: the ascension of the Five-Star Movement and League party in the former country, the replacement of one Prime Minister (Mariano Rajoy) with another (Pedro Sanchez) in the latter. So far, neither country has made noise about exiting the euro. Eurozone yearly inflation accelerated during the quarter, reaching 1.9% in May – the most in 13 months, just beneath the European Central Bank’s 2.0% target. This was a factor contributing to the sunset of the ECB’s longstanding asset-purchase campaign. The ECB announced it will gradually phase out this effort in the fourth quarter and stop buying bonds entirely in 2019. At their June 14 meeting, ECB policymakers also pledged to hold interest rates at current levels through the summer of 2019.

11

 

WORLD MARKETS

The MSCI Emerging Markets index took it on the chin during the quarter: it slipped 8.66% (and was down 7.68% after six months of 2018). The MSCI World index, on the other hand, gained 1.09% in three months.

12

 

How did other major benchmarks do in the quarter? Results were mostly positive. The winners included the CAC 40 in France, +3.02%; the United Kingdom’s FTSE 100, +8.22%; Japan’s Nikkei 225, +3.96%; India’s Sensex, +7.45%; Australia’s All Ordinaries, +6.89%; Canada’s TSX Composite, +5.92%. The losers included the German DAX index, -0.82%; Hong Kong’s Hang Seng, -3.78%; China’s Shanghai Composite, -10.14%.

13

 

COMMODITIES MARKETS

WTI crude soared 18.42% in the second quarter, leading all commodities except for the international oil benchmark, Brent crude (up 18.92%). WTI crude ended the quarter at $74.25, with supply concerns pushing up the NYMEX price by about $10 during the second half of June alone. Other notable Q2 gains: orange juice, 12.72%; lumber, 12.64%; RBOB gasoline, 9.70%; wheat, 6.19%; the U.S. Dollar Index, 5.56%; cotton, 4.38%; natural gas, 3.85%; palladium, 3.02%.

14,15

Numerous commodities suffered Q2 setbacks. Some of the significant losses: silver, 1.53%; copper, 3.73%; cocoa, 4.18%; sugar, 4.82%; coffee, 7.24%; gold, 7.25%; platinum, 8.60%; corn, 11.61%; soybeans, 18.66%. Gold finished the quarter at $1,254.20 on the COMEX; silver, at $16.06.

14,15

 

REAL ESTATE

Once again, mortgage rates ascended. As a look at Freddie Mac’s March 29 and June 28 Primary Mortgage Market Surveys shows, interest rates on adjustable-rate home loans made the biggest move. The mean rate on a 5/1-year ARM was 3.66% on March 29, but 3.87% on June 28. Rates on 30-year FRMs averaged 4.55% in the June 28 PMMS, up from 4.44% in late March. Regarding the refinancer’s favorite, the 15-year FRM, the story was similar: a 3.90% mean interest rate on March 29, a 4.04% mean rate on June 28.

16

With the housing market presenting buyers with gradually rising mortgage rates, thin inventory, and high prices, it is little wonder that the pace of home buying decelerated in Q2. The National Association of Realtors found sales slowing 2.7% in April, and then another 0.4% in May. NAR’s pending home sales index, the nation’s top measure of housing contract activity, also weakened. It retreated 1.3% in April and then 0.5% a month later.

4,5

As for new home sales, the story told by Census Bureau reports was slightly different. They were up 14.1% year-over-year through May; they fell 3.7% in April, but surged 6.7% a month later. The median sale price had declined $10,600 in 12 months to $313,000, and the inventory of new homes on the market actually grew 1% from April to May.

17

Groundbreaking, as tracked by the Census Bureau, increased 5.0% for May after a 3.1% reversal during April. Building permits fell 1.8% for April and 4.6% a month afterward.

5

 

 

T I P   O F   T H E   Q U A R T E R

 

Are you a freelancer?

Here is a mid-year reminder

 

to get ready for taxes. See if you can calculate how much you’ll have to pay the I.R.S. in April 2018. Start setting aside a little money per month, so that you can pay the bill with ease.

 

 

LOOKING BACK… LOOKING FORWARD

The small caps came in first in the second quarter: the Russell 2000 rose 7.43% to 1,643.07. After its sizable Q2 advance, the Nasdaq Composite stood at 7,510.30. The Dow ended the quarter at 24,271.41, the S&P 500 at 2,718.37. The CBOE VIX? The stock market’s primary fear gauge settled at 16.09 on June 29, down 19.43% in three months.

1

 

% CHANGE

YTD

Q2 CHG

1-YR CHG

10-YR AVG

DJIA

-1.81

0.70

14.02

11.38

NASDAQ

8.79

6.33

22.23

22.75

S&P 500

1.67

2.93

12.34

11.24

 

 

 

 

 

REAL YIELD (%)

6/29 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.74

0.55

0.53

1.48

 

Sources: wsj.com, bigcharts.com, treasury.gov – 6/29/18

1,18,19,20,21

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

So, what could this third quarter hold for equities? Can the market retain its upward bias, maybe even strengthen it as the summer proceeds? It is possible, but bulls will have to overcome some big factors: the major headwinds from the multinational tariffs fight, perceptions that growth may be slowing or moderating in China and the European Union, rising inflation, and the ongoing normalization of monetary policy by the Federal Reserve. Then again, the recent ISM PMIs, consumer confidence surveys, the labor market, and decent-to-good retail sales and consumer spending figures seemed to affirm the economy’s health this spring; the first estimate of Q2 GDP may also impress investors. In addition, the Fed’s monetary policy remains essentially supportive. If the trade battles continue to siphon enthusiasm from Wall Street, however, bulls may trot to the sidelines and stay there for much of the quarter.

 

 

Q U O T E   O F   T H E   Q U A R T E R

 

Politeness and consideration

 for others is like investing pennies and getting dollars back.”

Thomas Sowell

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com BeckettFinancialGroup.com

 

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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. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. The MSCI Emerging Markets Index is a float-adjusted market capitalization index consisting of indices in more than 25 emerging economies. The MSCI World Index is a free-float weighted equity index that includes developed world markets, and does not include emerging markets. The CAC-40 Index is a narrow-based, modified capitalization-weighted index of 40 companies listed on the Paris Bourse. The FTSE 100 Index is a share index of the 100 most highly capitalized companies listed on the London Stock Exchange. Nikkei 225 (Ticker: ^N225) is a stock market index for the Tokyo Stock Exchange (TSE).  The Nikkei average is the most watched index of Asian stocks. BSE Sensex or Bombay Stock Exchange Sensitivity Index is a value-weighted index composed of 30 stocks that started January 1, 1986. The All Ordinaries (XAO) is considered a total market barometer for the Australian stock market and contains the 500 largest ASX-listed companies by way of market capitalization. The S&P/TSX Composite Index is an index of the stock (equity) prices of the largest companies on the Toronto Stock Exchange (TSX) as measured by market capitalization. The DAX 30 is a Blue Chip stock market index consisting of the 30 major German companies trading on the Frankfurt Stock Exchange. The Hang Seng Index is a free float-adjusted market capitalization-weighted stock market index that is the main indicator of the overall market performance in Hong Kong. The SSE Composite Index is an index of all stocks (A shares and B shares) that are traded at the Shanghai Stock Exchange. The Russell 2000 Index is a small-cap stock market index of the bottom 2,000 stocks in the Russell 3000 Index. The CBOE Volatility Index

®

is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

 

CITATIONS:

1 – quotes.wsj.com/index/SPX [6/29/18]

2 – marketwatch.com/story/trade-war-tracker-here-are-the-new-levies-imposed-and-threatened-2018-06-22 [6/22/18] 

3 – forbes.com/sites/advisor/2018/06/19/fed-now-hinting-at-four-potential-rate-hikes-in-2018/ [6/19/18]

4 – marketwatch.com/economy-politics/calendars/economic [6/29/18]

5 – investing.com/economic-calendar/ [6/30/18]

6 – ycharts.com/indicators/consumer_sentiment [7/2/18]

7 – investing.com/economic-calendar/cb-consumer-confidence-48 [7/2/18]

8 – forbes.com/sites/chuckjones/2018/07/01/second-quarter-u-s-gdp-growth-forecast-drops-1-in-two-weeks/ [7/1/18]

9 – scmp.com/week-asia/opinion/article/2153142/trade-war-looms-us-looks-confident-china-not-so-much [6/30/18]

10 – tinyurl.com/yafqsgwk [6/29/18]

11 – focus-economics.com/regions/euro-area [6/27/18]

12 – msci.com/end-of-day-data-search [6/29/18]

13 – news.morningstar.com/index/indexReturn.html [6/30/18]

14 – barchart.com/futures/performance-leaders?viewName=chart&timeFrame=3m [7/1/18]

15 – money.cnn.com/data/commodities/ [6/29/18]

16 – freddiemac.com/pmms/archive.html [7/2/18]

17 – tradingeconomics.com/united-states/new-home-sales [6/25/18]

18 – markets.wsj.com/us [6/29/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F29%2F17&x=0&y=0 [6/29/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F29%2F17&x=0&y=0 [6/29/18]

 

19 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F29%2F17&x=0&y=0 [6/29/18]

 

19 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F30%2F08&x=0&y=0 [6/29/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F30%2F08&x=0&y=0 [6/29/18]

19 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F30%2F08&x=0&y=0 [6/29/18]

20 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/29/18]

21 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/29/18]

 

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Weekly Economic Update for July 9, 2018

In this week’s recap: impressive hiring, healthy service and factory sectors, the Fed’s view of the present and near future, and gains for equities.

Weekly Economic Update

 

Presented by JB Beckett, July 9, 2018

 

another STRONG MONTH FOR THE LABOR MARKET

Employers hired 213,000 more workers than they laid off in June, according to the Department of Labor. Analysts surveyed by Bloomberg had forecast a gain of 195,000. In the second quarter, net monthly job growth averaged 211,000. As the labor force participation rate increased 0.2% last month, so did the headline jobless rate: it rose 0.2% to 4.0%, moving north for the first time in almost a year. The U-6 rate, which includes underemployed Americans, also increased 0.2% to 7.8%. Annualized wage growth remained at 2.7%.

1

 

BOTH ISM INDICES IMPROVED IN JUNE

The Institute for Supply Management’s twin purchasing manager indices came in at or near 60, last month. ISM’s manufacturing gauge rose to 60.2 from the previous reading of 58.7; its service sector index increased 0.5% to 59.1. MarketWatch projected both PMIs at 58.3 for June.

2

 

FED MNUTES SHOW OPTMISM, CONCERNS

Minutes from the Federal Open Market Committee’s June policy meeting were released Thursday, and noted that the economy’s expansion is “progressing smoothly” and at “a solid rate.” Policymakers also had some downside risks on their minds, noting the “possible adverse effects of tariffs and other proposed trade restrictions” and “political and economic developments in Europe.” Some FOMC members were concerned that rapid growth could breed “heightened inflationary pressures” and “financial imbalances” that might eventually provoke “a significant economic downturn.”

3

 

TARIFFS TAKE EFFECT, BUT INVESTORS FOCUS ON FUNDAMENTALS

 

Strong jobs and manufacturing data helped to give the major indices a lift last week. In three-and-a-half trading days, the Nasdaq Composite advanced 2.37% to 7,688.39. Gaining 1.52%, the S&P 500 closed at 2,759.82, Friday; the Dow Jones Industrial Average rose 0.76% on the week to 24,456.48. Additionally, the Russell 2000 small-cap index improved 3.10% across the week to 1,694.05.

4

 

 

T I P   O F   T H E   W E E K

 

When was the last time you checked

 

the

beneficiary designations

on your IRA, your life insurance policy, or your brokerage account? If you have not looked at them in a few years, review them this week to make sure they are up to date.

 

 

THIS WEEK

Nothing major is slated for Monday. | Tuesday, PepsiCo shares Q2 results. | The June Producer Price Index appears Wednesday, plus earnings from Fastenal. | Investors will pay attention to the June Consumer Price Index and the latest initial unemployment claims figures on Thursday. | Friday, a new earnings season begins: Citigroup, JPMorgan Chase, PNC Financial Services Group, and Wells Fargo announce Q2 results, and in addition, the University of Michigan offers its initial July consumer sentiment index.

 

 

Q U O T E  O F  T H E  W E E K

 

“The end is nothing.

The road is all.

WILLA CATHER

 

 

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

-1.06

14.71

12.32

11.77

NASDAQ

11.37

26.26

24.19

24.27

S&P 500

3.22

14.53

13.82

12.04

 

 

 

 

 

REAL YIELD (%)

7/6 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.70

0.61

0.66

1.43

 

Sources: wsj.com, bigcharts.com, treasury.gov – 7/6/18

4,5,6,7

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

 

 

T H E   W E E K L Y   R I D D L E

 

Regina is about to meet her cousin Lydia for the first time. Regina has no idea what she looks like. She arrives at Lydia’s house at night. The door opens, and she sees a mail carrier, a UPS driver, and a police officer watching television. She immediately hugs Lydia.

How does she know which one of the three is her cousin?

 

LAST WEEK’S RIDDLE: You see them every day, but never together. They appear everywhere, but never at the same time. What are they?

ANSWER: Day and night.

 

 

JB Beckett may be reached at (803) 939-4848 or jb@beckettfinancialgroup.com BeckettFinancialGroup.com

 

Know someone who could use information like this?

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

 

 

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx® , and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

CITATIONS:

1 – fortune.com/2018/07/06/june-2018-jobs-report/ [7/6/18]

2 – marketwatch.com/economy-politics/calendars/economic [7/6/18]

3 – cnbc.com/2018/07/05/fed-meeting-minutes-from-june.html [7/5/18]

4 – markets.wsj.com/us [7/6/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F6%2F17&x=0&y=0 [7/6/18] 

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F6%2F17&x=0&y=0 [7/6/18]

 

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F6%2F17&x=0&y=0 [7/6/18]

 

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F5%2F13&x=0&y=0 [7/6/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F5%2F13&x=0&y=0 [7/6/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F5%2F13&x=0&y=0 [7/6/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F7%2F08&x=0&y=0 [7/6/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F7%2F08&x=0&y=0 [7/6/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F7%2F08&x=0&y=0 [7/6/18]

6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/6/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/6/18]

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