Another Week of Highs – October 2, 2017
Before we begin our usual weekly commentary, we wanted to take a moment to honor the victims of Sunday’s terrible attack in Las Vegas. Though details are still scarce, it is the most devastating mass shooting in U.S. history. Our thoughts are with the victims, their families, and with the community that now must cope with the aftermath of the tragedy. As we look for answers, let’s also remember to be grateful for the ones we love.
Last week’s final performance of Q3 saw the S&P 500 hit a new high and finish up 0.68%.1https://www.cnbc.com/2017/09/29/stock-markets-wrap-up-solid-third-quarter.html http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX®ion=usa&culture=en-US Meanwhile, the Nasdaq beat previous records with a 1.07% gain, and the Dow notched a 0.25% increase to come within 0.1% of its all-time high.2http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI®ion=usa&culture=en-US https://www.cnbc.com/2017/09/29/stock-markets-wrap-up-solid-third-quarter.html International markets, however, experienced a slight drop¾the MSCI EAFE fell 0.19% for the week.3https://www.msci.com/end-of-day-data-search
As the country continues its recovery from Hurricanes Harvey, Irma, and Maria, the economy keeps revealing positive strides. A few specific performance factors rounded out the week:
- Small Cap Gains Post Strong Returns
Small cap gains hit record highs last week.4https://www.cnbc.com/2017/09/28/us-stocks-open-lower-after-gop-tax-plan-reveal-interest-rates-eyed.html Some analysts think the gain is partially a result of President Trump’s proposed tax code changes¾which offers tax cuts to corporations and individuals.5https://www.cnbc.com/2017/09/28/us-stocks-open-lower-after-gop-tax-plan-reveal-interest-rates-eyed.html https://www.cnbc.com/2017/09/29/us-futures-point-to-cautious-open-concerns-over-trump-tax-proposals.html Because small cap companies often have limited international resources, they often benefit the most from tax cuts.6https://www.thestreet.com/story/14322912/1/small-cap-stocks-catch-fire-amid-trump-s-big-six-tax-cut-plan.html That said, rising interest rates and a higher dollar are also factors to take into account.7https://www.cnbc.com/2017/09/28/us-stocks-open-lower-after-gop-tax-plan-reveal-interest-rates-eyed.html
- Dollar Is On the Rise
The dollar index fell on Friday, but the buck still points towards weekly and monthly highs.8http://www.marketwatch.com/story/dollars-bouncing-but-dont-call-it-a-comeback-2017-09-29 Despite dipping after news of slow consumer spending, the greenback responded positively to increases in consumer sentiment and the Chicago Purchasing Managers Index.9https://www.cnbc.com/2017/09/28/dollar-set-for-best-weekly-gain-in-2017-euro-struggles.html The Chicago Purchasing Managers Index matters to investors because it measures manufacturing and non-manufacturing activity in the greater Chicagoland area. These numbers tend to closely mirror the rest of the country.10http://wsj-us.econoday.com/byshoweventfull.asp?fid=477952&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
- Corporate Earnings Hit New Highs
Corporate earnings are a signifier of how well corporate stocks perform. Last week, earnings posted back-to-back double-digit gains for the first time since 2011.11https://www.bloomberg.com/news/articles/2017-09-29/kindest-quarter-arrives-for-stock-market-that-nothing-can-rattle This performance helped push markets beyond geopolitical affairs and concerns from the recent devastation caused by hurricanes.12http://wsj-us.econoday.com/byshoweventfull.asp?fid=477756&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top https://www.bloomberg.com/news/articles/2017-09-29/kindest-quarter-arrives-for-stock-market-that-nothing-can-rattle
- What Is Ahead
Markets will continue to watch out for Harvey, Irma, and Maria’s influence on this week’s key economic reports. Analysts expect strong data from manufacturing to vehicle sales, though damages to ports may affect international trade.13http://wsj-us.econoday.com/byshoweventarticle.asp?fid=483784&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
Further, we are watching the Fed’s decisions to shrink its balance sheet and raise interest rates.14https://www.nytimes.com/2017/09/26/us/politics/janet-yellen-fed-interest-rates-inflation.html?_r=0 We will also continue following how President Trump’s recent announcement to possibly replace Fed Chair Janet Yellen (whose tenure ends in February) affects the markets.15https://www.cnbc.com/2017/09/29/kevin-warsh-is-far-from-a-lock-to-replace-janet-yellen-as-fed-chair.html
As always, we continue our focus on helping you meet your long-term goals. If you have any questions as to how last week’s news may affect your portfolio, let us know. We are here to answer questions and help your investment process run smoothly.
Monday: PMI Manufacturing Index, ISM Manufacturing Index, Construction Spending
Tuesday: Motor Vehicle Sales
Wednesday: ADP Employment Report, ISM Non-Mfg Index
Thursday: Factory orders
Friday: Employment Situation
Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance, S&P Dow Jones Indices and Treasury.gov. International performance is represented by the MSCI EAFE Index. Corporate bond performance is represented by the SPUSCIG. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
“Determine that the thing can and shall be done, and then we shall find the way.”
– Abraham Lincoln
1½ cup flour, plus 3 extra tablespoons
1 teaspoon seasoned salt
1 teaspoon lemon pepper
½ teaspoon cumin
¼ teaspoon cayenne pepper
Pinch of salt
Ground black pepper, to taste
8 thin, bone-in pork chops
¼ cup olive oil
7 tablespoons butter
1 large onion, peeled and sliced
1 green bell pepper, seeded and sliced
1 yellow bell pepper, seeded and sliced
1 red bell pepper, seeded and sliced
2 cups chicken broth, plus extra on hand for thinning (if needed)
2 tablespoons cream
- Combine flour, seasoned salt, lemon pepper, cumin, cayenne pepper, salt, and black pepper in a pie plate.
- Dredge each pork chop in flour mixture.
- Add olive oil and 4 tablespoons of butter to a heavy skillet, and heat on medium.
- Fry each pork chop until browned, about 2 minutes on each side, and remove seared chops from skillet. Cover the pork chops to keep them warm.
- Toss onions and peppers in the same skillet and cook them for about 10 minutes, stirring as needed. Once cooked, remove from skillet and set aside.
- Place 3 tablespoons butter and 3 tablespoons flour in the same skillet, and whisk together until they form a paste (roux).
- Cook the roux until it becomes a dark gold, stirring consistently for about 2 minutes.
- Add broth to the roux by gradually whisking in small amounts in batches. Whisk out the lumps and then add the 2 tablespoons of cream.
- Pour in more broth to thin out the gravy if it becomes too thick. Add salt and pepper to taste, if needed.
- Toss the cooked onions and peppers in the gravy, coating them completely.
- Serve pork chops and spoon the gravy on top.
Recipe adapted from The Pioneer Woman16http://thepioneerwoman.com/cooking/smothered-pork-chops/
Deducting Moving Expenses Related to a New Job
Moving into a new home can bring many expenses that quickly add up. However, if you had to relocate for a new job, you may be able to deduct some of your moving costs.
What homes can you deduct?
You can only deduct moving expenses related to your main home. Seasonal or second homes that taxpayer or family members own aren’t included in the possible deductions.
How far must you travel to be able to claim deductions?
To be eligible for deductions, your new job must be at least 50 miles farther away from your previous home than your former job.
What expenses can you claim?
You can only claim expenses that the IRS deems as “reasonable” and related to moving for a new job. These costs can include:
- Lodging you needed when traveling to your new home
- Items your employer did not reimburse you for that relate to packing, shipping, storing, and insuring your household goods while moving
Other details may apply, and you can find more information on the IRS website.
* This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.
Tip courtesy of IRS.gov17https://www.irs.gov/newsroom/moving-expenses-may-be-deductible
Find the Fairway by Tidying Up Your Grip
If you want to keep your score low, hitting the fairway is key—especially if you have a high handicap. However, golfers who have difficulty driving tend to have an outside-in swing, which can cause everything from pop-ups to slices to cuts. One way you can overcome this challenge is by tidying up your grip.
Consistent swings rely on the position of your hands on the handle. You can tidy up your grip by doing the following:
- Focus on keeping your grip more in your fingers.
- Check that your thumb and index finger on each hand form a V-shape that points at your right shoulder.
Setting up your grip in this manner does three things for your swing. You will:
- Create the proper position at address.
- Control how your hands move through impact by governing your release, turn, and roll.
- Avoid collapsing your wrist, which keeps you from over- or under-rotating your handle.
Tip courtesy of Chuck Winstead | Golf Tips Magazine18https://www.golftipsmag.com/instruction/driving/easy-drives/
Tips to Help Manage Insomnia
Insomnia is a medical condition that leaves people unable to fall asleep, which can lead to a variety of other health problems, such as high blood pressure and heart attacks. While a sleep specialist can help you troubleshoot how to medically manage insomnia, you can also do some things at home to encourage a restful night’s sleep. Here are three self-care techniques to help you manage your insomnia.
- Exercise Earlier in the Day: Getting regular exercise can help you sleep better, but it is more beneficial when you do so earlier in the day. Since you mentally stimulate your brain, you’ll become more alert after exercising. Your body temperature also increases—and can stay that way for up to 6 hours. As a general rule, aim to exercise at least 2 to 3 hours before your normal bedtime.
- Leave the Bed: If you’re tossing and turning, staying in bed can often continue the cycle. Instead, try leaving your bedroom and doing a quiet activity, such as reading or listening to calm music. This choice can help you wind down while keeping you from associating your bedroom with wakefulness.
- Avoid the TV and Computer: At bedtime, your melatonin levels should rise and help you feel tired. However, when you watch TV or work on a computer, the noise and light can decrease the amount of melatonin in your brain. By turning off the screens, you will help your body create the hormones you need to feel fatigue and fall asleep.
Tips courtesy of WebMD19http://www.webmd.com/sleep-disorders/living-with-insomnia-11/slideshow-insomnia
Bathroom Items to Swap for Zero Waste
The average American throws away 4.5 pounds of trash every single day. This garbage easily piles up in our landfills, unable to break down or needing hundreds of years to do so. You can make simple swaps in your bathroom items that will help you support a zero-waste lifestyle and avoid sending trash to the landfill. Here are some common bathroom items you can swap today:
- Handkerchiefs Instead of Tissues: Rather than using disposable tissues, use a handkerchief instead. You can reuse them by boiling them in hot water to kill any bacteria and drying them afterward.
- Bamboo Toothbrush Instead of Plastic Toothbrush: The standard toothbrush on the market relies on plastic, which will never biodegrade. Opt for a bamboo toothbrush instead, which is 100% biodegradable and also eco-friendly.
- Bulk Shampoo Instead of Packaged Shampoo: Your local health food store will typically sell shampoo in bulk. When buying, you can fill a reusable container and ditch the single-use plastic bottles necessary for packaged shampoo.
Tip courtesy of Care2.com20http://www.care2.com/greenliving/5-zero-waste-swaps-to-make-in-your-bathroom.html
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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia and Southeast Asia.
The S&P U.S. Investment Grade Corporate Bond Index contains U.S.- and foreign-issued investment-grade corporate bonds denominated in U.S. dollars.
The SPUSCIG launched on April 09, 2013. All information for an index prior to its Launch Date is back-tested, based on the methodology that was in effect on the Launch Date. Back-tested performance, which is hypothetical and not actual performance, is subject to inherent limitations because it reflects application of an Index methodology and selection of index constituents in hindsight. No theoretical approach can take into account all of the factors in the markets in general and the impact of decisions that might have been made during the actual operation of an index. Actual returns may differ from, and be lower than, back-tested returns.
The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
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