Mixed Markets Continue – June 19, 2017
Markets remained mixed last week as the Dow closed at another record high, while the NASDAQ fell and the S&P 500 held steady.1http://www.cnbc.com/2017/06/16/us-stocks-housing-amazon-whole-foods.html By Friday, the Dow gained 0.52%, the NASDAQ fell -0.92%, and the S&P 500 gained a slight 0.05%.2http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI®ion=usa&culture=en-UShttp://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCOhttp://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX®ion=usa&culture=en-US Meanwhile, the MSCI EAFE remained virtually unchanged from last week, down only -0.002%.3https://www.msci.com/end-of-day-data-search
In other markets, oil closed at $44.74 a barrel, down 2.4% on the week—its fourth week of declines.4http://www.cnbc.com/2017/06/15/oil-sits-near-half-year-lows-as-global-supply-overhang-weighs.html Overall, European equity markets remained steady while most Asian markets recorded modest gains at week’s end.5http://www.cnbc.com/2017/06/16/european-markets-seen-higher-nestle-sale-boj-keeps-policy-unchanged.htmlhttp://www.cnbc.com/2017/06/15/asia-markets-tech-stocks-bank-of-japan-in-focus.html
The Fed Increases Interest Rates
As expected, the Fed announced last week that it raised the short-term interest rate target by 25 basis points to a range between 1.00 and 1.25%.6http://wsj-us.econoday.com/byshoweventfull.asp?fid=475714&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#topThis was the third interest rate hike by the Fed in the last six months.7http://www.reuters.com/article/us-usa-fed-idUSKBN1972QL The Fed also announced its intention to reduce the $4.5 trillion balance sheet by selling off assets acquired in the wake of the 2008 financial crisis.8http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482058&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#topThe Fed currently plans to sell approximately $10 billion monthly starting later this year.9http://money.cnn.com/2017/06/15/investing/premarket-stocks-trading/index.html
Further, last Wednesday, Federal Reserve Chair Janet Yellen reported on the Fed’s belief that the current weak inflation numbers are temporary.10http://www.reuters.com/article/us-usa-fed-idUSKBN1972QL However, the Fed’s plan to continue raising interest rates going forward and sell off its assets may change if the economy does not gain momentum in Q3 and Q4. To date, the economic data continues to point to a Q2 Gross Domestic Product (GDP) that may be weaker than previously anticipated.11http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482058&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
Soft Economic Data Continues
Consumer Sentiment Dampens: The preliminary consumer sentiment index for June dropped to 94.5, the lowest since last November. The index fell from May’s reported 97.1.12http://wsj-us.econoday.com/byshoweventfull.asp?fid=477845&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
Retail Sales Soften: Retail sales had their largest monthly drop since January 2016.13http://www.cnbc.com/2017/06/16/us-stocks-housing-amazon-whole-foods.html Sales declined 0.3% in May against predictions of a 0.1% gain over April. The report includes a variety of disappointing numbers14http://wsj-us.econoday.com/byshoweventfull.asp?fid=477712&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top:
- 1% decrease for restaurants
- 2% dip for automotive vehicles
- 0% fall for department stores
Business Inventories Drop: In April, business inventories dropped 0.2% from the prior month, which was 0.1% under the consensus. Further, retail inventories also dropped 0.2%, and wholesale inventories abruptly fell 0.5% for the month.15http://wsj-us.econoday.com/byshoweventfull.asp?fid=477804&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
CPI Falls: The Consumer Price Index fell 0.13% in May.16http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482058&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top The disappointing numbers mark another decline—the 2nd in 3 months—as economists had expected a 0.2% increase from April’s number.17http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482058&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#tophttp://www.cnbc.com/2017/06/16/us-stocks-housing-amazon-whole-foods.html
Housing Weakens: In May, housing starts dropped 5.5% from April and permits fell 4.9%. The trend continues the decline from Q1 and could signal another negative quarter.18http://wsj-us.econoday.com/byshoweventfull.asp?fid=477688&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
Market Details on the Horizon
More housing news will influence the week ahead as the existing home sales report comes out on Wednesday and the new home sales report comes out on Friday. Markets will continue to watch the fundamentals, including consumer spending, which makes up 69% of GDP. So far this year, consumer spending has been soft with vehicle sales and restaurant sales sliding downward most months.19http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482058&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
CEO, Managing Director
MGO | Wealth Advisors
Wednesday: Existing Home Sales
Thursday: Jobless Claims
Friday: PMI Composite Flash, New Home Sales
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.
“I think a hero is an ordinary individual who finds the strength to persevere and endure in spite of overwhelming obstacles.”
– Christopher Reeve
Peanutty Edamame and Noodle Salad
A flavorful stir-fry.
24 ounces shirataki noodles, rinsed and drained
3 cups edamame, shelled
2 cups corn
½ cup peanut butter
½ cup rice vinegar
1 TBSP Sriracha hot sauce, plus an additional amount for serving
2 TBSP water
½ tsp salt
3 cups carrots, shredded
1 pint grape tomatoes, halved
1 medium Granny Smith apple, quartered and sliced thinly
½ cup fresh cilantro, chopped
- Bring a large pot of water to a boil.
- Toss in the shirataki noodles, edamame, and corn. Boil for 2 minutes, and then rinse and drain the noodles.
- Whisk the peanut butter, hot sauce, rice vinegar, water, and salt in a large bowl.
- Add carrots, tomatoes, apple slices, cilantro, and noodle mixture into the bowl.
- Toss the items together until completely combined.
- Serve with the Sriracha hot sauce.
Recipe adapted from Good Housekeeping20http://www.goodhousekeeping.com/food-recipes/healthy/a42200/peanutty-edamame-and-noodle-salad-recipe/
Manage Your Tax Liabilities with an Installment Agreement*
When you owe substantial tax funds, an installment agreement can help you settle your debt with the IRS. Here’s some insight into how the agreement works.
How do you enter an Installment Agreement?
You must first file all your required tax returns and supporting documents. From there, you can apply online to enter an installment agreement through the IRS Online Payment Agreement tool.
How do the payments work?
If the IRS approves your installment agreement, you will make a required payment each month until you settle your debt.
Who is eligible?
Individuals and businesses can both enter an Installment Agreement, if approved.
- Individuals: Owe $50,000 or less, including combined taxes, penalties, and interest.
- Businesses: Owe $25,000 or less in the current or previous filing year, including combined taxes, penalties, and interest.
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 that you discuss your specific tax issues with a qualified tax advisor.
Tip courtesy of IRS.gov21https://www.irs.gov/uac/tips-for-taxpayers-who-owe-taxes
Practice Your Rhythm with the Driver
Losing control of your ball? Not solidly hitting? More than likely, you’re hitting the ball with a backswing that’s faster than your downswing. To improve your shot, you need to find your rhythm so you gain speed without sacrificing contact. In short, you need to finish your backswing.
Rather than strike the ball in a weak position that relies on your hands and arms, you need to wind up your power from behind the ball. The goal is to make sure your swing remains smooth and deliberate.
Fine-Tune Your Drive
To practice finding your rhythm, focus on your swing’s speed and control with the following technique:
Step 1: Tee up three balls in a row.
Step 2: Hit the first ball.
Step 3: Step up immediately to the next ball, and hit it without pausing.
Step 4: Step up again, and immediately hit the next ball.
Step 5: Repeat the sequence, without taking breaks in between each swing.
This back-to-back practice will help you stay in balance without over-swinging and allow you to internalize your rhythm and flow. Concentrating on this feeling will enable you to hit more shots in the center of the clubface and maximize your speed.
Tip courtesy of Golf Digest22http://www.golfdigest.com/story/butch-harmon-finding-your-rhythm-with-the-driver
Improve Your Bone Health With These Exercises
As we age, our bone health can decrease and result in osteoporosis. And the condition is widespread: In the United States, 54 million Americans suffer from low bone density or osteoporosis.23https://www.nof.org/preventing-fractures/general-facts/http://www.webmd.com/osteoporosis/ss/slideshow-exercise-to-boost-bone-health While encouraging strong bones earlier in life is important for avoiding osteoporosis, you can take steps today to improve your bone health. Here are some helpful exercise tips for you to keep in mind:
- Engage in weight-bearing exercises: When we stand, the force of gravity on our legs and feet encourages our bodies to build more cells, thus strengthening our bones. Of course, consult your doctor to ensure any exercises support your specific health condition.
- Dance more: When you dance, you increase your pulse and remain on your feet. Dancing provides a well-rounded workout and strengthens your heart, muscles, and bones.
- Improve your balance: Falling and shattering bones is a real problem with osteoporosis. You can help avoid this catastrophe by exercising in ways that focus on improving your balance, such as Tai Chi.
Tip courtesy of WebMD23
Minimize Water Consumption by Reusing Rain Water
Using rainwater for daily household chores can help cut down on your water bill and conserve how much tap water you consume. Generally, rain water is clean and safe to use for both indoor and outdoor water needs. Rainwater that hasn’t run down your house’s roof typically has fewer chemicals than the treated water you purchase in your utilities. To help reduce your utility water consumption, here are some ways to reuse rain water at home:
- Water your yard and gardens: Rain barrels are a popular way to collect rainwater for watering lawns and gardens, and you also can connect them to an irrigation system. Planting garden beds along your driveway’s edge or at the bottom of a hill can also use rain’s natural flow to keep the plants watered.
- Flush your toilet: In America, toilets use nearly 27% of our home water usage. You can swap some of this consumption by rerouting rainwater to your toilet. To do so, install piping that connects rainwater to your toilet’s plumbing.
- Wash automobiles and equipment: When you don’t treat the rainwater, it’s also great to use for washing vehicles and equipment like garden tools.
Tip courtesy of Care2.com24http://www.care2.com/greenliving/10-uses-for-rainwater.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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