Markets March Ahead

The Weekly Update

Week of July 31, 2017

By Christopher T. Much, CFP®, AIF®

Last week, markets marched ahead within a busy reporting week. The Dow rose 1.16% to close Friday on another new high. The S&P 500 notched a record high during the week, despite closing the week slightly down 0.02%. Meanwhile, the NASDAQ slipped 0.20%, and the MSCI EAFE rose 0.21%.

Generally strong corporate earnings reports helped markets continue to hit highs. The majority of companies that have posted Q2 earnings so far have beaten their estimates. Those earnings performances helped push financials, materials, and energy stocks up by over 1% early in the week. Health care companies also posted substantial earnings as S&P 500 health care stocks have risen 16% this year. Health insurer stocks have also increased by 22%.

Additionally, Q2 Gross Domestic Product (GDP), consumer confidence, exports, housing, and oil all reported noteworthy developments.

A Rundown of Last Week’s Developments

  • Solid GDP Performance: For the second quarter, GDP came in at a 2.6% annualized rate—one of the strongest quarters in the last 2 years. GDP growth was based on robust consumer spending for durable and nondurable goods. In addition, business investment hit a solid 5.2% annualized increase for the quarter.
  • Healthy Consumer Confidence: Consumer confidence remains quite high with the index rising in July almost 4 points to 121.1. The index beat the optimistic estimate of 118 and has jumped approximately 20 points since last November’s election, staying near March’s 17-year high of 124.9. In addition, the consumer sentiment index moved up modestly the last two weeks of July to end at 93.4.
  • Decent Export and Import Numbers: Food products and capital goods helped exports rise by 1.4% in June. Further, wholesale and retail inventories both jumped 0.6%. Imports, however, fell 0.4% on lower industrial supplies and consumer goods.
  • Mixed Home Sales: A tight labor market and low mortgages continue to spur demand for housing. In June, new home sales recorded a strong 610,000 annualized rate. Meanwhile, existing home sales dropped 1.8% in June to an annualized rate of 5.5 million, which was lower than anticipated. Existing home prices, however, were up 6.5% year-over-year, with a median price of $263,800.
  • Better Oil Prices: Oil prices rose this week, hitting the highest weekly percentage gains this year. Prices strengthened with news of shrinking U.S. crude and gas inventories, along with foreign efforts to reduce output.

What Lies Ahead

The Fed observed in its meeting last week that risks to the economic outlook seem stable. In its analysis of the economy, the Fed pointed to moderate economic growth, a sturdy employment environment, and positive business investments. As expected, the Fed did not increase interest rates but suggested that unwinding its $4.5 trillion balance sheet could begin as early as September.

This week will again offer key economic data to help provide a better understanding of market performance in June and early indicators for July. As always, we are here to answer any questions you may have about our economy and your financial life.

ECONOMIC CALENDAR

Monday: Pending Home Sales Index
Tuesday: Motor Vehicle Sales, Personal Income and Outlays, PMI Manufacturing Index, Construction Spending
Wednesday: ADP Employment Report
Thursday: Factory Orders
Friday: Employment Situation, International Trade

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US
https://www.cnbc.com/2017/07/28/us-stocks-tech-amazon-gdp.html
http://www.cnbc.com/2017/07/25/us-stocks-earnings-fed-caterpillar-mcdonalds.html
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
https://www.msci.com/end-of-day-data-search
https://www.cnbc.com/2017/07/25/us-stocks-earnings-fed-caterpillar-mcdonalds.html
https://www.bloomberg.com/news/articles/2017-07-27/obamacare-chaos-in-washington-leaves-health-investors-unfazed?cmpid=BBD072717_MKT&utm_medium=email&utm_source=newsletter&utm_term=170727&utm_campaign=markets
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482414&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477653&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477926&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477848&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=478559&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477962&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477938&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
https://www.cnbc.com/2017/07/27/oil-climbs-for-sixth-day-near-8-week-highs-on-us-crude-stock-declines.html
https://www.bloomberg.com/news/articles/2017-07-26/dollar-drops-bonds-climb-on-fed-s-inflation-view-markets-wrap
http://wsj-us.econoday.com/byshoweventfull.asp?fid=475715&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
https://www.cnbc.com/2017/07/26/fed-leaves-rates-unchanged.html?__source=newsletter%7Ceveningbrief
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482414&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
Markets March Ahead2017-08-08T10:33:31-04:00

CTS Financial Group Ranked in Financial Advisor Magazine 2017

FA’s 2017 Annual RIA Ranking

CTS is honored to be mentioned in the July edition of Financial Advisor Magazine’s RIA Survey & Ranking 2017 – tens of thousands of RIA’s nationwide were surveyed and narrowed down to a list of less than 700.

“CTS is very pleased to be recognized in this ranking, and is proud to be included among a list of respected Registered Investment Advisors from across the United States,” says Christopher T. Much, CFP®, AIF®.

CTS Financial Group Ranked in Financial Advisor Magazine 20172017-07-31T18:00:04-04:00

Strong Stocks & A Falling Dollar

The Weekly Update

Week of July 24, 2017

By Christopher T. Much, CFP®, AIF®

Last week, the Dow, S&P 500, and NASDAQ again hit record highs. The midweek peaks fell by Friday, though market performance remained strong. By week’s end, the Dow dropped 0.27%, and the S&P 500 and NASDAQ dipped on Friday but closed up 0.54% and 1.19%, respectively. The MSCI EAFE finished with a 0.46% increase.

Corporate Earnings Drive Growth

Analysts noted that stocks were particularly “strong” last week due to generally robust Q2 corporate earnings reports. With roughly 20% of S&P 500 companies reporting, corporate earnings should remain solid through the quarter. So far, 73% of reporting companies beat their estimated earnings per share, and 77% have higher-than-expected sales against a 5-year average.

Weakened Dollar Continues

The dollar continued its downward trend, dropping 1.3% during the week. So far, our currency has fallen 8.1% since the start of 2017. A weakening dollar will boost companies with exports or overseas business. As such, the U.S. consumer will take a hit, since a falling dollar causes price increases on imported goods. The latest fall started last week after the Fed expressed concerns over low inflation.

By and large, European markets reacted negatively to the falling U.S. dollar, and uneven EU corporate earnings reports did not help either. With the euro’s value against the dollar rising to its highest point since January 2015, the value of EU company exports and overseas earnings measured in dollars will fall.

Other Key Market Developments

Here are some other key developments in fundamentals from last week:

  • Housing Tensions Relax: Housing starts jumped to a 1.215 million annual rate, the first gain in three months. Similarly, housing permits increased to a 1.254 million rate, the strongest numbers since March. Homebuilders are cautious, however, with the Housing Market Index and Components falling 3 points in July. The rising cost in lumber—due to tariffs on Canadian softwood—has builders concerned, as homebuyers will ultimately pay higher prices.
  • Jobless Claims Fall: July’s employment numbers look hopeful as the initial jobless claims for the week of July 15 dropped to 233,000, far below the consensus estimate of 246,000. The numbers should help lower July’s overall unemployment rate and suggest that—despite low wages and productivity—labor demand remains high.
  • Oil Prices Drop: Oil prices fell over 2% on July 21, after reaching a 6-week high earlier in the week. The drop followed news that OPEC increased July production by 145,000 barrels daily while U.S. stockpiles largely decreased, contributing to the temporary price hikes.

A Busy Week Ahead

This week will be busy. More housing news starts the week, and expect Wednesday’s Fed meeting to get some attention, though interest rates should not increase. Further, Friday’s Gross Domestic Product (GDP) Price Index and Consumer Sentiment Index will be of interest to markets.

Though the news from Washington can dominate the headlines, remaining focused on key drivers of market performance is key. Contact us if you have questions as to how the past week’s markets may influence your portfolio. We are always happy to help.

ECONOMIC CALENDAR

Monday: Existing Home Sales
Tuesday: FHFA House Price Index, Consumer Confidence Index
Wednesday: New Home Sales
Thursday: Durable Goods Orders, International Trade In Goods, Jobless Claims, Chicago Fed National Activity Index
Friday: GDP, Employment Cost Index, Consumer Sentiment

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
http://www.cnbc.com/2017/07/21/us-stocks-ge-drops-earnings-season-oil.html
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
https://www.msci.com/end-of-day-data-search
http://www.cnbc.com/2017/07/21/us-stocks-ge-drops-earnings-season-oil.html
http://www.investopedia.com/articles/economics/09/how-us-benefits-when-dollar-falls.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482387&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://www.cnbc.com/2017/07/20/bottom-falling-out-of-us-dollar-drops-to-near-2-year-low-vs-the-euro.html
https://www.bloomberg.com/news/articles/2017-07-20/dollar-remains-weak-as-u-s-politics-steals-show-markets-wrap
http://www.investopedia.com/articles/economics/09/how-us-benefits-when-dollar-falls.asp?ad=dirN&qo=investopediaSiteSearch&qsrc=0&o=40186
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482387&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477455&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482387&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
Strong Stocks & A Falling Dollar2017-07-24T16:22:25-04:00

6 Important Financial Strategies for Your 20’s and 30’s

6 Important Financial Strategies for Your 20’s and 30’s

At CTS, we realize that retirement for the Baby Boomer generation likely looks very different than it will for Gen X and Gen Y. In lieu of pension plans and other traditional benefits that Boomers may have access to, Gen X and Gen Y will likely have to rely on personal savings and investments. As a result, financial planning will take on increased importance. In addition, medical advances mean that average life spans are increasing, so you a longer retirement could become the norm.

Download a copy of our new report now, 6 Important Financial Strategies for Your 20’s and 30’s, http://bit.ly/2u9D5qJ.

6 Important Financial Strategies for Your 20’s and 30’s2017-07-21T09:09:21-04:00

Q2 Coming Into Focus

The Weekly Update

Week of June 17, 2017

By Christopher T. Much, CFP®, AIF®

Last Friday, stocks closed at record highs. The S&P 500 rose 1.41% and the Dow climbed 1.04%—both closing at new peaks. The NASDAQ reported a 2.58% gain and the MSCI EAFE posted a 2.38% increase. Despite continuing headlines from Washington, the markets remain productive and strong. New Q2 numbers also rolled in last week, giving us a clearer picture of what happened from April through June.

Q2 Coming Into Focus

Over the second quarter, the S&P 500 rose 2.57%, the Dow gained 3.32%, and the NASDAQ jumped 3.87%. Meanwhile, the MSCI EAFE improved by 5.0%. Analysts are now predicting that Q2 Gross Domestic Product (GDP) will grow to 2.4%—stronger than Q1’s soft 1.4% increase.

While we wait for more numbers and reports, here are some highlights so far:

  • Corporate Earnings: Corporate Earnings should remain strong for Q2, with an expected S&P 500 earnings growth of 6.5%. As of July 14, only 6% of S&P 500 companies have reported earnings.
  • Core Consumer Pricing: Core Consumer Pricing, which measures the price of consumer goods excluding food and energy, remained at 60-year historically low levels. June’s numbers increased by only 0.1%—the third month in a row for low rates.
  • Retail Sales: Retail sales were soft, declining unexpectedly by 0.2% following May’s 0.1% drop and April’s 0.3% rise.
  • Labor Market: Employers hired at a record increase of 8.3% in May, filling 5.5 million jobs. Consequently, job openings fell in May to 5.7 million from April’s strong 6.0 million. The strong labor market further reflected in June’s low unemployment rate of 4.4%.

On the international front, global economic growth is set to post a predicted 3.0% increase for Q2. Emerging and advanced economies both should record positive results based on strong global trade growth and favorable economic indicators. Both China and Japan are expected to post strong economic growth.

News From Last Week and Looking Ahead

For Q3 and Q4, the economy should continue to produce strong job data and decent housing markets—along with growing investments in businesses. For the year, the economy is expected to expand at an estimated 2.2% in 2017. With that said, consumer sentiment fell to 93.1 in July—much lower than expected. Because consumer spending makes up more than two-thirds of the economy, the markets will continue to follow consumer attitudes and spending. Given current global economic trends, some analysts expect the global economy to grow by 3.0% for 2017.

Finally, Fed Chair Janet Yellen testified before Congress last week. She confirmed that the Fed’s reduction in its $4.5 trillion balance sheet—known as “tapering”—will start later this year. She also suggested that interest rate hikes might continue for a couple of more years. With inflation hovering at 1.4%, however, the Fed may be losing confidence in reaching its targeted goal of an annual 2% increase. Meanwhile, The Bank of Canada has followed the Fed’s lead by raising its interest rates 25 basis points to 0.75%—its first raise since 2010.

As always, we are here to help you navigate the often-complex economic environment. Contact us if you have any questions about how this information may impact your financial life.

ECONOMIC CALENDAR

Monday: Empire State Manufacturing Survey
Tuesday: Import and Export Prices, Housing Market Index
Wednesday: Housing Starts
Thursday: Jobless Claims, Philadelphia Fed Business Survey Outlook, Fed Balance Sheet

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
https://www.msci.com/end-of-day-data-search
http://www.cnbc.com/2017/07/14/us-stocks-earnings-banks-data.html
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
https://www.msci.com/end-of-day-data-search
https://www.frbatlanta.org/cqer/research/gdpnow.aspx
https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
https://insight.factset.com/hubfs/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_070717.pdf
https://insight.factset.com/earningsinsight_07.14.17?utm_source=hs_email&utm_medium=email&utm_content=54271802&_hsenc=p2ANqtz-9_kL0yzB9fZRNdOk1k-9UMjLIJeJTd90ycA45w2tc-orqRS2m7CHSg6IkPz6j5ISwjmZcVT4iyG8zGhjZvByTrBDHM7Q&_hsmi=54271802
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477396&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477713&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=478571&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
https://www.bloomberg.com/news/articles/2017-07-12/yellen-s-take-on-inflation-shifts-subtly-in-remarks-to-congress?cmpid=BBD071217_BIZ&utm_medium=email&utm_source=newsletter&utm_term=170712&utm_campaign=bloombergdaily
http://www.focus-economics.com/regions/major-economies
http://www.focus-economics.com/regions/major-economies
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477847&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477847&cust=wsj-us&wiconly=1&lid=0#top
http://www.focus-economics.com/regions/major-economies
http://wsj-us.econoday.com/byshoweventfull.asp?fid=482143&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://www.cnbc.com/2017/07/12/dovish-yellen-indicates-that-fed-may-not-need-to-hike-rates-much-more.html?__source=newsletter%7Ceveningbrief
https://www.bloomberg.com/news/articles/2017-07-14/little-change-in-u-s-consumer-prices-shows-modest-inflation
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482312&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
Q2 Coming Into Focus2017-07-17T21:51:26-04:00

Markets Start Second-Half Slow

The Weekly Update

Week of July 10, 2017

By Christopher T. Much, CFP®, AIF®

As the country celebrated the Fourth of July last week, the markets experienced some volatility, though they finished a bit flat overall. The Dow fell then rose to close the week up 0.30%. The S&P 500 climbed a modest 0.07% for the week, and the NASDAQ finished the week up 0.21%. The MSCI EAFE fell 0.48%.

Internationally, European markets posted soft gains on Friday, though emerging markets fell for a second-straight week. Further, gold dropped to a 5-month low, while bond yields rose globally on weakening bond markets. In addition, world leaders met last week at the G20 Global Summit and issued a statement supporting open markets. They agreed to fight unfair trade practices, such as countries blocking or heavily taxing imports to protect domestic industries.

A Closer Look at U.S. Market News

  • Auto Sales Continue to Drop: Auto sales dropped in June by 3% from a year ago. Though vehicle sales are still generally high, numbers in the second half of 2017 are expected to remain soft.
  • Employment Numbers Give Mixed Signals: Payroll growth rose a strong 222,000, exceeding expectations of 170,000. The employment growth numbers, along with continuing low unemployment figures, reflect a high demand for workers. However, wage growth remains low at an annual rate of 2.5%.
  • Inflation Stays Weak: Inflation came in at a weak 1.4% in May, staying well below the Fed’s target of 2.0%. Despite weak inflation numbers, the Fed appears committed to raise interest rates one more time this year.
  • Manufacturing Rises and Falls: The PMI manufacturing index closed at a low 52.0, down from May’s 52.7 on weak cost pressures and selling prices. Meanwhile, some good news emerged: The ISM manufacturing index surprised expectations of 55.1 and rose to 57.8—the strongest number since August 2014.
  • Oil Prices Continue to Slump: Oil dropped to $44.33 per barrel on continuing oversupply concerns. The week’s price erosion comes after a 14% drop in the first half of 2017.

A Look Ahead

On Friday, July 14, key economic data will emerge such as consumer price index, retail sales, and consumer sentiment. As we look to the second half of 2017, a variety of developments could boost markets: strong corporate earnings, strengthening wage rates, and growing global trade and Gross Domestic Products (GDPs).

We want to remind you to avoid letting geopolitical ups and downs sway your investment focus. Instead, stay tuned to the fundamentals as you work toward your long-term goals. Feel free to contact us for any perspectives that can help you make sense of your financial life.

ECONOMIC CALENDAR

Tuesday: Job Openings and Labor Turnover Survey (JOLTS)
Wednesday: Beige Book
Thursday: Jobless Claims
Friday: Consumer Price Index, Retail Sales, Industrial Production, Business Inventories, Consumer Sentiment

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.bloomberg.com/news/articles/2017-07-07/motion-sickness-grips-stocks-on-eve-of-a-healthy-earnings-season
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=SPX&region=usa&culture=en-US
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
https://www.msci.com/end-of-day-data-search
http://www.reuters.com/article/us-europe-stocks-idUSKBN19S0VT
http://www.reuters.com/article/emerging-markets-idUSL8N1JY1VU
http://www.cnbc.com/2017/07/07/gold-on-track-for-5th-straight-weekly-loss-after-strong-jobs-report.html
https://www.bloomberg.com/news/articles/2017-07-06/bond-rout-deepens-as-asia-stocks-set-to-join-drop-markets-wrap
http://www.cnbc.com/2017/07/08/g-20-communique-agreed-apart-from-climate-issue–eu-officials.html
https://www.usatoday.com/story/money/cars/2017/07/03/june-2017-auto-sales/447511001/
https://www.usatoday.com/story/money/cars/2017/06/30/auto-sales-like-continue-falling/103314604/
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477421&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477453&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://www.cnbc.com/2017/07/03/expect-one-more-u-s-rate-hike-this-year-even-if-ivanka-trump-is-leading-the-fed-ubs-economist-says.html
http://wsj-us.econoday.com/byshoweventfull.asp?fid=478122&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477878&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://www.cnbc.com/markets/
https://finance.yahoo.com/news/other-culprits-oil-price-crash-230000013.html
http://www.cnbc.com/2017/06/29/crude-oil-prices-firm-set-for-biggest-weekly-gain-since-mid-may.html
http://www.barrons.com/mdc/public/page/9_3063-economicCalendar.html?mod=BOL_Nav_MAR_other
http://pubdocs.worldbank.org/en/997531493655496869/Global-Economic-Prospects-June-2017-Highlights-Chapter-1.pdf
https://www.bloomberg.com/news/articles/2017-07-06/bond-rout-deepens-as-asia-stocks-set-to-join-drop-markets-wrap
http://www.cnbc.com/2017/07/05/the-global-economy-is-doing-something-it-hasnt-done-in-7-years.html?__source=newsletter%7Ceveningbrief
Markets Start Second-Half Slow2017-07-11T10:14:37-04:00

Market Volatility Returns

The Weekly Update

Week of July 3, 2017

By Christopher T. Much, CFP®, AIF®

As Q2 ended, markets hit a six-week volatility high. While the tech sector declined during the week, consumer discretionary and industrial sectors drove stocks higher on Friday. On Friday, the tech-heavy NASDAQ slumped 1.99%. The S&P fell 0.61% and the DOW dropped 0.21%. Globally, the MSCI EAFE declined 0.32%, and European markets and most of the Asian markets finished the week down.

The Fed reported during the week that the largest U.S. banks passed the stress test evaluating their financial soundness. The test results indicate that banks have the capital structures to withstand difficult economic times. In addition, the results gave banks a green light to pay shareholders dividends and engage in share buybacks.

Other Market News

  • Q1 Gross Domestic Product Numbers Go Up: The Q1 GDP estimate improved to 1.4% on an annualized basis. Previous estimates were 1.2% and 0.7%. Consumer spending was also revised upward to 1.1% from previous estimates of 0.6% and 0.3%.
  • Durable Goods Orders Fall: Weakening commercial aircraft sales contributed to a 1.1% fall in May’s durable goods orders. Core capital goods also fell 0.2%, surprising expectations for a 0.5% increase.
  • Consumer Confidence and Sentiment Rise: Consumer confidence exceeded expectations by 2 points in June as individuals who reported that jobs are difficult to find fell by 0.3%. The Consumer Sentiment Index rebounded in the second half of June to 95.1, but remains less than May’s 97.1 reading.
  • Pending Home Sales Weaken: Despite an expected 0.5% gain, pending home sales dropped 0.8% in May. The 3-month run of slowing sales suggests a weakening housing sector.
  • Home Price Index Softens: The Home Price Index fell from an annual increase of 5.9% to 5.7% year-over-year. This index reflects monthly changes in housing prices over 20 metropolitan regions. San Francisco, Boston, and Cleveland all reported lower housing price data.
  • Oil Prices Climb: Although oil prices ended last Friday at $46.04 a barrel, oil closed the first-half of the year down 14%, its weakest performance since 1998. Ongoing concerns about an oversupplied market continue to influence investors despite a dip in U.S. production slowing the bearish outlook.
  • Import/Export Data Modestly Brightens: Imported goods dropped to $193 billion and exports improved to $127.1 billion in May. While the $65.9 billion difference remains significant, this quarter’s goods gap is averaging $66.5 billion a month.
  • The Dollar Drops: Though marginally recovering on Friday, the U.S. dollar reported its largest quarterly decline in almost 7 years against other major currencies.

The Week Ahead

U.S. markets close on Tuesday for the July 4th holiday. During the shortened trading week, the markets will look at manufacturing indices, motor vehicle sales, and employment data reports. As the data becomes available, investors will focus on how Q2 numbers roll out and what might be developing for the rest of the year.

As you reflect on this data and the week ahead, feel free to contact us should questions arise. CTS Financial Group is here to serve your complete financial goals and help you navigate your investing choices. We wish you and yours a happy and safe 4th of July holiday.

ECONOMIC CALENDAR

Monday: ISM Manufacturing Index, PMI Manufacturing Index, Motor Vehicle Sales, Construction Spending
Wednesday: Factory Orders
Thursday: ADP Employment Report, ISM Non-Mfg Index
Friday: Employment Situation

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
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Market Volatility Returns2017-07-03T13:15:29-04:00