Rise of the Robots or a Relationship Renaissance?

Rise of the robots? Not so fast.

Are we experiencing a rise of the machines or an opportunity for a relationship renaissance? When it comes to robo-advisors, CTS believes in forward-thinking technology but not at the expense of hands-on research and face-to-face interaction. DOWNLOAD our latest article for our take on the robo-advisor movement, and why we believe you deserve more than just automation.

Rise of the Robots or a Relationship Renaissance?2017-08-30T10:06:28-04:00

Markets Bounce Back

The Weekly Update

Week of August 28, 2017

By Christopher T. Much, CFP®, AIF®

After several weekly losses, the major domestic indexes all ended in positive territory on Friday, August 25. The S&P 500 gained 0.72%, the Dow was up 0.64%, and the NASDAQ added 0.79% for the week. International stocks in the MSCI EAFE also increased by 0.58%.

Last week provided a number of economic updates, and a report from Fed Chair Janet Yellen helped push the markets higher. Rather than providing a rundown of every report, we want to focus on two in particular that give key information on economic health—and a reminder to look beyond the headlines.

Beyond the Headlines in Housing and Manufacturing

1. Housing Drops

The headlines: Sales of both new and existing homes fell in July.

The deeper story: Relatively few existing houses are available for purchase. In addition, builders are focusing on more lavish new homes rather than the modest ones that many buyers seek. As a result, the median price of a new home hit its highest July level ever, climbing to $313,700—6% higher than this time last year. Existing home prices are also 6.2% above where they were in July 2016.

The takeaway: High prices may be excluding first-time homebuyers from the market—especially for new houses.

2. Manufacturing Declines

The headlines: Durable goods orders plunged by 6.8%.

The deeper story: The headline’s stated monthly decline is largely due to a sharp drop-off in orders for transportation equipment, in particular for civilian aircraft. However, if you dig deeper, you will see that July’s civilian aircraft decrease follows a massive 129.3% increase in June, calming any concerns about the aircraft industry. Overall, orders for core goods beat expectations and could help drive a higher reading for second quarter GDP.

The takeaway: Orders and shipments for many key goods increased in July, which points to positive sentiment among businesses—and good news for the economy.

On the Horizon
This week, we will receive the second reading of second-quarter GDP, as well as both Consumer Confidence and Consumer Sentiment updates. Furthermore, according to President Trump’s Chief Economic Advisor, an announcement on tax reforms will occur on August 30. Together, these reports could affect market behavior and indicate both where the economy has been and what may be on the horizon.

As always, while we pay attention to today’s headlines and updates, our focus remains solidly on how to move you toward the future you desire. Should you have any questions, we are here to help.

ECONOMIC CALENDAR

Tuesday: Consumer Confidence
Wednesday: GDP, ADP Employment Report
Thursday: Personal Income and Outlays
Friday: Motor Vehicle Sales, PMI Manufacturing Index, ISM Mfg Index, Consumer Sentiment

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=!DJI&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/2017/08/25/us-stocks-central-bank-jackson-tax-reform.html
https://www.cnbc.com/2017/08/25/ecbs-mario-draghi-says-global-recovery-is-firming-up-euro-climbs.html
https://www.cnbc.com/2017/08/23/heres-why-new-home-sales-tanked.html?recirc=taboolainternal
https://www.cnbc.com/2017/08/24/july-us-existing-home-sales.html
https://www.cnbc.com/2017/08/23/heres-why-new-home-sales-tanked.html?recirc=taboolainternal
https://www.cnbc.com/2017/08/24/july-us-existing-home-sales.html
https://www.cnbc.com/2017/08/23/heres-why-new-home-sales-tanked.html?recirc=taboolainternal
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477410&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://www.reuters.com/article/us-usa-economy-durablegoods-idUSKCN1B51HJ?il=0
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477410&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://www.reuters.com/article/us-usa-economy-durablegoods-idUSKCN1B51HJ?il=0
https://www.cnbc.com/2017/08/25/us-stocks-central-bank-jackson-tax-reform.html
Markets Bounce Back2017-08-29T10:40:10-04:00

Markets Cautious But Resilient

The Weekly Update

Week of August 21, 2017

By Christopher T. Much, CFP®, AIF®

From domestic unrest to international terrorism, last week provided many headlines that could easily rattle the markets. While we did see days with volatility and declines, the major indexes remained relatively flat. For the week, the Dow was down 0.84%, the S&P 500 dropped 0.65%, and the NASDAQ fell 0.64%. On the international front, the MSCI EAFE remained virtually the same last week as the week before, recording a microscopic 0.0014% increase.

Why didn’t the markets react to the geopolitical turmoil by turning sharply negative? As we’ve shared before: Headlines shouldn’t drive long-term market behavior—economic fundamentals should. Last week, we received reports indicating the economy continues to be strong in a number of areas.

Here is a closer look at last week’s important economic news:

  • Robust Retail Sales: July retail sales rose 0.6%, beating expectations and showing strength in a variety of retail categories.
  • Strong Business Inventories: Factory, warehouse, and retail business inventories all jumped for a combined 0.5% increase in June. The data looks promising—inventory levels tend to rise in positive economic environments.
  • Uneven Industrial Activity: Industrial production rose 0.2% in July. This growth was lower than expected due to declining motor vehicle production dragging on the index.
  • Mixed Housing Data: The housing market index surged by 4 points as homebuilders experience an increasing demand from buyers. But despite the growing appetite for new construction, July’s housing starts slipped, in part because builders are struggling to find experienced labor and new sites to build on.

Looking Ahead

This week, we will receive more data that helps deepen our perspectives on housing market health, Q3 expectations, and the Fed’s upcoming plans.

In this time of dramatic headlines and geopolitical uncertainty, we want to remind you that you are in control of your wealth and financial future. No matter what the talking heads want you to believe, stay focused on market fundamentals. Please call or email if you have any questions concerning specific market data or larger, developing issues.

ECONOMIC CALENDAR

Wednesday: New Home Sales
Thursday: Jobless Claims, Existing Home Sales
Friday: Durable Goods Orders, Janet Yellen Speaks

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.cnbc.com/2017/08/18/us-stocks-weekly-drop-trump-cohn.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://wsj-us.econoday.com/byshoweventfull.asp?fid=477714&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477806&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477830&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
https://www.cnbc.com/2017/08/15/homebuilder-sentiment-soars-on-strong-sales.html
https://www.cnbc.com/2017/08/16/us-housing-starts-july-2017.html
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482635&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
Markets Cautious But Resilient2017-08-22T09:56:47-04:00

What Are the Greatest Ads of All Time?

We’ve compiled a few of our favorites and hope you enjoy!

We continue to be inspired by the advertising industry and its impact on American culture. To show our appreciation (and have a little fun), we’ve compiled a list of what we feel are the best advertisements of all time. Got milk? Mean Joe Green? Allstate mayhem? They’re all in there. Enjoy the nostalgia!

Click here to see our list.

What Are the Greatest Ads of All Time?2017-08-18T13:33:47-04:00

Markets Turn Jittery

The Weekly Update

Week of August 14, 2017

By Christopher T. Much, CFP®, AIF®

Last week, rising tension between North Korea and the U.S. rattled the world’s markets. As the two countries traded tough words, concerns escalated and markets reacted emotionally to the news. Though stress is building internationally, we remain committed to focusing on the market fundamentals that drive long-term value.

Amidst the pressure last week, volatility returned to markets—and all three major U.S. market indexes turned south. The Dow dropped 1.06%, the S&P 500 fell 1.43%, and the NASDAQ declined 1.50%. Global markets also reacted as the MSCI EAFE lost 1.59% for the week.

Though international developments dominated headlines, economic news important to markets and investors continued to roll out. The data reflects a solid economy, but some possible headwinds are on the horizon. Here are the highlights:

  • Impressive Corporate Earnings: Q2 corporate earnings reports both domestically and internationally were impressive. Reported corporate earnings in the U.S. increased an average of over 10% for the second quarter in a row—their first time doing so since 2011.
  • Low Inflation: The consumer price index, which measures changes to the average price of specific goods and services, rose only 0.1% in July. Expectations for a 0.2% increase failed to materialize as housing and travel costs, wireless services, and auto sales all slumped in July. At 1.7%, year-over-year inflation remains below the Federal Reserve’s targeted 2% growth rate. Continued low inflation may cause the Fed to rethink its plans to raise interest rates.
  • Rising Demand for Labor: Labor markets continue to be a key economic driver as evidenced by sharply rising job openings. June’s job openings jumped to 6.2 million from 5.7 million in May. Year-over-year, job openings climbed an impressive 11.3%. Moreover, jobless claims remain at historic lows.
  • High U.S. Household Debt: The current outstanding consumer debt of $12.7 trillion is now higher than the previous record reached in 2008. This debt load could wind up being a drag on consumer spending and the economy as a whole.

What Is Ahead

Tense geopolitical headlines may continue, but there will be plenty of market news, too. Retail, manufacturing, and housing data will come out this week, and Friday’s August consumer sentiment numbers will be of interest. Though the markets may move with emotions, economic fundamentals should continue to be the base for long-term value.

No matter what questions you may have, we always welcome you to reach out and contact us. We are here to help.

ECONOMIC CALENDAR

Tuesday: Retail Sales, Import and Export Prices, Housing Market Index, Business Inventories
Wednesday: Housing Starts
Thursday: Jobless Claims, Industrial Production
Friday: Consumer Sentiment

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.cnbc.com/2017/08/11/stocks-rise-for-the-first-time-4-days-after-tame-inflation-data.html
https://www.cnbc.com/2017/08/11/stocks-rise-for-the-first-time-4-days-after-tame-inflation-data.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
https://www.cnbc.com/2017/08/11/stocks-rise-for-the-first-time-4-days-after-tame-inflation-data.html
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477397&cust=wsj-us&wiconly=1&lid=0#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477397&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
https://www.cnbc.com/2017/08/11/markets-to-fed-theres-little-chance-of-another-rate-hike-this-year.html
http://wsj-us.econoday.com/byshoweventfull.asp?fid=478572&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482600&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477458&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
https://www.bloomberg.com/news/articles/2017-08-10/in-debt-we-trust-for-u-s-consumers-with-12-7-trillion-burden
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482600&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
Markets Turn Jittery2017-08-14T20:43:35-04:00

Markets Remain Bullish

The Weekly Update

Week of August 7, 2017

By Christopher T. Much, CFP®, AIF®

Another week of economic performance brought more news that the markets continue their bullish streak. After eight consecutive record-high closings, the Dow rose above 22,000 for the first time ever and finished the week up 1.20%. The S&P 500 was up 0.19% for the week, and the NASDAQ slightly fell by 0.36%. Meanwhile, the MSCI EAFE closed with a 0.82% increase.

The positive news continued with other upbeat reports. Manufacturing and employment each posted impressive numbers, suggesting a favorable Q3 start. And investors are looking ahead to possible Fed action on unwinding its balance sheet and bumping interest rates up again in December.

Here are key market developments that emerged last week:

Manufacturing Is On the Rise
Manufacturing is gaining speed as a key economic factor for Q3 and Q4. In June, new factory orders rose to almost a 10% annual increase, the best rate in the last 3 years. Unfilled orders also jumped 1.3% on rising demand for transportation equipment and capital goods. In addition, business confidence is at a 6-month high and inventories are up, though inflationary pressure remains soft. As a result, factory payrolls jumped 16,000 in July on top of June’s 12,000 increase.

Jobs Reports Remain Robust
Last Friday’s Employment Situation report marks the 5th time this year that payroll growth surpassed 200,000. While analysts predicted payrolls would grow by an additional 178,000, the actual number came in at 209,000. The solid employment increase helped lower the unemployment rate to 4.3%—the best rate since 2001.
Average hourly earnings also rose last week. The welcomed 0.34% increase on the month was the highest increase since October. Analysts hoped that low unemployment numbers would push yearly wage growth to over 3%, but year-to-date numbers continue to hover around growth of 2.5%.

Federal Reserve Weighs Options
Expect the Fed to raise interest rates in December by an additional ¼ point, though Fed Chair Janet Yellen has indicated that low inflation remains a concern for the economy. Despite robust financial markets, low unemployment, and a flourishing job market, inflation sits below the targeted 2% increase, with modest increases in both wage growth and consumer spending. Some analysts think that soft inflation could give pause to a year-end Fed rate hike.

Many observers believe the Federal Reserve will begin in September to shrink its $4.5 trillion balance sheet. The Fed balance sheet consists primarily of U.S. treasury bonds and mortgage-backed securities. To reduce this position, the Fed can either sell those securities, or it can opt not to reinvest securities as they mature.

What Is Ahead

Domestically
Widespread positive indicators are at the heart of a solid start to Q3. In addition to rebounding manufacturing activity and robust employment data, other aspects of the economy are brightening:

  • Solid Q2 corporate earnings continue to impress the markets.
  • Consumer sentiment is exceptionally high on the economy, personal finances, and individual companies.
  • Pending home sales are on the rise and suggest optimism for July and August existing home sales numbers.
  • Auto sales provide an early indicator of a minor and needed boost in consumer spending, as unit sales moved higher in July and may continue.

Internationally
In addition, economies around the world are moving in the right direction. The euro economies are showing continued strength, while emerging economies are expanding at their fastest rate since 2014.

As always, we encourage you to continue focusing on your long-term goals. Should you have any questions about the economy or your financial life, we are here for the conversation.

ECONOMIC CALENDAR

Tuesday: Job Openings and Labor Turnover Survey (JOLTS)
Thursday: Jobless Claims
Friday: Consumer Price Index

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.cnbc.com/2017/08/04/us-stocks-jobs-report-beats-fed.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://wsj-us.econoday.com/byshoweventarticle.asp?fid=482480&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482480&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
https://www.cnbc.com/2017/08/04/us-stocks-jobs-report-beats-fed.html
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477422&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482480&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477915&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=478123&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp – top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=478123&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482480&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477422&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482480&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=482480&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
https://www.cnbc.com/2017/08/04/mystery-of-slow-wage-growth-keeps-market-doubting-fed-can-hike-rates.html
http://www.reuters.com/article/us-usa-economy-idUSKBN19L1RY
https://www.cnbc.com/2017/08/04/mystery-of-slow-wage-growth-keeps-market-doubting-fed-can-hike-rates.html
https://www.cnbc.com/2017/08/04/mystery-of-slow-wage-growth-keeps-market-doubting-fed-can-hike-rates.html
http://www.investopedia.com/insights/how-will-fed-reduce-balance-sheet/
http://lipperalpha.financial.thomsonreuters.com/2017/08/sp-500-17q1-earnings-dashboard/
https://www.cnbc.com/2017/08/03/these-key-economic-metrics-literally-went-off-the-charts-says-bespokes-paul-hickey.html?__source=newsletter%7Ceveningbrief
http://wsj-us.econoday.com/byshoweventfull.asp?fid=478086&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
http://wsj-us.econoday.com/byshoweventfull.asp?fid=477110&cust=wsj-us&year=2017&lid=0&prev=/byweek.asp#top
https://www.bloomberg.com/news/articles/2017-08-01/euro-area-economy-steams-ahead-as-ecb-awaits-inflation-to-follow?cmpid=BBD080117_MKT&utm_medium=email&utm_source=newsletter&utm_term=170801&utm_campaign=markets
https://www.cnbc.com/2017/08/04/global-investors-find-a-new-love-as-consumer-conference-soars-in-emerging-markets.html
Markets Remain Bullish2017-08-08T12:57:55-04:00