Choosing a Financial Advisor: What to Know Before You Invest

Choosing a Financial Advisor:  What to Know Before You Invest

Choosing a financial advisor may be one of the most important financial decisions that you’ll ever make, and the quality of this advisor’s advice could heavily influence your long-term financial success. Consider these things before making your selection. http://bit.ly/choosing_advisor

Choosing a Financial Advisor: What to Know Before You Invest2018-06-28T10:24:44-04:00

The Power of Corporate Earnings

The Weekly Update

Week of June 25, 2018
By Christopher T. Much, CFP®, AIF®

Stocks stumbled across the globe last week as trade tensions continued to escalate. Despite rebounding somewhat on Friday, the S&P 500 experienced its first weekly loss in a month, and the Dow posted its worst week since March. The S&P 500 dropped 0.89%, the Dow lost 2.03%, and the NASDAQ fell 0.69%. International stocks in the MSCI EAFE gave back 0.98%.

While trade headlines may affect market performance, a closer look at the data shows other, more powerful drivers affecting equity prices. In particular, many investors continue to focus on corporate earnings estimates.

Analyzing Corporate Earnings
Strong corporate earnings have helped maintain a sense of market balance in 2018. As the media focuses on political stories, corporate earnings estimates continue to rise—and have a greater market affect than many investors may recognize.

How Corporate Earnings Estimates Work
Many financial services companies hire analysts to predict how much a company’s stock will earn per share. The average of all the experts’ predictions creates a consensus earnings estimate. This calculation gives a rough view of the company’s cash flow—which helps investors value a stock. Generally, when a company beats its earnings estimate, the stock price goes up. If it misses or matches the prediction, the stock may suffer.

Where We Are Now
Tax cuts and increasing demand have helped earnings estimates grow this year. As the estimates have risen, companies with the largest increases are significantly outperforming those with the worst. The latest numbers show earnings per share growing in 2019 and 2020—and 2018’s projections are higher than they were at the end of the 1st quarter. This data has helped keep markets from overreacting to the geopolitical buzz in the background.

Looking Forward
While we expect to hear more on a potential trade war, we will continue to focus on key market principals. This week, we will receive several reports, including consumer confidence and durable goods orders. Rather than significantly affecting stocks, these releases may simply underscore what corporate earnings and other data continue to demonstrate: Right now, the economy is healthy.

Next month, earnings season will begin, and analysts expect S&P 500 companies to show 20% profit growth in the 2nd quarter.

Looking ahead, we will continue to analyze how rising tariffs could affect the domestic and global markets. But, as always, economic fundamentals will take the lion’s share of our attention.

If you have questions about earnings, trade, or your future, contact us any time.

ECONOMIC CALENDAR:
Tuesday: Consumer Confidence
Wednesday: Durable Goods Orders
Thursday: GDP, Jobless Claims
Friday: Personal Income and Outlays, Consumer Sentiment

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.cnbc.com/2018/06/22/us-stock-futures-dow-data-oil-trade-and-politics-on-the-agenda.html
https://www.bloomberg.com/news/articles/2018-06-22/trade-is-an-afterthought-in-stock-market-still-glued-to-earnings
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.marketwatch.com/story/stock-market-leaders-yet-to-be-undercut-by-trade-war-fears-2018-06-23
https://www.bloomberg.com/news/articles/2018-06-22/trade-is-an-afterthought-in-stock-market-still-glued-to-earnings
https://www.bloomberg.com/news/articles/2018-06-22/trade-is-an-afterthought-in-stock-market-still-glued-to-earnings
https://www.investopedia.com/articles/stocks/06/earningsforecasts.asp
https://www.bloomberg.com/news/articles/2018-06-22/trade-is-an-afterthought-in-stock-market-still-glued-to-earnings
https://www.marketwatch.com/story/stock-market-leaders-yet-to-be-undercut-by-trade-war-fears-2018-06-23
https://www.bloomberg.com/news/articles/2018-06-22/trade-is-an-afterthought-in-stock-market-still-glued-to-earnings
The Power of Corporate Earnings2018-06-25T13:16:04-04:00

Trade and Interest Rates

The Weekly Update

Week of June 18, 2018
By Christopher T. Much, CFP®, AIF®

Last week stocks showed mixed results as political headlines continued to dominate the news. The Dow lost 0.89% and the S&P 500 was almost flat with a 0.02% gain. The NASDAQ, on the other hand, reached a record high on Thursday and ended the week up 1.32%. Both the S&P 500 and NASDAQ experienced their 4th week of gains in a row. International stocks in the MSCI EAFE lost ground, posting a 0.52% decline.

Two Key Perspectives from Last Week

1. Trade tension continued.
Spats with U.S. allies—including Canada—and ongoing threats of a trade war with China captured investors’ attention last week. On Friday, equities briefly stumbled when the U.S. pledged new tariffs on Chinese goods, and China responded by promising the same level of tariffs on the U.S. A true trade war could slow global economic growth, but the current tariff tension may be little more than negotiation tactics.

2. Interest rates increased.
On Wednesday, June 13, the Federal Reserve raised its benchmark interest rates for the 2nd time this year. Fed Chairman Powell said, “…the economy is doing very well. Most people who want to find jobs are finding them and unemployment and inflation are low.” The Fed believes economic growth will continue at a faster rate than they last predicted. They also project that unemployment will fall to 3.6% by the end of 2018. The Fed may raise rates twice more this year.

The Takeaway
Getting caught up in the news cycles and international headlines is easy, but they often provide little perspective on what may lie ahead for investors. Instead of trying to predict market performance, we encourage you to focus on the data.

This week, we’ll gain new perspectives on the housing market, as well as employment. The insight will continue to help us build a picture of where the economy is today—and how to help our clients make the most of their opportunities.

ECONOMIC CALENDAR:
Monday: Housing Market Index
Tuesday: Housing Starts
Wednesday: Existing Home Sales
Thursday: Jobless Claims

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.cnbc.com/2018/06/15/us-stock-futures-dow-data-trade-and-politics-on-the-genda.html
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=@CCO
https://www.marketwatch.com/story/dow-futures-tumble-140-points-as-trade-fight-ratchets-up-2018-06-15
https://www.msci.com/end-of-day-data-search
https://www.cnbc.com/2018/06/15/us-stock-futures-dow-data-trade-and-politics-on-the-agenda.html
https://www.marketwatch.com/story/dow-futures-tumble-140-points-as-trade-fight-ratchets-up-2018-06-15
https://www.nytimes.com/2018/06/13/business/economy/fed-jerome-powell.html
https://www.nytimes.com/2018/06/13/us/politics/federal-reserve-raises-interest-rates.html
Trade and Interest Rates2018-06-18T13:32:16-04:00

Blockchain: An Everyday Thing?

Blockchain:  An Everyday Thing?

Imagine a world where contracts are embedded in digital code and stored in transparent, shared databases – protected from deletion, tampering, and revision. A world where patient information is communicated between healthcare providers to save lives, rather than jeopardize privacy. A place where individuals, organizations, machines, and algorithms can freely interact with one another with little friction. These are the immense possibilities of blockchain and its potential to upend the way we manage data and information across verticals, on a global scale. http://bit.ly/2Jl8BNh

Blockchain: An Everyday Thing?2018-06-14T10:14:53-04:00

Strength, Growth and Tension

The Weekly Update

Week of June 11, 2018
By Christopher T. Much, CFP®, AIF®

As last week ended, tension between the U.S. and some of its greatest allies was on the rise. Trade remained a hot-button topic ahead of the G-7 meeting in Canada, but investors seemed largely unfazed by the drama. In fact, all 3 domestic indexes posted strong results: The S&P 500 added 1.62% and the NASDAQ gained 1.21%, with both indexes notching their 3rd week of gains in a row. The Dow ended Friday up 2.77% for the week—recording both its highest level and largest weekly gain since March. International stocks were also up, with the MSCI EAFE increasing by 0.91%.

While geopolitical headlines keep unfolding, new data continues to indicate that the U.S. economy is on solid ground. Let’s examine a few updates we received last week:

1. The trade deficit decreased in April.
The latest trade data was largely positive, with the trade deficit hitting a 7-month low and coming in nearly $3 billion lower than expected. In April, exports reached their highest level in history. The economists at First Trust believe that this strong performance could push the 2nd-quarter Gross Domestic Product (GDP) as high as 5%.

2. The labor market continues to tighten.
The latest Job Openings and Labor Market Survey (JOLTS) gave an interesting perspective on our current labor market. Right now, more jobs are available than unemployed people looking for them. Since JOLTS began almost 20 years ago, this has never happened before. The data indicates that employers are struggling to hire people for open jobs—and that the economy is at full employment.

3. The services sector is expanding.
May data from the ISM non-manufacturing index showed that the services sector has experienced its second best beginning of a year since the index launched in 1997. Business activity and new orders had very positive performance, which could contribute to continuing service-sector growth for the months ahead. The report also showed prices increasing and provided more data that employers are having a hard time filling jobs in this tight labor market.

What is ahead this week?

We will receive two major central bank reports this week—and the historic U.S.–North Korea summit is on the docket as well.

President Trump and North Korea’s leader Kim Jong Un are meeting on Tuesday. The talks should cover North Korea’s nuclear program, but no one can say for sure what market impact it may have.

On a more predictable note, most analysts expect the Federal Reserve to announce its latest interest rate hike on Wednesday. While the markets have likely priced in this increase already, the Fed’s projections for the rest of 2018 could affect investor sentiment.

Meanwhile, on Thursday, experts expect the European Central Bank (ECB) will announce a plan to finally wind down its quantitative easing. If the ECB doesn’t share a timeline for ending this recession-era program, investors may interpret the move as a sign that policymakers are concerned about the EU’s economic outlook.

With a lot to consider this week, we encourage you to remember that many data updates indicate our economy is performing well. As the information unfolds, we’re here to help you separate relevant reports from headline hype. Contact us any time if you have questions about how these details may affect your financial life.

ECONOMIC CALENDAR:
Tuesday: Consumer Price Index
Wednesday: FOMC Meeting Announcement
Thursday: Jobless Claims, Retail Sales
Friday: Industrial Production, 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=@CCO
https://www.marketwatch.com/story/dow-futures-slide-130-points-as-g-7-leaders-feud-over-trade-2018-06-08
http://performance.morningstar.com/Performance/index-c/performance-return.action?t=%21DJI&region=usa&culture=en-US
https://www.marketwatch.com/story/dow-futures-slide-130-points-as-g-7-leaders-feud-over-trade-2018-06-08
https://www.msci.com/end-of-day-data-search
https://www.ftportfolios.com/Commentary/EconomicResearch/2018/6/6/the-trade-deficit-in-goods-and-services-came-in-at-46.2-billion-in-april
https://www.ftportfolios.com/Commentary/EconomicResearch/2018/6/5/the-ism-non-manufacturing-index-rose-to-58.6-in-may
http://wsj-us.econoday.com/byshoweventfull.asp?fid=486198&cust=wsj-us&year=2018&lid=0&prev=/byweek.asp#top
https://www.ftportfolios.com/Commentary/EconomicResearch/2018/6/5/the-ism-non-manufacturing-index-rose-to-58.6-in-may
https://www.marketwatch.com/story/stock-market-investors-brace-for-week-packed-with-fed-ecb-and-north-korean-drama-2018-06-09?dist=markets
Strength, Growth and Tension2018-06-11T13:43:56-04:00

Jobs Report Calms Volatility

The Weekly Update

Week of June 4, 2018
By Christopher T. Much, CFP®, AIF®

Markets experienced heightened volatility this week, with both the S&P 500 and Dow dropping 0.82% and 1.60% respectively. Meanwhile, the NASDAQ rose 0.24% as international markets took a small dip with the MSCI EAFE losing 1.10%.

The markets’ highs and lows came from a variety of economic and geopolitical developments. The U.S. jobs report posted solid gains while international trade concerns continued to cause some unease. In this market update, we’ll break down the major stories to help you understand what moved markets.

Impressive Jobs Report

Outstanding nonfarm payroll employment numbers rolled in on Friday, and the data supports a strong U.S. economy. Here is a snapshot of some key numbers:

  • Unemployment dropped to 3.8%—its lowest recording in 18 years.
  • Payroll growth jumped to 223,000, far beyond the expected 188,000.
  • Average hourly earnings climbed 2.7%; as a result, the Fed will likely raise interest rates two more times in 2018.

Taken together, the data gives investors and analysts a positive outlook. With more people working, consumption could rise, which could increase demand on production and keep people employed. Some analysts believe that this cycle should continue, barring any unforeseen disruptions. Meanwhile, the solid data helped ease market tensions and keep the U.S. dollar up, despite concerns of a potential global trade war.

New International Tariffs

On Tuesday, President Trump said the U.S. would implement a 25% tax on $50 billion worth of products from China, including high-tech investments. This decision seemed to surprise China, as rumors of a trade war had recently calmed. U.S. and Chinese officials were unable to resolve their dispute over tariffs on Sunday, June 3.

The Trump administration also announced tariffs on metals from Canada, Mexico, and the European Union—all U.S. allies. Attempting to reduce our trade deficit, Trump placed a 25% tax on steel and a 10% tax on aluminum. International leaders reacted quickly to the news, claiming they may strike back on U.S. goods like orange juice, motorcycles, bourbon, apples, and other products.

What’s Ahead?

Next week, we will focus on Tuesday’s job openings and Wednesday’s international trade reports. Other indicators like jobless claims and factory orders will help balance out a relatively quiet week for economic data. In addition, we will continue to track developments on trade negotiations and the potential summit between President Trump and North Korean leader Kim Jong-un.

If you have questions about how any of this information may affect you, please contact us. We are happy to help you.

ECONOMIC CALENDAR:
Monday: Factory Orders
Tuesday: ISM Non-Manufacturing Index, JOLTS
Wednesday: International Trade Report
Thursday: Jobless Claims

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&region=usa&culture=en-US
https://www.msci.com/end-of-day-data-search
https://www.cnbc.com/2018/06/01/the-5-most-important-numbers-from-fridays-jobs-report.html?__source=newsletter%7Ceveningbrief
https://www.cnbc.com/2018/06/01/the-5-most-important-numbers-from-fridays-jobs-report.html?__source=newsletter%7Ceveningbrief
https://www.cnbc.com/2018/05/31/forex-euro-on-course-for-weekly-gain-us-tariffs-hit-cad-peso.html
http://money.cnn.com/2018/05/29/news/economy/china-tariffs/index.html
http://money.cnn.com/2018/06/04/news/economy/global-trade-war/index.html
https://www.usatoday.com/story/news/politics/2018/05/31/trump-follows-through-steel-aluminum-tariff-threat-u-s-allies/658835002/
http://wsj-us.econoday.com/byshoweventarticle.asp?fid=494615&cust=wsj-us&year=2018&lid=0&prev=/byweek.asp#top
https://www.cnn.com/2018/06/01/politics/trump-north-korea-letter/index.html
Jobs Report Calms Volatility2018-06-04T13:45:59-04:00