S&P & Nasdaq Outgain Dow

The Weekly Update

Week of July 29, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Last week, investors assessed earnings and the initial estimate of second-quarter economic growth, while awaiting the Federal Reserve’s next announcement about interest rates.

Stocks rose for the week; particularly, tech shares. The S&P 500 gained 1.65%; the Nasdaq Composite, 2.26%. The Dow Jones Industrial Average lagged, adding just 0.14%. MSCI’s EAFE index, a gauge of equity performance in developed foreign markets, ticked up 0.01%.

Economy Grew Moderately in Q2
Analysts surveyed by Dow Jones Newswires had forecast 2.0% Gross Domestic Product (GDP) for the second quarter. The actual estimate, announced Friday by the Bureau of Economic Analysis, was slightly better at 2.1%.

While this is the poorest quarterly GDP number since the opening quarter of 2017, the decline in GDP largely reflects a decrease in business investment. Consumer spending improved 4.3% in Q2, and government spending rose 5.0%, which was the biggest quarterly gain in a decade.

China Trade Talks to Restart
U.S. trade delegates are scheduled to resume face-to-face negotiations with their Chinese counterparts, starting Tuesday in Shanghai.

This renewed effort to forge a bilateral trade pact could go on for some time. Secretary of the Treasury Steven Mnuchin, who is part of the U.S. delegation, told reporters last week that it would likely take “a few more meetings” before any kind of accord can be considered.

What’s Next
Wednesday at about 2:00pm EST, the Federal Reserve is scheduled to conclude its July meeting. Wall Street is eager to see what the Fed will do with interest rates. The question is whether traders have priced in expectations of a cut and how they may react if no cut comes.

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The federal government’s June personal spending report and the Conference Board’s monthly index of consumer confidence.
Wednesday: The Federal Reserve presents its latest statement on interest rates and monetary policy, and payroll titan ADP offers its July private-sector employment snapshot.
Thursday: The latest report on American manufacturing from the Institute for Supply Management.
Friday: July jobs data from the Department of Labor, and the University of Michigan’s final July Consumer Sentiment Index, measuring household confidence in the economy.

Source: Econoday / MarketWatch Calendar, July 26, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: RingCentral (RNG)
Tuesday: Apple (APPL), Mastercard (MA), Merck (MRK), Pfizer (PFE), Procter & Gamble (PG)
Wednesday: General Electric (GE), Qualcomm (QCOM)
Thursday: Royal Dutch Shell (RDS.A), Verizon (VZ)
Friday: Berkshire Hathaway (BRK.B), Chevron (CVX), ExxonMobil (XOM), Toyota (TM)

Source: Zacks, July 26, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.wsj.com/market-data
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.cnbc.com/2019/07/26/us-gdp-second-quarter-2019.html
https://www.cnbc.com/2019/07/26/us-gdp-second-quarter-2019.html
https://www.reuters.com/article/us-usa-trade-china/top-us-china-trade-negotiators-to-meet-in-shanghai-next-week-idUSKCN1UJ1JI
S&P & Nasdaq Outgain Dow2019-07-29T14:09:24-04:00

Stocks Descend from Recent Peaks

The Weekly Update

Week of July 22, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Stock benchmarks retreated during the first week of the second-quarter earnings season. As some big names shared quarterly results, investors seemed more interested in what might happen at the Federal Reserve’s upcoming policy meeting.

For the week, the S&P 500 declined 1.23%. The Dow Jones Industrial Average lost 0.65%, and the Nasdaq Composite, 1.18%. International stocks, measured by the week-over-week performance of the MSCI EAFE index, were down 0.79%.

Households Bought More Last Month
Retail sales were up 0.4% in June, according to the Department of Commerce. Consumer purchases account for more than two-thirds of America’s gross domestic product, and data like this may rebut some assertions that the economy is losing steam.

Traders still expect the Federal Reserve to make a rate cut at the end of this month, even with low unemployment, solid consumer spending, and stocks near record peaks. Ordinarily, the Fed lowers interest rates to try to stimulate business growth and investment when the economy lags. After ten years without a recession, its new challenge is to make appropriate moves to ward off such a slowdown.

Will Wall Street’s Expectations Be Met?
Thursday, Federal Reserve Bank of New York President John Williams noted that Fed policymakers could proactively adjust interest rates and take “preventative measures” to ward off a potential slowdown. A New York Fed spokesperson later said that Williams’ comments were “academic” and did not concern “potential policy actions.” Still, Fed Vice President Richard Clarida made similar comments last week, expressing the view that Fed officials “don’t have to wait until things get bad to have a dramatic series of rate cuts.”

Two other Fed officials – Esther George and Eric Rosengren – have publicly stated that they are not in favor of a cut.

What’s Next
About 25% of S&P 500 companies report earnings this week. In addition, the federal government will present its first snapshot of the economy’s second-quarter performance.

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: June existing home sales figures appear from the National Association of Realtors.
Wednesday: The Census Bureau presents its June report on new home buying.
Friday: The Bureau of Economic Analysis releases its initial estimate of Q2 economic growth.

Source: Econoday / MarketWatch Calendar, July 19, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: Celanese (CE), Halliburton (HAL), TD Ameritrade (AMTD)
Tuesday: Coca-Cola (KO), Texas Instruments (TXN), Visa (V)
Wednesday: AT&T (T), Boeing (BA), Facebook (FB), PayPal (PYPL)
Thursday: Alphabet (GOOGL), Amazon (AMZN), Anheuser-Busch (BUD), Intel (INTC), Starbucks (SBUX)
Friday: AbbVie (ABBV), Colgate-Palmolive (CL), McDonalds (MCD)

Source: Zacks, July 19, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.wsj.com/market-data
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.cnbc.com/2019/07/17/the-feds-expected-rate-cut-not-supported-by-economic-data.html
https://www.cnbc.com/2019/07/17/the-feds-expected-rate-cut-not-supported-by-economic-data.html
https://www.thestreet.com/markets/stocks-climb-rate-cut-hopes-microsoft-earnings-15025435
https://www.cnbc.com/2019/07/19/feds-rosengren-not-on-board-for-rate-cut-i-think-we-should-wait.html
Stocks Descend from Recent Peaks2019-07-22T12:40:36-04:00

S&P Tops 3,000

The Weekly Update

Week of July 15, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Friday, the S&P 500 settled above 3,000 for the first time, after rising 0.78% for the week. The Dow Jones Industrial Average chalked up a milestone of its own: the blue chips ended the week above 27,000, gaining 1.52% on the way. Additionally, the Nasdaq Composite wrapped up the week 1.01% higher. The MSCI EAFE index, a gauge of overseas developed markets, fell 0.65%.

Stocks rallied at midweek with help from Federal Reserve Chairman Jerome Powell’s congressional testimony on monetary policy, plus the latest Fed meeting minutes.

Jerome Powell’s Statements
Wednesday, Chairman Powell told Capitol Hill lawmakers that “uncertainties around global growth and trade continue to weigh on the outlook” of the Federal Open Market Committee. He also noted that “manufacturing, trade, and investment are weak all around the world.”

On the same day, the Fed presented the minutes of its June policy meeting. The record shared the belief of some Fed officials that “a near-term cut in the target range for the federal funds rate could help cushion the effects of possible future adverse shocks to the economy.”

Overall Inflation Remains Muted
The June Consumer Price Index, released last week by the Bureau of Labor Statistics, measured only 1.6% yearly inflation. The Federal Reserve uses the Bureau of Economic Analysis’ Core Personal Consumption Expenditures (PCE) Price Index as its inflation barometer; in its latest edition, it showed just a 1.5% year-over-year rise.

Currently, the Fed has a yearly inflation target of 2.0%. In the past, it has often raised interest rates in response to increasing inflation, which can potentially slow growth and affect hiring and employment levels. Absent significant inflation pressure, such a response may not be forthcoming.

Final Thought
All eyes are on corporate earnings this week, as prominent banks and about two dozen other S&P 500 firms report second-quarter results. Market participants have much to consider in terms of profits, revenue, and guidance.

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: Fed chair Jerome Powell delivers a speech on monetary policy at the G7 summit in France, and the Census Bureau releases its June retail sales report.
Friday: The University of Michigan presents its preliminary July consumer sentiment index, measuring consumer confidence and perceptions of the economy.

Source: Econoday / MarketWatch Calendar, July 12, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Monday: Citigroup (C), J.B. Hunt (JBHT)
Tuesday: Goldman Sachs (GS), Johnson & Johnson (JNJ), JPMorgan Chase (JPM), Wells Fargo (WFC)
Wednesday: Bank of America (BAC), Netflix (NFLX), Novartis (NVS), Abbott Labs (ABT)
Thursday: Microsoft (MSFT), UnitedHealth (UNH)
Friday: American Express (AXP)

Source: Zacks, July 12, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.cnbc.com/2019/07/12/stock-market-dow-futures-rise-after-fed-hints-at-rate-cut-ahead.html
https://www.wsj.com/market-data
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.investopedia.com/markets-cheer-lower-interest-rate-outlook-4692639
https://www.reuters.com/article/us-usa-economy-inflation/u-s-core-cpi-posts-biggest-gain-in-nearly-1-1-2-years-idUSKCN1U61NR?il=0
S&P Tops 3,0002019-07-15T13:32:48-04:00

Ultimate College Checklist

Ultimate College Checklist

With summer in the air, it means fall is just around the corner. And, for many, that means kids heading off to college. We share a checklist of 13 critical items that should be addressed before your child starts classes. http://bit.ly/2KLR0P0

Ultimate College Checklist2019-07-12T09:29:07-04:00

Special Update: Quarterly Report

The Weekly Update

Week of July 8, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
U.S. stock benchmarks opened a new quarter positively. The S&P 500 gained 1.65% in the opening week of July; the Dow Jones Industrial Average, 1.21%; the Nasdaq Composite, 1.94%. Overseas, stocks in developed markets, tracked by MSCI’s EAFE index, rose 1.43%.

On July 3, the S&P posted its latest record close: 2,995.82. In other news, the Department of Labor said that the economy added 224,000 net new jobs in June, far more than the 160,000 projected by analysts in a Bloomberg poll. The headline jobless rate ticked up 0.1% to 3.7% in June; the U-6 rate, including the underemployed, also rose 0.1% to 7.2%. Finally, the Office of the U.S. Trade Representative said that the federal government plans to levy new tariffs on $4 billion of food and beverages coming from the European Union.

Monday, July 15 will mark the start of the next earnings season. Money-center banks report first, followed by companies from a variety of industries. As Wall Street gets ready for their results, we will take a moment to recap Q2 index performance and the quarter’s two biggest news developments.

Stocks Rose, Fell, and Rose Again
The S&P 500 gained 3.93% in April, dropped 6.58% in May, and climbed 6.89% in June. In the end, it advanced 3.79% for the quarter, outdoing the Q2 gains of the Nasdaq Composite (3.58%) and Dow Industrials (2.59%).

The Fed Hinted at a Shift in Monetary Policy
The central bank’s June statement took out a reference about being “patient” on borrowing costs and noted that Fed policymakers would “act as appropriate” to try and sustain economic growth. The latest dot-plot, showing the opinions of Fed officials about where interest rates might be in the near future, showed nothing like consensus.

U.S.-China Trade Talks Stalled, But May Resume Soon
In May, the U.S. and China announced they would hike tariffs on each other’s exports during the quarter. Formal trade negotiations broke down for six weeks. On June 29, President Trump announced at the Group of 20 summit in Japan that talks would soon resume and that the U.S. would hold off on tariffs slated for another $300 billion in Chinese goods.

What’s Next
As the quarter gets underway, traders are wondering if an interest rate adjustment and a U.S.-China trade deal are in store for the summer; there is also some ambiguity about the economy’s momentum. Investors will have plenty to consider in the coming weeks.

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: Federal Reserve Chairman Jerome Powell delivers opening remarks at a conference at the Federal Reserve Bank of Boston.
Wednesday: Fed Chair Powell testifies on monetary policy in Congress, and the Fed also releases the minutes from its June meeting.
Thursday: The June Consumer Price Index appears, showing monthly and yearly changes in inflation.

Source: Econoday / MarketWatch Calendar, July 5, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Tuesday: PepsiCo (PEP)
Wednesday: Bed Bath & Beyond (BBBY)
Thursday: Delta Air Lines (DAL), Fastenal (FAST)

Source: Zacks.com, July 5, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://quotes.wsj.com/index/DJIA/historical-prices
https://quotes.wsj.com/index/COMP/historical-prices
https://quotes.wsj.com/index/SPX/historical-prices
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.marketwatch.com/story/sp-500-heads-for-3rd-straight-record-ahead-of-private-sector-jobs-report-2019-07-03
https://fortune.com/2019/07/05/us-hiring-jobs-data-rebounds/
https://www.cnn.com/2019/07/02/economy/us-tariffs-on-eu/index.html
https://money.cnn.com/data/markets/sandp/
https://www.tradingview.com/markets/indices/quotes-us/
https://www.bloomberg.com/news/articles/2019-06-19/fed-scraps-patient-rate-approach-in-prelude-to-potential-cut
https://www.piie.com/blogs/trade-investment-policy-watch/trump-trade-war-china-date-guide
https://www.bloomberg.com/news/articles/2019-06-29/xi-trump-agree-to-restart-trade-talks-china-says
Special Update: Quarterly Report2019-07-08T15:17:23-04:00

Happy 4th of July from CTS Financial Group

Happy 4th of July

“America was not built on fear. America was built on courage, on imagination and an unbeatable determination to do the job at hand.” — Harry S. Truman

Happy 4th of July from CTS Financial Group2019-07-03T13:36:39-04:00

Down Week Ends Strong Month

The Weekly Update

Week of July 1, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
A month of gains for stocks ended with a weekly retreat. The S&P 500 lost 0.30%; the Nasdaq Composite, 0.32%; the Dow Jones Industrial Average, 0.45%. In contrast, overseas shares, tracked by the MSCI EAFE index, advanced 0.14%.

Last month was the best June for the blue chips since 1938; the best month for the S&P, since 1955. The Dow gained 6.9% in June, the S&P 6.2%.

Trade Talks Could Soon Restart
All week, investors had one eye on Saturday’s Group of 20 summit in Japan, where President Trump and Chinese President Xi Jinping were slated to meet. This weekend, President Trump announced that he and President Xi had agreed to a resumption of trade talks between the U.S. and China. As part of that agreement, the U.S. is holding off on placing tariffs on an additional $300 billion of Chinese goods.

While trade tensions certainly remain between both countries, the news that formal discussions could resume may renew investor optimism about progress toward a trade pact.

Powell Cautions Against Adjusting Rates Too Quickly
In the meantime, Federal Reserve Chairman Jerome Powell attracted attention with new remarks on monetary policy. Powell stated last week that the Fed officials were “mindful that monetary policy should not overreact to any individual data point or short-term swing in sentiment.”

While many traders think the central bank will lower the benchmark interest rate at its July meeting, Powell noted that there was not yet consensus for a cut among Fed policymakers.

What’s Ahead
This will be a holiday-shortened trading week. The New York Stock Exchange will close early Wednesday, and all U.S. financial markets will close Thursday for the July 4 holiday. Markets reopen on Friday.

THE WEEK AHEAD: KEY ECONOMIC DATA
Monday: The Institute for Supply Management’s latest purchasing manager index for the factory sector, considered the main barometer of the state of U.S. manufacturing.
Wednesday: Payroll giant ADP’s private-sector employment report for June.
Friday: The June jobs report from the Department of Labor.

Source: Econoday / MarketWatch Calendar, June 28, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
No major earnings reports are scheduled for this week.

Past performance is no guarantee of future results. Data collected from Investors FastTrack software.
https://www.wsj.com/market-data
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.foxbusiness.com/markets/us-stocks-wall-street-june-28-2019
https://www.bloomberg.com/news/articles/2019-06-29/xi-trump-agree-to-restart-trade-talks-china-says
https://www.thestreet.com/markets/feds-powell-suddenly-facing-dissent-says-tk-14998647
https://www.thestreet.com/markets/feds-powell-suddenly-facing-dissent-says-tk-14998647
Down Week Ends Strong Month2019-07-01T13:49:05-04:00