About Jonathon Much

This author has not yet filled in any details.
So far Jonathon Much has created 192 blog entries.

Special Update: Quarterly Report

The Weekly Update

Week of October 7th, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
The fourth quarter started with a mixed week for equities. The Dow Jones Industrial Average lost 0.92% for the week; the S&P 500, 0.33%. In contrast, the Nasdaq Composite improved 0.54%. Overseas stocks pulled back: the MSCI EAFE index dipped 2.60%.

The Institute for Supply Management’s Manufacturing Purchasing Manager Index fell to 47.8 in September, its lowest level in ten years. Traders worried that the number reflected weakening business confidence. ISM’s latest Non-Manufacturing PMI also declined, but the 52.6 reading indicated growth in the service sector last month.

The Department of Labor said that employers added 136,000 net new workers in September. Unemployment was at 3.5%, a level last seen in December 1969. The U-6 jobless rate, which counts both the unemployed and underemployed, fell to a 19-year low of 6.9%. Monthly job creation has averaged 161,000 so far in 2019, down from 223,000 in 2018. This may reflect the challenge companies face trying to fill job openings in an economy with so little unemployment.

The next earnings season is just ahead. Before it begins, let’s take a look back at the third quarter.

S&P 500 Ends Quarter Higher
In a statistical coincidence, the Dow Jones Industrial Average and S&P 500 gained the same percentage in the quarter: 1.19%. The Dow settled at 26,916.83 on September 30; the S&P, at 2,976.74. Both indices registered their third straight quarterly advance. The Nasdaq Composite went sideways for Q3, ending the quarter 0.09% lower at 7,999.34.

U.S.-China Trade Disagreement Continued
On August 1, the U.S. announced tariffs on an additional $300 billion of Chinese products – some would be effective September 1; others, effective by December 15. Four days later, China devalued its main currency, the yuan, to a level unseen in 11 years – a move that immediately sent U.S. stocks 3% lower. (Devaluing the yuan made Chinese goods cheaper for buyers paying for them in dollars, effectively offsetting the impact of U.S. tariffs.) As September concluded, however, word came that trade representatives from both nations would resume talks on October 10.

The Fed Made a Move
The Federal Reserve lowered the country’s short-term interest rate by a quarter-point on September 18, to a range of 1.75% to 2.00%. Federal Reserve Chairman Jerome Powell, speaking to the media after the decision, called the outlook for the U.S. economy “favorable.” At the same time, he noted “a lot of uncertainty” surrounding the near-term economy and the Fed’s monetary policy views.

What’s Next
Trade representatives from the U.S. and China return to the negotiating table on Thursday; their meeting is scheduled to conclude on Friday. Any news stemming from their talks could quickly affect equity markets, both here and abroad.

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: Federal Reserve Chairman Jerome Powell speaks at the annual meeting of the National Association for Business Economics in Denver.
Wednesday: The Federal Reserve publishes the minutes from its September meeting.
Thursday: The Bureau of Labor Statistics presents the August Consumer Price Index, showing monthly and yearly inflation data.
Friday: The University of Michigan offers its preliminary October Consumer Sentiment Index, a measure of consumer confidence levels.

Source: Econoday, October 4, 2019
The Econoday and Federal Reserve 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: Domino’s (DPZ)
Thursday: Delta Air Lines (DAL)
Friday: Citigroup (C), Fastenal (FAST)

Source: Zacks, October 4, 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://finance.yahoo.com/news/ism-manufacturing-101500823.html
https://www.investing.com/news/economic-indicators/newsbreak-ism-services-index-tumbles-to-3year-low-1991459
https://www.usatoday.com/story/money/2019/10/04/september-jobs-report-economy-added-135-000-145-000-were-forecast/3859017002/
https://www.barrons.com/articles/the-dow-rose-97-points-because-we-still-want-to-invest-money-in-china-51569879471
https://www.marketwatch.com/investing/index/comp/historical
https://www.piie.com/blogs/trade-investment-policy-watch/trump-trade-war-china-date-guide
https://www.bloomberg.com/news/articles/2019-08-04/asia-stocks-set-to-drop-with-trade-back-in-focus-markets-wrap
https://www.cnbc.com/2019/09/30/us-stocks-investors-monitor-us-china-trade-impeachment-inquiry.html
https://www.reuters.com/article/us-usa-fed/fed-cuts-rates-on-7-3-vote-gives-mixed-signals-on-next-move-idUSKBN1W32H7
Special Update: Quarterly Report2019-10-07T12:16:25-04:00

Benchmarks End Week Lower

The Weekly Update

Week of September 30th, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Stocks retreated last week. Traders worried that the formal impeachment inquiry of President Donald Trump might distract White House officials from their pursuit of a trade deal with China and shift the focus of Congress away from consideration of the United States-Mexico-Canada Agreement (USMCA). Also, news broke Friday that the White House was considering restricting levels of U.S. investment in Chinese firms.

The Dow Jones Industrial Average lost less than the Nasdaq Composite and S&P 500. Blue chips declined 0.43% week-over-week, while the S&P fell 1.01% and the Nasdaq dipped 2.19%. The MSCI EAFE index, tracking developed overseas stock markets, lost 0.89%. , ,

Incomes Grow, Spending Slows
Data released Friday by the Bureau of Economic Analysis showed household incomes rising 0.4% in August. Consumer spending improved just 0.1%, however; that was the smallest personal spending advance in six months.

Another BEA report noted that “real” consumer spending (that is, consumer spending adjusted for inflation) rose 4.6% during the second quarter. ,

A Slip in Consumer Confidence
The Conference Board’s Consumer Confidence Index fell to 125.1 for September. That compares to a reading of 134.2 in August. Lynn Franco, the CB’s director of economic indicators, wrote that “the escalation in trade and tariff tensions in late August appears to have rattled consumers. However, this pattern of uncertainty and volatility has persisted for much of the year and it appears confidence is plateauing.”

In contrast, the University of Michigan’s Consumer Sentiment Index ended September at 93.2, an improvement from a final August mark of 89.8. ,

What’s Ahead
On October 10, the Social Security Administration is scheduled to announce the 2020 cost of living adjustment (COLA) for Social Security retirement benefits. Earlier this month, Bureau of Labor Statistics yearly inflation data pointed to a possible 2020 COLA in the range of 1.6%-1.7%.

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The Institute for Supply Management presents its September Purchasing Managers Index for the factory sector, a barometer of U.S. manufacturing health.
Wednesday: ADP, the payroll processor, releases its September National Employment Report.
Thursday: ISM’s non-manufacturing PMI arrives, reporting on the state of the U.S. service sector.
Friday: The Department of Labor’s September jobs report appears, and Federal Reserve Chairman Jerome Powell gives a keynote speech at a Fed event in Washington D.C.

Source: Econoday, September 27, 2019
The Econoday economic calendar lists 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
Wednesday: Lennar (LEN), Paychex (PAYX)
Thursday: Constellation Brands (STZ), Costco (COST), PepsiCo (PEP)

Source: Zacks, September 27, 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.cnn.com/2019/09/27/investing/dow-stock-market-today-oil/index.html
https://www.wsj.com/market-data
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.marketwatch.com/story/consumer-spending-barely-rises-in-august-as-americans-save-more-2019-09-27
https://www.investing.com/economic-calendar
https://www.conference-board.org/data/consumerconfidence.cfm
https://www.marketwatch.com/story/consumer-sentiment-rebounds-in-september-but-americans-more-anxious-2019-09-27
https://finance.yahoo.com/news/3-events-could-push-social-100600194.html
Benchmarks End Week Lower2019-09-30T12:45:04-04:00

Getting Strategic with Social Security

Getting Strategic with Social Security

While social security should be just a portion of your overall retirement strategy, it’s an important part to get right. Grab a copy of our new resource that provides information on how the Social Security system works and strategies for getting the best benefit possible. http://bit.ly/2mbu0xF.

Getting Strategic with Social Security2019-09-25T13:45:38-04:00

Stocks Stage a Modest Retreat

The Weekly Update

Week of September 23, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Investors reacted to two major news items last week, one far more of a surprise than the other. The Federal Reserve did indeed make a rate cut, matching Wall Street expectations. Drone strikes on two of the world’s largest oil fields brought a shock to the global oil market.

At Friday’s closing bell, stocks wound up with weekly losses after news broke that Chinese trade officials were heading home dowfrom the U.S. sooner than planned. The S&P 500 retreated 0.51% week-over-week; the Dow Jones Industrial Average lost 1.05%, and the Nasdaq Composite dipped 0.72%. In developed foreign markets, shares tracked by the MSCI EAFE index fell 0.31%.

Another Quarter-Point Cut
Wednesday, the Federal Open Market Committee voted 7-3 to lower the benchmark interest rate by another 0.25%, to a range of 1.75% to 2.00%.

While traders looked for signs of future guidance on monetary policy, little emerged from the latest Fed policy statement and Fed chair Jerome Powell’s subsequent press conference. The updated dot-plot forecast showed that seven Fed officials anticipated at least one more cut before 2020, while ten did not.

Oil Prices Jump
As last week began, crude oil futures spiked in response to an attack that interrupted roughly 5% of the world’s oil production. The value of West Texas Intermediate crude, the U.S. benchmark, spiked 14.7% in a day, starting at $8.05 and reaching $62.90 by Monday’s close.

This was oil’s biggest one-day leap since September 2008. Prices came down from there: Friday, WTI crude settled at $58.48.

Final Thought
So, what day last week saw the biggest loss or gain for stocks? Not Monday, when the market absorbed news of the Saudi oil field strike. Not Wednesday, when the Fed rate cut occurred. Instead, it was Friday, when the S&P 500 lost only 0.49%. It just goes to show that stocks may ride through seemingly market-moving events with little daily change.

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The Conference Board’s September Consumer Confidence Survey.
Wednesday: August new home sales data from the Census Bureau.
Thursday: The federal government’s third estimate of second-quarter economic growth.
Friday: August personal spending numbers from the Bureau of Economic Analysis, and September’s final University of Michigan Consumer Sentiment Index, measuring consumer confidence levels.

Source: Econoday, September 20, 2019
The Econoday economic calendar lists 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: AutoZone (AZO), Cintas (CTAS), Nike (NKE)
Thursday: Accenture (ACN), Carnival (CCL), Micron Technology (MU)

Source: Zacks, September 20, 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.marketwatch.com/story/dow-skids-to-friday-lows-amid-reports-that-chinas-delegation-has-canceled-a-tariff-related-visit-2019-09-20
https://www.wsj.com/market-data
https://quotes.wsj.com/index/XX/990300/historical-prices
https://www.reuters.com/article/us-usa-fed/fed-cuts-rates-on-7-3-vote-gives-mixed-signals-on-next-move-idUSKBN1W32H7
https://www.marketwatch.com/story/us-oils-10-surge-after-saudi-attack-puts-it-on-track-for-the-biggest-daily-gain-in-312-years-2019-09-15
https://money.cnn.com/data/commodities/index.html
https://money.cnn.com/data/markets/sandp/
Stocks Stage a Modest Retreat2019-09-27T11:42:41-04:00

Dow Logs 8-Day Win Streak

The Weekly Update

Week of September 16, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Stocks edged toward all-time peaks during a relatively calm week marked by easing trade tensions. Friday marked the eighth straight daily advance for the Dow Jones Industrial Average.

Small-cap shares, as tracked by the Russell 2000 index, rose 4.85% in five days. The S&P 500 improved 0.96% for the week, while the Dow and Nasdaq Composite respectively advanced 1.57% and 0.91%. Foreign shares added 1.22%, according to the MSCI EAFE index.

A Delay for Planned October Tariff Hikes
Existing tariffs on $250 billion of Chinese imports were slated to rise from 25% to 30% on October 1, but the White House decided Thursday to postpone the increase until October 15, in a “gesture of good will” honoring a request from Chinese Vice Premier Liu He.

Bloomberg reported last week that some White House officials were considering an “interim” trade agreement that could pause some import taxes on Chinese products, so long as China agrees to buy specific U.S. crops and address intellectual property concerns.

More Risk Appetite
Last week’s conciliatory gestures between the U.S. and China influenced the bond market. By Friday’s close, the 10-year Treasury yield had climbed to 1.90%, up 0.35% for the week after a big selloff. (A rise in bond yields generally reflects a drop in bond prices.)

Inflation Pressure Increases
Yearly core inflation reached a 13-month peak of 2.4% in August, according to the federal government’s Consumer Price Index. Core inflation (which excludes volatile food and fuel costs) has now increased for three straight months.

What’s Next
This week, traders await the Federal Reserve’s latest policy announcement. Whether the Fed chooses cut short-term interest rates, any guidance in the statement will be highly scrutinized, as Wall Street is eager to discern any hints about whether the Fed is prepared to continue cutting short-term rates.

THE WEEK AHEAD: KEY ECONOMIC DATA
Wednesday: The Federal Reserve’s policy announcement is scheduled for 2:00pm EST, and Fed chair Jerome Powell is slated to address the media at a subsequent press conference.
Thursday: The National Association of Realtors issues its August existing home sales report.

Source: Econoday / Federal Reserve, September 13, 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: Adobe (ADBE), FedEx (FDX)
Wednesday: General Mills (GIS)
Thursday: Darden Restaurants (DRI)

Source: Zacks, September 13, 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/2019/09/13/stock-markets-dow-sp-500-close-to-all-time-highs-on-wall-street.html
https://money.cnn.com/data/markets/russell/
https://www.wsj.com/market-data
https://quotes.wsj.com/index/XX/990300/historical-prices
https://finance.yahoo.com/news/stock-market-news-september-12-2019-121421711.html
https://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
https://www.investing.com/economic-calendar/core-cpi-736
Dow Logs 8-Day Win Streak2019-09-18T10:36:46-04:00

Boss Ladies of Chicago

Boss Ladies of Chicago

Chicago is the third largest city in the U.S. but has the highest concentration of women founders. With such a large population of boss ladies in our great city, we thought it was time to celebrate the work being done by six of these visionaries. Take a look at this. http://bit.ly/bossladieschicago

Boss Ladies of Chicago2019-09-12T11:31:42-04:00

Dow, Nasdaq, S&P 500 Advance

The Weekly Update

Week of September 9, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Stocks rose last week, with help from two developments: the announcement of further U.S.-China trade talks as well as August hiring and manufacturing numbers that seemed to bolster the argument for a rate cut by the Federal Reserve.

The broad U.S. equity market, as represented by the S&P 500, added 1.79% during a 4-day trading week. The Dow Jones Industrial Average improved 1.49%; the Nasdaq Composite, 1.76%. Foreign shares tracked by the MSCI EAFE index gained 1.69%.

Trade Talks Poised to Restart
Trade representatives from the U.S. and China are planning to head back to the negotiating table early next month. This news came Thursday from China’s ministry of commerce, which confirmed a verbal agreement among Secretary of the Treasury Steven Mnuchin, U.S. Trade Representative Robert Lighthizer, and Chinese Vice Premier Liu He.

Formal trade discussions between the U.S. and China last happened in July. China has said that it wants punitive U.S. tariffs on its products removed in the event of a deal.

Weaker Hiring & Manufacturing Data
Payrolls expanded with just 130,000 net new jobs in August, according to the Department of Labor; 25,000 were temp jobs linked to the federal government’s 2020 Census. The main jobless rate stayed at 3.7%. The U-6 rate, which measures both unemployment and underemployment, rose 0.2% to 7.2%.

A key gauge of U.S. factory activity, the Institute for Supply Management’s manufacturing purchasing manager index, fell to 49.1 in August. A number below 50 indicates factory sector contraction. Some investors took these hiring and manufacturing reports as hints of a slowing economy, one which the Federal Reserve could potentially try to stimulate with an interest rate cut.

What’s Ahead
August inflation data arrives this week, and if looks especially mild, it may amount to another suggestion that the Fed should ease. The European Central Bank concludes a meeting on Thursday, and Fed officials will certainly pay attention to its latest policy statement.

THE WEEK AHEAD: KEY ECONOMIC DATA
Thursday: A new Consumer Price Index, tracking both monthly and yearly inflation.
Friday: The August retail sales report from the Census Bureau.

Source: Econoday / MarketWatch Calendar, September 6, 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
Thursday: Broadcom (AVGO), Kroger (KR)

Source: Zacks, September 6, 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.cbsnews.com/news/u-s-china-trade-talks-scheduled-for-october-beijing-says-2019-09-05/
https://www.bloomberg.com/news/articles/2019-09-06/u-s-payrolls-rise-130-000-boosted-by-25-000-for-census-count
https://tradingeconomics.com/united-states/business-confidence
https://www.cnbc.com/2019/09/06/stocks-look-to-reclaim-their-all-time-highs-in-the-week-ahead.html
Dow, Nasdaq, S&P 500 Advance2019-09-09T13:58:08-04:00

Stocks Rally as August Ends

The Weekly Update

Week of September 3, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Fears of an impasse in the U.S.-China trade dispute lessened last week. While additional U.S. tariffs on Chinese imports were scheduled to take effect on September 1, China’s government communicated that it would refrain from taking retaliatory measures for the moment.

U.S. stock benchmarks advanced during the week. The S&P 500 rose 2.79% across five trading days, and the Nasdaq Composite and Dow Jones Industrial Average respectively gained 2.72% and 3.02%. The MSCI EAFE international index added just 0.25%.

Positive News in the Trade Dispute
Thursday, a spokesman for China’s commerce ministry said that negotiations could resume this month, and that discussions need to focus on “removing the new tariffs to prevent escalation.”

In addition, officials in Beijing indicated they would hold off on responding to the U.S. tariff hikes announced Friday by the White House.

Mixed Consumer Confidence Signals
The Conference Board’s monthly consumer confidence index was at 135.1 in August. Analysts polled by Reuters had projected a reading of 129.5. Consumers’ view of the present economic situation was the best since November 2000.

On the other hand, the University of Michigan’s monthly consumer sentiment index (based on a different collection of survey data) dropped 8.6 points during August to 89.8; that was its biggest monthly descent in nearly seven years. ,

What’s Next
After a pause for the Labor Day holiday, U.S. financial markets have an abbreviated trading week. The August jobs report may influence Friday’s Wall Street session, and any news pertaining to U.S.-China trade talks could also influence the markets.

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The Institute for Supply Management releases its August purchasing managers index (PMI) for the factory sector, assessing U.S. manufacturing activity.
Thursday: ISM presents its August PMI for the service sector, and payroll giant ADP publishes its latest private-sector employment snapshot.
Friday: The Department of Labor offers its August employment report.

Source: Econoday / MarketWatch Calendar, August 30, 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
Wednesday: Palo Alto Networks (PANW), Slack Technologies (WORK)
Thursday: Lululemon Athletica (LULU)

Source: Zacks, August 30, 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.marketwatch.com/story/dow-futures-up-over-250-points-as-china-tamps-down-fears-of-further-trade-war-escalation-2019-08-29
https://www.cnbc.com/2019/08/27/us-consumer-confidence-august-2019-index-dips.html
http://www.sca.isr.umich.edu/
Stocks Rally as August Ends2019-09-03T12:36:13-04:00

China Announces More Tariffs

The Weekly Update

Week of August 26, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Traders assumed that the week’s biggest news event would be Federal Reserve Chairman Jerome Powell’s speech at the annual Jackson Hole banking conference. Instead, China seized the headlines by announcing new tariffs on U.S. goods.

Domestic stocks ended up lower for the week. The Nasdaq Composite fell 1.83%; the S&P 500, 1.44%; the Dow Jones Industrial Average, 0.99%. International stocks posted a weekly gain: the MSCI EAFE benchmark rose 0.96%.

Beijing Plans New Tariffs
Friday morning, China’s finance ministry stated it would levy import taxes of 5-10% on an additional $75 billion of American imports. One set of tariffs is slated to start September 1, targeting U.S. crops, meats, and seafood. A second set, effective December 15, will put tariffs on U.S.-made cars and car parts. In total, these taxes are scheduled for more than 5,000 American products.

Friday evening, the White House announced two rounds of 5% increases on existing U.S. tariffs on Chinese goods, to be successively implemented on September 1 and October 1.

Powell Reflects at Jackson Hole
Friday, Jerome Powell delivered an address on monetary policy at the Kansas City Fed’s annual Jackson Hole symposium. He noted that the global economy currently presented a “complex, turbulent picture,” and added that the Fed was “carefully watching developments” and would “act as appropriate.”

Investors wonder if the central bank will consider another rate cut at its September meeting. Comments from other Fed officials at Jackson Hole did not indicate a consensus on that matter.

Leading Indicators Rise
The Conference Board, the business research group known for its monthly Consumer Confidence Index, also publishes a monthly Leading Economic Indicator (LEI) Index. The Conference Board LEI provides a forward-looking analysis of the health of the business cycle, looking at ten factors ranging from consumer expectations to stock prices to construction activity.

In July, the LEI rose 0.5%, following 0.1% descents in May and June. This sudden increase offers optimism at a time when investors are wondering about the momentum of the economy.

Final Thought
Bond prices have risen around the world, leading to lower bond yields. In some instances, yields have turned negative. While the yield on the 10-year Treasury has also declined, it is still above 1.5%, notably exceeding the yields of similar-duration bonds in France, Germany, Spain, and the United Kingdom.

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The Conference Board’s July Consumer Confidence Index.
Thursday: The Bureau of Economic Analysis presents the second estimate of second-quarter economic growth, and the National Association of Realtors publishes new data on pending home sales.
Friday: July consumer spending data from the Department of Commerce, and July’s final University of Michigan Consumer Sentiment Index (a gauge of consumer confidence levels).

Source: Econoday / MarketWatch Calendar, August 23, 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: Autodesk (ADSK)
Thursday: Abercrombie & Fitch (ABF), Best Buy (BBS), Lululemon Athletica (LULU)

Source: Zacks, August 23, 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.cnn.com/2019/08/23/business/china-tariff-products-soybeans-oil/index.html
https://www.marketwatch.com/story/trump-says-us-tariffs-will-increase-on-chinese-goods-2019-08-23
https://www.marketwatch.com/story/powell-says-fed-carefully-watching-developments-and-will-act-as-appropriate-2019-08-23-10103027
https://www.conference-board.org/data/bcicountry.cfm?cid=1
https://www.cnbc.com/2019/08/20/investing-in-the-strange-negative-yield-world-its-very-hard-to-wrap-your-arms-around.html
China Announces More Tariffs2019-08-26T14:33:38-04:00

Equities Face Some Volatility

The Weekly Update

Week of August 19, 2019
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
U.S. stock indices saw significant ups and downs last week, with traders looking for economic cues from Treasury yields and also developments in the tariff fight between the U.S. and China.

The S&P 500 lost 1.03% on the week; the Dow Jones Industrial Average and Nasdaq Composite respectively declined 1.53% and 0.79%. Overseas shares also retreated: the MSCI EAFE index lost 2.34%.

Attention on the Bond Market
Wednesday, the yield of the 2-year Treasury bond briefly exceeded that of the 10-year Treasury bond. When this circumstance occurs, it signals that institutional investors are less confident about the near-term economy. That view is not uniform. Asked whether the U.S. was on the verge of an economic slowdown, former Federal Reserve Chair Janet Yellen told Fox Business “the answer is most likely no,” noting that the economy “has enough strength” to avoid one.

The demand for bonds has definitely pushed prices for 10-year and 30-year Treasuries higher, and their yields are now lower (bond yields usually fall as bond prices rise). The 30-year Treasury yield hit a historic low last week.

Some China Tariffs Postponed
Last week, the Office of the U.S. Trade Representative announced that about half the Chinese imports slated to be taxed with 10% tariffs starting September 1 would be exempt from such taxes until December 15.

The White House said that the reprieve was made with the upcoming holiday shopping season in mind, so that tariffs might have less impact on both retailers and consumers.

Final Thought
Lower interest rates on bonds are now influencing mortgages. According to mortgage reseller Freddie Mac, the average interest rate on a conventional 30-year home loan was just 3.6% last week. That compares to 3.81% roughly a month ago (July 18).

30-year and 15-year fixed rate mortgages are conventional home loans generally featuring a limit of $484,350 ($726,525 in high-cost areas) that meet the lending requirements of Fannie Mae and Freddie Mac, but they are not mortgages guaranteed or insured by any government agency. Private mortgage insurance, or PMI, is required for any conventional loan with less than a 20% down payment.

THE WEEK AHEAD: KEY ECONOMIC DATA
Wednesday: The minutes of the July Federal Reserve meeting and the latest existing home sales data from the National Association of Realtors.
Friday: Federal Reserve Chairman Jerome Powell delivers a speech at the Fed’s annual Jackson Hole economic conference on monetary policy, and July new home sales numbers arrive from the Census Bureau.

Source: Econoday / MarketWatch Calendar, August 16, 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: Baidu (BIDU), Estee Lauder (EL)
Tuesday: Home Depot (HD), Medtronic (MDT), TJX Companies (TJX)
Wednesday: Analog Devices (ADI), Lowe’s (LOW), Target (TGT)
Thursday: Salesforce (CRM), Intuit (INTU)

Source: Zacks, August 16, 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/2019/08/15/us-bonds-30-year-treasury-yield-falls-below-2percent-for-first-time-ever.html
https://www.foxbusiness.com/economy/janet-yellen-to-wall-street-a-recession-is-unlikely
https://www.reuters.com/article/us-usa-trade-china-tariffs/trump-delays-tariffs-on-chinese-cellphones-laptops-toys-markets-jump-idUSKCN1V31CX
http://www.freddiemac.com/pmms/archive.html
Equities Face Some Volatility2019-08-19T14:15:04-04:00
Load More Posts