Weekly Update

The Weekly Update

Week of September 17, 2018
By Christopher T. Much, CFP®, AIF®

Last week, the East Coast prepared for Hurricane Florence, which roared through the Carolinas and Georgia. As investors kept their eyes on the weather and its potential for destruction, estimates emerged of up to $27 billion in hurricane damage. This potential for damage contributed to insurance companies in the S&P 500 declining last week. While the hurricane likely won’t have a large effect on our economy, its destruction could influence data for months to come.

Meanwhile, last week brought another milestone in our economy: the 10th anniversary of Lehman Brothers’ bankruptcy.

For 158 years, the Wall Street firm weathered the markets’ changes. By 2008, however, various challenges, including excessive risk taking, led to its demise. The firm’s unexpected bankruptcy announcement shocked investors and triggered market panic, leading what was a simmering financial crisis to become the Great Recession. A …

The Weekly Update

Week of September 10, 2018
By Christopher T. Much, CFP®, AIF®

Domestic markets fell last week due to negative trade news and declining tech stocks, with the S&P 500 and Dow both breaking their multi-week winning streaks. Meanwhile, the NASDAQ posted losses for 4 days in a row for the first time since April and experienced its worst September start since 2008. Overall, the S&P 500 lost 1.03%, the Dow dropped 0.19%, and the NASDAQ gave back 2.55% for the week. International stocks in the MSCI EAFE also declined, losing 2.89%.

The Cboe Volatility Index (VIX), which can help gauge market fears, increased 15.8% last week. This increase matches what often occurs during September, when volatility returns after waning during the summer months. In fact, since 2007, volatility has been above average in September.

Of course, the change from one month or season to another isn’t enough to trigger market …

The Weekly Update

Week of September 3, 2018
By Christopher T. Much, CFP®, AIF®

Trade continued to dominate the news last week and cause market volatility as investors monitored discussions of the North American Free Trade Agreement (NAFTA) and tension with China. While Mexico and the U.S. reached a new trade deal early in the week, talks with Canada stalled on Friday, August 31. Reports also came out that President Trump may be adding tariffs on another $200 billion in Chinese goods. Domestic markets increased for the week and ended August in positive territory. The S&P 500 and Dow each had their best August since 2014—while the NASDAQ’s 5.7% growth was its best performance for the month since 2000. On Wednesday, the S&P 500 reached a new record high. For the week, the S&P 500 gained 0.93%, the Dow added 0.68%, and the NASDAQ increased 2.06%. International stocks in the MSCI …

The Weekly Update

Week of August 27, 2018
By Christopher T. Much, CFP®, AIF®

Last week marked a noteworthy milestone in our economy: On Wednesday, August 22, the bull market entered its 3,453rd day, the longest such run in U.S. history. In the past 9 plus years, domestic indexes have come quite a way since the dark days of the financial crisis. The S&P 500 is now more than 4 times the level that it was when the bull market began on March 9, 2009.

In fact, both the S&P 500 and NASDAQ closed last week with new record highs. The S&P 500 added 0.86%, the Dow increased 0.47%%, and the NASDAQ gained 1.66%. International stocks in the MSCI EAFE also grew, increasing 1.52% for the week.

This domestic growth occurred against a backdrop of geopolitical events. Investors considered new tariffs between China and the U.S., as well as legal developments potentially related …

The Weekly Update

Week of August 20, 2018
By Christopher T. Much, CFP®, AIF®

Challenges in emerging markets affected both U.S. and global stock performance last week, with the S&P 500 experiencing several down days. By market close on Friday, however, two of the three major domestics posted gains for the week. The S&P 500 added 0.59%, the Dow increased 1.41%, and the NASDAQ lost 0.29%. Meanwhile, the MSCI EAFE international stocks slipped 1.18%.

As several reports deepened our understanding of the economy’s underlying health, investors balanced the news with updates on Turkey and trade disputes. Here are some key highlights of the various developments:

Economy: Mixed Picture
The latest unemployment data beat expectations, indicating continuing strength as the labor market is near full employment. However, new home construction missed its 7.4% projected growth, increasing only 0.9% in July—following June’s 12.3% decline. Nevertheless, more positive news emerged: Thanks to tax cuts, a solid labor …

The Weekly Update

Week of August 13, 2018
By Christopher T. Much, CFP®, AIF®

Stocks ended the week in mixed territory as trouble with Turkey’s currency affected U.S. equity performance on Friday, August 10. For the week, the S&P lost 0.25%, the Dow declined 0.59%, and the NASDAQ increased 0.35%. International stocks in the MSCI EAFE stumbled, giving back 1.57%.

Although last week brought relatively few economic updates, we did learn that the labor market continues to improve, and consumer prices are on the rise. While this news may have affected market performance, the challenges facing Turkey’s economy had an outsize impact on global stocks.

What happened to the Turkish lira?
The Turkish lira dropped 14% to 6.46 per dollar, the weakest on record with the largest drop in more than 17 years. The lira ended the week at a record low against the U.S. dollar. Tension between the U.S. and Turkey played a …

The Weekly Update

Week of August 6, 2018
By Christopher T. Much, CFP®, AIF®

Domestic markets ended last week in positive territory, as the S&P gained 0.76%, the Dow was up 0.05%, and the NASDAQ increased 0.96%. This performance marked the 5th week in a row that the S&P 500 and Dow posted gains. Meanwhile, international stocks in the MSCI EAFE stumbled, losing 1.47% for the week.

Once again, trade and corporate earnings were in the news last week. We learned that the U.S. is considering increasing tariffs on $200 billion of Chinese imports. In response, China announced their own tariffs ranging from 5%–25% on $60 billion of U.S. products.

Corporate earnings season also continued, and so far, more than 78% of S&P 500 companies have beaten estimates. If the trend holds, the 2nd quarter will likely average more than 20% growth in earnings per share. Companies have also detailed positive perspectives for …

CTS Half Time Report – August 2018

Here’s our new piece that walks through some market fundamentals from the 1st half of 2018. If we tune out geopolitics and market commentary for a moment, and focus instead on market fundamentals, we may begin to get a clearer picture of the economy. https://bit.ly/2AG4tTY

The Weekly Update

Week of July 30, 2018
By Christopher T. Much, CFP®, AIF®

Markets experienced a push-and-pull last week between data indicating strong economic growth and lagging performance from several tech stocks’ earnings reports. Domestic indexes had mixed results, as the S&P 500 gained 0.61%, the Dow was up 1.57%, and the NASDAQ dropped 1.06%. International stocks in the MSCI EAFE had more of an uptick, gaining 1.32% for the week.

On Friday, July 27, we received the initial reading of 2nd quarter Gross Domestic Product (GDP). The report indicated that the economy grew at a 4.1% annual rate between April and June. This reading was the fastest pace in almost 4 years-and significantly higher than 1st quarter growth. Markets, however, had a relatively mild reaction to the GDP data due to rumors predicting even higher results.

Let’s dig beyond the headline GDP growth number to see what else it tells us …

The Weekly Update

Week of July 22, 2018
By Christopher T. Much, CFP®, AIF®

On Friday, July 20, stocks lost a small amount of ground after President Trump escalated his threats of increasing tariffs on China. However, strong quarterly earnings reports from several large companies helped provide balance in the markets. For the week, domestic indexes experienced little movement, as the S&P gained 0.02%, the Dow was up 0.15%, and the NASDAQ dropped 0.07%. International stocks in the MSCI EAFE had slightly more change, with a 0.63% gain.

What We Learned Last Week

• Corporate earnings rose in the 2nd quarter
  As of July 20, 87 S&P 500 companies have released their 2nd quarter data. Of these companies, 83.9% surpassed analysts’ estimated results. In fact, the earnings season is going well enough that analysts have increased their growth projections. They now expect to see companies average 22% earnings growth over the past year, up …