Happy Independence Day

Happy Independence Day

Happy Independence Day2020-07-03T08:20:21-04:00

Rise in Cases Inspires Turbulence

The Weekly Update

Week of June 29th, 2020
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
A jump in COVID-19 cases dampened investor enthusiasm last week, sending stock prices lower on worries that rising infections could derail the economic recovery.

The Dow Jones Industrial Average slumped 3.31%, while the Standard & Poor’s 500 retreated 2.86%. The Nasdaq Composite Index lost 1.90% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, declined 1.28%.

A Rocky Week for Stocks
Investors began the week overlooking a jump in COVID-19 cases in some early reopening states, sending stocks higher and powering the NASDAQ Composite to close above 10,000 and establish a new record high on successive days. But the market quickly reversed course as investors reacted to data showing a troubling spike in nationwide COVID-19 cases.

In Thursday’s trading, stocks opened lower but then rallied late in the day on no apparent news. Stocks resumed their decline on Friday, falling on news that Texas and Florida were rolling back some reopening plans amid rising COVID-19 infections.

COVID-19 Cases
Investor expectations for an economic rebound took a hit last week, following reports of an increase in nationwide COVID-19 cases. The pace of infections had picked up in 33 states, with the seven-day average of new cases higher than the average over the last two weeks.

While traders understood that reopening and increased testing would lead to an uptick in reported cases, the numbers were a bit unsettling. The week’s action reminded investors that the market remains tightly tethered to COVID-19 developments.

THIS WEEK: KEY ECONOMIC DATA
Wednesday: ADP (Automatic Data Processing) Employment Report. Purchasing Managers Index (PMI) Manufacturing Index. Institute for Supply Management (ISM) Manufacturing Index. Federal Open Market Committee (FOMC) Minutes.
Thursday: Employment Situation Report. Jobless Claims. Factory Orders.

Source: Econoday, June 26, 2020
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.

THIS WEEK: COMPANIES REPORTING EARNINGS
Monday: Micron Technologies (MU).
Tuesday: FedEx Corp. (FDX), Conagra Brands (CAG).
Wednesday: Constellation Brands (STZ), General Mills (GIS).

Source: Zacks, June 26, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. 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.
The Wall Street Journal, June 25, 2020
The Wall Street Journal, June 26, 2020
Marketwatch.com, June 23, 2020
FoxBusiness.com, June 26, 2020
Rise in Cases Inspires Turbulence2020-06-29T14:20:52-04:00

U.S. Economy Gains Momentum

The Weekly Update

Week of June 22nd, 2020
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Stocks moved higher last week on news of more Federal Reserve market support and diminished concerns that new COVID-19 cases might lead to another economic shutdown.

The Dow Jones Industrial Average rose 1.04%, while the Standard & Poor’s 500 gained 1.86%. The Nasdaq Composite Index jumped 3.73% for the week. The MSCI EAFE Index, which tracks developed overseas stock markets, increased 1.88%.

Investor Sentiment
News on Monday that the Fed would be expanding its bond-buying program to include the debt of individual companies sparked a sharp jump in stocks. The momentum gained through the week as investors focused on positive economic signals, especially with retail sales. A midweek report of an effective COVID-19 treatment for critically ill patients boosted investor optimism.

Market sentiment also was helped by talk of more fiscal stimulus and a report that China would be moving ahead with agricultural purchases to comply with phase one of the trade deal, easing concerns over growing friction in the U.S.-China relationship.

Mixed Economic Data
Last week’s economic data illustrated the uneven nature of the nation’s nascent economic recovery.

Retail sales, which were up by 17.7% in May, reflected a strong, encouraging rebound in the U.S. consumer. Consumer spending was particularly strong in clothing, furniture, sporting goods, and autos.

But industrial production (up by only 1.4%) and new housing starts (ahead by just 4.3%) showed tepid rebounds, indicating that recovery has yet to reach all corners of the American economy. Jobless claims posted their best number since mid-March (1.5 million), but remained high by historical standards.

Final Thoughts
Last week saw the flare-up of border tensions in two geopolitical hotspots: North Korea and the disputed border region between China and India. The hope, of course, is that escalation can be avoided through diplomacy, but any heightening in tensions may become a concern for global markets.

THIS WEEK: KEY ECONOMIC DATA
Monday: Existing Home Sales.
Tuesday: New Home Sales.
Thursday: Durable Goods Orders. Gross Domestic Product (GDP). Jobless Claims.
Friday: Consumer Sentiment.

Source: Econoday, June 19, 2020
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.

THIS WEEK: COMPANIES REPORTING EARNINGS
Wednesday: KB Home (KBH).
Thursday: Accenture Plc (ACN), Darden Restaurants (DRI).

Source: Zacks, June 19, 2020
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. 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.
The Wall Street Journal, June 19, 2020
The Wall Street Journal, June 18, 2020
The Wall Street Journal, June 16, 2020
MarketWatch, June 16, 2020
CNBC, June 17, 2020
U.S. Economy Gains Momentum2020-06-22T12:59:41-04:00

Insurance: Getting Married

Insurance: Getting Married

Marriage changes everything, including insurance needs. Even if you and your spouse lived together and shared expenses while dating, you may have new responsibilities – and opportunities – for your insurance policies. We examine six topics to help you better understand the insurance landscape after marriage. http://bit.ly/3ebCV8C

Insurance: Getting Married2020-06-19T11:50:26-04:00

Markets React to Fed Report

The Weekly Update

Week of June 15th, 2020
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Investor sentiment turned negative last week, amid an increasing number of COVID-19 cases in states where reopening has been underway as well as a subdued economic forecast from the Federal Reserve.

The Dow Jones Industrial Average dropped 5.55%, while the Standard & Poor’s 500 lost 4.78%. The Nasdaq Composite Index slipped 2.30% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, fell 3.10%.

Reality Bites
The optimism that drove stock prices higher these past several weeks slipped away on reports of a jump in COVID-19 cases, which sparked worries of a second wave slowing the economic recovery. The Federal Reserve’s forecast for the economy further dampened investor sentiment.

The week started upbeat with “reopening” stocks, e.g., financials, transportation, retailers, travel and leisure, and industrials, leading the way higher. But the momentum was soon lost as stocks turned mixed on Tuesday and Wednesday and then moved decidedly downward, with the S&P 500 losing 5.9% on Thursday.

Amid a volatile week, big technology companies resumed their market leadership, with the NASDAQ Composite closing above 10,000 for the first time. Stocks pared their losses on Friday, but it wasn’t enough.

Fed Forecasts Economic Growth and Interest Rates
On Wednesday, the Federal Reserve said that it would keep the federal funds rate near zero and maintain its monthly purchases of Treasury bonds and mortgage-backed securities.

The Fed also issued its forecasts for 2020-2022, indicating that it saw its benchmark federal funds rate remaining at zero, with inflation at 0.8% for 2020, increasing to 1.6% in 2021, then to 1.7% in 2022. Fed officials also expect the economy to shrink by 6.5% this year, with Gross Domestic Product growing 5% and 3.5% in 2021 and 2022, respectively. Their forecast for unemployment predicts a steady decline over the next 2½ years, from 9.3% by the end of 2020 to 5.5% in 2022.

THIS WEEK: KEY ECONOMIC DATA
Tuesday: Retail Sales. Industrial Production.
Wednesday: Housing Starts.
Thursday: Jobless Claims. Index of Leading Economic Indicators.

Source: Econoday, June 12, 2020
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.

THIS WEEK: COMPANIES REPORTING EARNINGS
Tuesday: Oracle (ORCL), Lennar (LEN).
Thursday: Kroger (KR).

Source: Zacks, June 12, 2020
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.
The Wall Street Journal, June 12, 2020
The Wall Street Journal, June 11, 2020
CNBC, June 12, 2020
Markets React to Fed Report2020-06-15T13:03:21-04:00

Recovery Optimism Builds

The Weekly Update

Week of June 8th, 2020
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
A positive jobs report sent stocks soaring last Friday, capping a solid week as evidence of a global economic recovery outweighed concerns over civil unrest and tensions with China.

The Dow Jones Industrial Average jumped 6.81%, while the Standard & Poor’s 500 advanced 4.91%. The tech-heavy Nasdaq Composite Index lagged, climbing 3.42%. The MSCI EAFE Index, which tracks developed stock markets overseas, gained 5.52%.

Stocks March Higher
Despite multiple headwinds, stocks rode a wave of optimism over economic recovery and were encouraged by signs that a feared spike in COVID-19 had not occurred.

Firming oil prices and positive global manufacturing data helped boost stocks during the week. The market continued to be led by industry sectors that were most battered in the March decline, as price advances slowed in growth-oriented stocks, primarily technology names.

After a pause on Thursday, stocks surged on Friday when a jobs report surprisingly showed 2.5 million new jobs in May, with the unemployment rate falling to 13.3%. Wall Street expected a jobs decline of over 8 million and an unemployment rate of 19.5%.

A Wall of Worry
While the markets continued to move higher last week, many investors are concerned that the recovery may be hindered by simmering tensions with China and the civil unrest that erupted last week.

China has been a longstanding source of market worry, but the civil unrest introduces a new challenge. For now, the market appears to have shrugged off these concerns.

Final Thought
This past Wednesday marked the best 50-day gain for the S&P 500 in the index’s history. During a period that approximates the lifespan of a mosquito, stock market sentiment has swung from near-absolute despair in late March to positively bullish.

Often, the most impactful lessons in life tend to be those most recently learned. If the last three months have offered investors any lesson, it may be that trying to time the market is a challenging proposition.

THIS WEEK: KEY ECONOMIC DATA
Wednesday: Consumer Price Index (CPI). Federal Open Market Committee (FOMC) Meeting Announcement. Federal Reserve Chair Press Conference.
Thursday: Jobless Claims.

Source: Econoday, June 5, 2020
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.

THIS WEEK: COMPANIES REPORTING EARNINGS
Monday: Coupa Software (COUP).
Tuesday: Chewy (CHWY).
Thursday: Lululemon (LULU).

Source: Zacks, June 5, 2020
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.
The Wall Street Journal, June 4, 2020
The Wall Street Journal, June 5, 2020
CNBC, June 5, 2020
Recovery Optimism Builds2020-06-08T14:34:31-04:00

8 Financial Goals For Your 40th Birthday

8 Financial Goals For Your 40th Birthday

For investors in their 30s, life can feel busy, hectic, and a bit disorganized at times. How do you focus your time and energy on the things that matter most? There are 8 key goals to focus, and we shared those ideas recently on our website. https://bit.ly/36Cb9PF

8 Financial Goals For Your 40th Birthday2020-06-03T14:46:48-04:00

Optimism for Re-Opening

The Weekly Update

Week of June 1st, 2020
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
The shortened week, which began with a powerful two-day rally of trading, was enough to drive the markets into another week of solid gains.
The Dow Jones Industrial Average rose 3.75%, while the Standard & Poor’s 500 advanced 3.01%. The Nasdaq Composite Index climbed 1.77% for the week. The MSCI EAFE Index, which tracks developed stock markets overseas, gained 6.18%.

Rising Optimism
Returning from Memorial Day weekend, stocks surged on rising optimism over economic re-opening, declines in new infections, and progress in the development of a vaccine.

Stocks continued their march higher, lifted by signs that the White House and Congress may be working together to put together another stimulus package. But the momentum lost steam, in part due to news of China’s vote to override Hong Kong’s autonomy. Comments by President Trump on the last day of trading eased concerns.

Rotation in Leadership
The recovery from the March lows has been powered by large-cap growth stocks, especially the mega-cap technology names. However, this week saw new sectors leading the market higher, notably the financials and industrials, while the technology and health care sectors lagged.

This leadership rotation is being referred to by some market commentators as the “re-opening trade.” If these sectors are to remain leaders, it may hinge on a steady economic recovery and escaping a second wave of COVID-19 infections.

THIS WEEK: KEY ECONOMIC DATA
Monday: Purchasing Managers Manufacturing Index (PMI). Institute for Supply Management (ISM) Manufacturing Index.
Wednesday: Automated Data Processing (ADP) Employment Report. PMI Services Index. ISM Non-Manufacturing Index.
Thursday: Jobless Claims.
Friday: Employment Situation Report.

Source: Econoday, May 29, 2020
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.

THIS WEEK: COMPANIES REPORTING EARNINGS
Tuesday: Dick’s Sporting Goods (DKS), Tiffany (TIF), Zoom Video (ZM), Crowdstrike (CRWD)
Wednesday: Cloudera (CLDR), Campbell Soup (CPB)
Thursday: Broadcom (AVGO), Docusign (DOCU), Slack Technologies (WORK)

Source: Zacks, May 29, 2020
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.
The Wall Street Journal, May 29, 2020
The Wall Street Journal, May 29, 2020
The Wall Street Journal, May 29, 2020
CNBC.com, May 28, 2020
FoxBusiness.com, May 29, 2020
Optimism for Re-Opening2020-06-01T13:44:36-04:00

Markets React to Positive Outlook

The Weekly Update

Week of May 26th, 2020
By Christopher T. Much, CFP®, AIF®

The Week on Wall Street
Upbeat comments by the Federal Reserve Chairman and more signs of an economic turnaround combined to help fuel a powerful rally in the stock market last week.

The Dow Jones Industrial Average rose 3.29%, while the Standard & Poor’s 500 advanced 3.20%. The Nasdaq Composite index climbed 3.44% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, gained 3.87%.

Stocks Cheer Fed Support
The markets surged higher to open the week, buoyed by a Sunday night “60 Minutes” interview with Fed Chair Jerome Powell, who said that the Federal Reserve would do everything necessary to support economic recovery. Rising oil prices and more states lifting restrictions added to the overall improving investor outlook.

After a day digesting those gains, stocks moved another leg higher on strong earnings from big retailers and growing optimism over the global economic recovery. Stocks drifted in the final two days of trading as investors worried about heightening tensions between the U.S. and China.

Different Views on the Economic Recovery
Treasury Secretary Steven Mnuchin and Fed Chair Powell testified last week before the Senate Banking Committee, providing Senators with two different views of the nation’s economic outlook.

Secretary Mnuchin suggested a wait-and-see approach before moving ahead with additional fiscal measures. He wants to pause new spending in order to first assess the impact of the already-approved stimulus program. He believes that the economy will experience a “V-shaped” recovery.

Fed Chair Powell, on the other hand, expressed worries that waiting too long for additional fiscal measures may hamper the fragile economic recovery. It was the third time in a week that the Fed Chair suggested more federal spending is needed to help the economic recovery.

Final Thoughts
One of the challenges of assessing the U.S. economy using certain government reports, like the consumer price index or the employment report, is that they are considered “lag indicators.” Lag indicators provide good insight into where we’ve been but are less helpful in looking at the current state of economic activity.

Looking at some “real-time” data can help investors better assess the here-and-now. For example, gasoline deliveries are trending higher, consumer confidence appears to have stabilized, and airlines are seeing more bookings. Even the supply of toilet paper seems less of a concern these days, with Google searches falling to near normal levels.

THIS WEEK: KEY ECONOMIC DATA
Tuesday: Consumer Confidence. New Home Sales.
Thursday: Jobless Claims. Durable Goods Orders. Gross Domestic Product (GDP).

Source: Econoday, May 22, 2020
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.

THIS WEEK: COMPANIES REPORTING EARNINGS
Tuesday: Autozone (AZO)
Wednesday: HP (HPQ), Workday (WDAY), Autodesk (ADSK)
Thursday: Salesforce.com (CRM), Costco (COST), Trip.com (TCOM), Okta (OKTA), Dollar General (DG), Dell Technologies (DELL), VMware (VMW)

Source: Zacks, May 22, 2020
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.
The Wall Street Journal, May 22, 2020
The Wall Street Journal, May 22, 2020
The Wall Street Journal, May 22, 2020
The Wall Street Journal, May 20, 2020
The Wall Street Journal, May 20, 2020
The Wall Street Journal, May 20, 2020
MarketWatch, May 20, 2020
MarketWatch, May 20, 2020
Markets React to Positive Outlook2020-05-26T13:07:46-04:00

Remember and Honor

Remember and Honor

We are fortunate to live in a country protected by courageous men and women who fought for this nation’s freedom and we are grateful to those who made the ultimate sacrifice. Best wishes on Memorial Day from CTS Financial Group.

Remember and Honor2020-05-25T08:25:38-04:00
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