Market Week: August 20, 2018

 

The Markets (as of market close August 17, 2018)

The large caps of the Dow and S&P 500 got a boost from a tentative agreement between the United States and China to settle their trade dispute by November. Strong corporate earnings reports also helped push stocks higher, particularly for the Dow, which rose close to 1.50% by last week’s end. The Nasdaq dipped more than a quarter of a percent while the Russell 2000 climbed higher. Long-term bond yields sank as increasing demand pushed prices higher (bond yields and prices move in opposite directions).

The price of crude oil (WTI) fell again last week, closing at $65.91 per barrel, down from the prior week’s closing price of $67.78 per barrel. The price of gold (COMEX) also dropped last week, closing at $1,191.20 by early Friday evening, down from the prior week’s price of $1,219.30. The national average retail regular gasoline price fell to $2.843 per gallon on August 13, 2018, $0.009 lower than the prior week’s price but $0.459 more than a year ago.

Market/Index 2017 Close Prior Week As of 8/17 Weekly Change YTD Change
DJIA 24719.22 25313.14 25669.32 1.41% 3.84%
Nasdaq 6903.39 7839.11 7816.33 -0.29% 13.22%
S&P 500 2673.61 2833.28 2850.13 0.59% 6.60%
Russell 2000 1535.51 1686.80 1692.95 0.36% 10.25%
Global Dow 3085.41 3046.05 3034.52 -0.38% -1.65%
Fed. Funds target rate 1.25%-1.50% 1.75%-2.00% 1.75%-2.00% 0 bps 50 bps
10-year Treasuries 2.41% 2.87% 2.86% -1 bps 45 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

·         Prices for U.S. imports recorded no change in July after edging down 0.1% in June. Higher fuel prices were offset by falling nonfuel prices. U.S. export prices decreased 0.5% in July following a 0.2% increase in June. The July decline was driven by a drop in agricultural export prices.

·         In July, retail sales increased 0.5% from June, and are up 6.4% over July 2017. For July, several businesses saw sales enjoy noteworthy increases, including food and beverage stores (0.6%); motor vehicle and parts dealers (1.1%); furniture and home furnishing stores (2.1%); electronics and appliance stores (1.8%); and building material and garden equipment (1.8%). Gasoline stations sales climbed 1.8% for the month and are up 22.2% over the year. Internet sales increased 1.2% in July and are up 8.7% since last July.

·         According to the Federal Reserve, industrial production edged up 0.1% in July after rising at an average pace of 0.5% over the previous five months. Manufacturing production increased 0.3%, the output of utilities moved down 0.5%, and, after posting five consecutive months of growth, the index for mining declined 0.3%. Overall, total industrial production was 4.2% higher in July than it was a year earlier.

·         The number of building permits and housing starts increased in July, while housing completions lagged. According to the Census Bureau, building permits rose 1.5% above their June rate and are 4.2% greater than the July 2017 rate. Housing starts also expanded by 0.9% for the month. However, starts are still 1.4% below their rate last July. New home inventory won’t get much of a boost as housing completions fell 1.7% from June. Completions are 0.8% below their July 2017 pace.

·         In the week ended August 11, there were 212,000 initial claims for unemployment insurance, a decrease of 2,000 from the previous week’s level, which was revised up by 1,000. The advance rate for insured unemployment claims remained at 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended August 4 was 1,721,000, a decrease of 39,000 from the prior week’s level, which was revised up by 5,000.

Eye on the Week Ahead

The latest information on the housing sector is available this week with reports on sales of existing and new homes in July. Housing prices have been rising and inventory is advancing at a snail’s pace making for a very slow-moving housing market.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

IMPORTANT DISCLOSURES

Content has been provided by Broadridge Investor Communication Solutions, Inc.  Broadridge does not provide Investment, tax or legal advice.  The information presented here is not specific to any individual’s personal circumstances.

This publication is provided as a service to clients and associates of PFA solely for their own use and information.  The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified.  The content in this publication is for general information and education purposes only and not intended to serve as individual investment advice.  You should seek independent advice from a professional based on your individual circumstances.  The information in these materials may change at any time without notice.  To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

This communication is strictly intended for individuals residing in the state(s) of CA, FL, IL, MO and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018.

Market Week: August 13, 2018

The Markets (as of market close August 10, 2018)

Despite the continued strength shown in corporate earnings reports, investors reeled in their enthusiasm last week, sending the large caps of both the S&P 500 and the Dow plummeting. Ongoing tensions between China, Russia, and now Turkey seem to have dampened investors’ confidence. Following new sanctions levied against Russia by the United States, Russian Prime Minister Medvedev threatened that Russia will consider U.S. sanctions a declaration of economic war. Meanwhile, U.S. threats against Turkey for refusing to release an American pastor added to Turkey’s economic crisis as the lira fell 14% against the dollar. And China has warned of a protracted trade war if the United States continues to add tariffs on Chinese goods.

All of which has affected the benchmark indexes listed here. In addition to the faltering Dow and S&P 500, the Global Dow fell almost 1.0% for the week and is down 1.28% compared to its year-end value. The tech-heavy Nasdaq held its own, while the small caps of the Russell 2000 climbed 0.80% and are ahead of last year’s closing value by almost 10%.

The price of crude oil (WTI) fell again last week, closing at $67.78 per barrel, down from the prior week’s closing price of $68.68 per barrel. The price of gold (COMEX) also dropped last week, closing at $1,219.30 by early Friday evening, down from the prior week’s price of $1,221.90. The national average retail regular gasoline price climbed to $2.852 per gallon on August 6, 2018, $0.006 higher than the prior week’s price and $0.474 more than a year ago.

Market/Index 2017 Close Prior Week As of 8/10 Weekly Change YTD Change
DJIA 24719.22 25462.58 25313.14 -0.59% 2.40%
Nasdaq 6903.39 7812.01 7839.11 0.35% 13.55%
S&P 500 2673.61 2840.35 2833.28 -0.25% 5.97%
Russell 2000 1535.51 1673.37 1686.80 0.80% 9.85%
Global Dow 3085.41 3074.54 3046.05 -0.93% -1.28%
Fed. Funds target rate 1.25%-1.50% 1.75%-2.00% 1.75%-2.00% 0 bps 50 bps
10-year Treasuries 2.41% 2.94% 2.87% -7 bps 46 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

·         Driven by rising housing and vehicle prices, the Consumer Price Index rose 0.2% in July following a 0.1% increase in June. Housing prices rose 0.3%, accounting for nearly 60% of the CPI monthly increase. Transportation also increased 0.3% for the month and 7.3% over the last 12 months. From last July, the CPI has risen 2.9%. The index less food and energy also expanded by 0.2% in July — the same as in May and June. The index less food and energy rose 2.4% for the 12 months ended July; this was the largest 12-month increase since the period ended September 2008.

·         Prices at the producer level were unchanged in July after advancing 0.3% in June. Over the 12 months ended in July, producer prices have increased 3.3%. Producer prices for goods increased 0.1% in July, which was offset by a 0.1% decrease in prices for services. Prices less foods, energy, and trade services moved up 0.3% in July, the same as in June. For the 12 months ended in July, prices less foods, energy, and trade services climbed 2.8%.

·         The 2018 federal budget deficit continues to expand, outpacing last year’s deficit. The July deficit was $76.9 billion — about $2 billion ahead of June’s deficit. For the year, the deficit sits at about $684 billion, or more than 17% ahead of the budget deficit over the same period last year.

·         According to the Job Openings and Labor Turnover Summary, the total number of job openings ticked up to 6.7 million at the end of June — little changed from May’s total. Some sectors that saw an increase in job openings include education and health services, construction, manufacturing, wholesale and retail trade, finance and insurance, real estate and rental and leasing, and leisure and hospitality. Job openings fell in transportation, warehousing, utilities, and information. The total number of hires fell by less than 100,000 in June, while total separations increased by less than 100,000. Over the 12 months ended in June, hires totaled 66.6 million and separations totaled 64.1 million, yielding a net employment gain of 2.5 million.

·         In the week ended August 4, there were 213,000 initial claims for unemployment insurance, a decrease of 6,000 from the previous week’s level, which was revised up by 1,000. The advance rate for insured unemployment claims remained at 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended July 28 was 1,755,000, an increase of 29,000 from the prior week’s level, which was revised up by 2,000.

Eye on the Week Ahead

This week investors will continue to focus on world events as they impact the U.S. economy. The July report on import and export prices may show the impact of the ongoing trade wars.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

IMPORTANT DISCLOSURES

Content has been provided by Broadridge Investor Communication Solutions, Inc.  Broadridge does not provide Investment, tax or legal advice.  The information presented here is not specific to any individual’s personal circumstances.

This publication is provided as a service to clients and associates of PFA solely for their own use and information.  The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified.  The content in this publication is for general information and education purposes only and not intended to serve as individual investment advice.  You should seek independent advice from a professional based on your individual circumstances.  The information in these materials may change at any time without notice.  To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

This communication is strictly intended for individuals residing in the state(s) of CA, FL, IL, MO and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018.

Market Week: August 6, 2018

 

The Markets (as of market close August 3, 2018)

Tech and mid-cap stocks performed best last week following strong second-quarter corporate earnings reports. Led by the Nasdaq, each of the benchmark indexes listed here posted gains last week, except for the Global Dow. The S&P 500 enjoyed solid returns and is over 6.0% ahead of its 2017 year-end value. The Dow, which tracks 30 large-cap stocks, ticked up slightly. The small caps of the Russell 2000 bumped over 0.50% higher and are almost 9.0% above last year’s close.

The price of crude oil (WTI) fell again last week, closing at $68.68 per barrel, down from the prior week’s closing price of $69.00 per barrel. The price of gold (COMEX) lost value last week, closing at $1,221.90 by early Friday evening, off from the prior week’s price of $1,232.60. The national average retail regular gasoline price climbed to $2.846 per gallon on July 30, 2018, $0.015 higher than the prior week’s price and $0.494 more than a year ago.

Market/Index 2017 Close Prior Week As of 8/3 Weekly Change YTD Change
DJIA 24719.22 25451.06 25462.58 0.05% 3.01%
Nasdaq 6903.39 7737.42 7812.01 0.96% 13.16%
S&P 500 2673.61 2818.82 2840.35 0.76% 6.24%
Russell 2000 1535.51 1663.34 1673.37 0.60% 8.98%
Global Dow 3085.41 3085.75 3074.54 -0.36% -0.35%
Fed. Funds target rate 1.25%-1.50% 1.75%-2.00% 1.75%-2.00% 0 bps 50 bps
10-year Treasuries 2.41% 2.95% 2.94% -1 bps 53 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

·         The Federal Open Market Committee decided to maintain the federal funds rate at its current 1.75%-2.00% range. The Committee noted that the labor market has continued to strengthen, economic activity has been rising at a strong rate, and household spending and business fixed investment have grown. Inflation has remained near the Committee’s target of 2.0%. However, the FOMC expects further gradual increases in the target range for the federal funds rate, presuming continued economic expansion and rising inflation.

·         The labor market saw 157,000 new jobs added in July, while the unemployment rate edged down 0.1 percentage point to 3.9%. The number of unemployed persons declined by 284,000 to 6.3 million in July. In July, job gains occurred in professional and business services, in manufacturing, and health care and social assistance. The average workweek decreased by 0.1 hour to 34.5 hours in July, following an increase of 0.1 hour in June. Average hourly earnings for all employees rose by $0.07 to $27.05. Over the year, average hourly earnings have increased by $0.71, or 2.7%.

·         Consumer income surged in June, according to the latest report from the Bureau of Economic Analysis. Personal income (pre-tax) and disposable (after-tax) income increased by 0.4%, respectively. Consumer spending, as measured by personal consumption expenditures, also grew by 0.4%. On the other hand, prices for consumer goods and services edged up by only 0.1%. Core prices (excluding food and energy) also advanced a scant 0.1%. Over the last 12 months, prices have increased 2.2% (1.9% increase for core prices). Personal savings, as a percentage of disposable personal income, increased 2.6% for the month and 6.8% over the last 12 months.

·         The goods and services international trade deficit was $46.3 billion in June, up $3.2 billion from $43.2 billion in May. Exports fell 0.7%, while imports increased 0.6% in June. Year-to-date, the goods and services deficit increased $19.6 billion, or 7.2%, from the same period in 2017. Possibly reflecting the impact of the ongoing tariffs and trade wars, the trade deficit between the United States and China increased to $32.5 billion in June, and has expanded by 8.6% year-to-date.

·         According to IHS Markit®, the purchasing managers’ index fell to a five-month low in July. While respondents were generally positive in their evaluation of the manufacturing sector, new orders exceeded output. Orders were largely driven by domestic demand, as exports were generally flat.

·         The Institute for Supply Management® Report On Business® also had a drop in the July purchasing managers index. New orders, production, and prices each fell compared to June, while employment and inventories gained ground.

·         The sales and services (non-manufacturing) sector saw business activity scale back in July. New orders also slowed during the month. On the other hand, employment and prices increased by margins over their June totals.

·         In the week ended July 28, there were 218,000 initial claims for unemployment insurance, an increase of 1,000 from the previous week’s level. The advance rate for insured unemployment claims remained at 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended July 21 was 1,724,000, a decrease of 23,000 from the prior week’s level, which was revised up by 2,000.

Eye on the Week Ahead

With interest rates remaining unchanged for now, this week focuses on the latest information on consumer prices. The Producer Price Index, which measures the change in prices received by sellers of goods and services, has risen 3.4% over the last 12 months ended in June. July’s Consumer Price Index, also out this week, is up 2.9% over the past year. Both indexes are expected to show moderate price increases in July.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

IMPORTANT DISCLOSURES

Content has been provided by Broadridge Investor Communication Solutions, Inc.  Broadridge does not provide Investment, tax or legal advice.  The information presented here is not specific to any individual’s personal circumstances.

This publication is provided as a service to clients and associates of PFA solely for their own use and information.  The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified.  The content in this publication is for general information and education purposes only and not intended to serve as individual investment advice.  You should seek independent advice from a professional based on your individual circumstances.  The information in these materials may change at any time without notice.  To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

This communication is strictly intended for individuals residing in the state(s) of CA, FL, IL, MO and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018.

Market Week: July 30, 2018

The Markets (as of market close July 27, 2018)

Tech stocks and small caps took a hit last week as both the Nasdaq and Russell 2000 lost value. The large caps of both the S&P 500 and the Dow closed in positive territory following a turbulent week of trading. Of note last week was the descent in value taken by a major social media company, which lost over $120 billion in market value. Even with the loss, the company’s value remains one of the highest in the world. Trade tensions between the United States and the European Union were eased somewhat last week as negotiations between the economic giants are ongoing. Conversely, relations between China and the United States remain icy. Long-term Treasury prices fell last week, sending yields higher as reports intimated that more restrictive monetary policies of some major central banks are in the offing.

The price of crude oil (WTI) fell again last week, closing at $69.00 per barrel, down from the prior week’s closing price of $70.31 per barrel. The price of gold (COMEX) advanced slightly last week, closing at $1,232.60 by early Friday evening, up from the prior week’s price of $1,231.30. The national average retail regular gasoline price climbed to $2.831 per gallon on July 23, 2018, $0.034 lower than the prior week’s price but $0.519 higher than a year ago.

Market/Index 2017 Close Prior Week As of 7/27 Weekly Change YTD Change
DJIA 24719.22 25058.12 25451.06 1.57% 2.96%
Nasdaq 6903.39 7820.20 7737.42 -1.06% 12.08%
S&P 500 2673.61 2801.83 2818.82 0.61% 5.43%
Russell 2000 1535.51 1696.81 1663.34 -1.97% 8.32%
Global Dow 3085.41 3037.08 3085.75 1.60% 0.01%
Fed. Funds target rate 1.25%-1.50% 1.75%-2.00% 1.75%-2.00% 0 bps 50 bps
10-year Treasuries 2.41% 2.89% 2.95% 6 bps 54 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

·         The advance estimate for the second-quarter gross domestic product projected economic growth at 4.1%. In the first quarter, the GDP increased 2.2%. Consumer spending (+4.1%) drove much of the estimated growth in the second quarter. Current dollar GDP grew 7.4% (4.3% in the first quarter). The price index for gross domestic purchases expanded 2.3%, compared with an increase of 2.5% in the first quarter. Disposable personal income increased $167.5 billion, or 4.5%, in the second quarter, compared with an increase of $256.7 billion, or 7.0%, in the first quarter. It is important to note that this advanced report is based on source data that is incomplete or subject to further revision, which will be noted in the next two reports in August and September.

·         Sales of existing homes continued to slow in June. Sales declined 0.6% for the month following decreases in both April and May. Existing home sales are now 2.2% below their rate from a year ago. Single-family home sales fell 0.6% and are 2.3% below their sales pace of a year ago. According to the National Association of Realtors®, a severe housing shortage is keeping homes moving off the market at a quick clip while driving prices higher. The median existing-home price for all housing types in June was $276,900, surpassing last month as the new all-time high, and up 5.2% from June 2017 ($263,300). The median existing single-family home price was $279,300 in June, up 5.2% from June 2017. Total housing inventory climbed 4.3% in June and is up 0.5% from a year ago. Unsold inventory is at a 4.3-month supply at current prices.

·         Sales of new single-family homes also dipped in June, falling 5.3% below their May pace. Nevertheless, new home sales are still up 2.4% over their June 2017 estimate. The median sales price of new houses sold in June was $302,100. The average sales price was $363,300. The estimate of new houses for sale at the end of June was 301,000. This represents a supply of 5.7 months at the current sales rate.

·         Orders for long-lasting goods increased 1.0% in June following two consecutive monthly decreases. Transportation drove much of the gain last month. Excluding transportation, durable goods orders rose a moderate 0.4%. Shipments of durable goods escalated 1.7% in June as did unfilled orders, which increased 0.4%. Inventories fell for the second consecutive month, dropping 0.1%.

·         The goods trade deficit was $68.3 billion in June, up $3.6 billion, or 5.5%, from May. Exports dropped $2.2 billion for the month, while imports increased $1.3 billion.

·         In the week ended July 21, there were 217,000 initial claims for unemployment insurance, an increase of 9,000 from the previous week’s level, which was revised up 1,000. The advance rate for insured unemployment claims remained at 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended July 14 was 1,745,000, a decrease of 8,000 from the prior week’s level, which was revised up by 2,000.

Eye on the Week Ahead

The last few days of July into August is a period that includes several important economic events. The Federal Open Market Committee (FOMC) meets for the first time since the second week of June when the Committee voted to increased interest rates by 25 basis points. Will the FOMC be influenced by President Trump’s appeal to refrain from another rate hike this summer? Employment figures for July are also available next week. There were 213,000 new jobs added in June; wages, meanwhile, increased by an average of only 0.2% for the month, but are up 2.7% over the past 12 months.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

IMPORTANT DISCLOSURES

Content has been provided by Broadridge Investor Communication Solutions, Inc.  Broadridge does not provide Investment, tax or legal advice.  The information presented here is not specific to any individual’s personal circumstances.

This publication is provided as a service to clients and associates of PFA solely for their own use and information.  The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified.  The content in this publication is for general information and education purposes only and not intended to serve as individual investment advice.  You should seek independent advice from a professional based on your individual circumstances.  The information in these materials may change at any time without notice.  To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

This communication is strictly intended for individuals residing in the state(s) of CA, FL, IL, MO and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Market Week: July 23, 2018

 

The Markets (as of market close July 20, 2018)

Last week stocks held their own for the most part, with the Dow and S&P 500 posting marginal gains. The tech-heavy Nasdaq fell slightly, while the small caps of the Russell 2000 gained better than half a percent and the Global Dow jumped ahead about a quarter of a percent. Both the dollar and government bond prices reacted to President Trump’s criticism of the Fed for raising interest rates, while claiming the European Union and China were “manipulating their currencies and interest rates lower.” The dollar fell nearly 7.0% and the yield on 10-year Treasuries increased 6 basis points as bond prices fell.

The price of crude oil (WTI) dipped again last week, closing at $70.31 per barrel, down from the prior week’s closing price of $70.62 per barrel. The price of gold (COMEX) continued to fall last week, closing at $1,231.30 by early Friday evening, down from the prior week’s price of $1,241.30. The national average retail regular gasoline price climbed to $2.865 per gallon on July 16, 2018, $0.008 higher than the prior week’s price and $0.587 higher than a year ago.

Market/Index 2017 Close Prior Week As of 7/20 Weekly Change YTD Change
DJIA 24719.22 25019.41 25058.12 0.15% 1.37%
Nasdaq 6903.39 7825.98 7820.20 -0.07% 13.28%
S&P 500 2673.61 2801.31 2801.83 0.02% 4.80%
Russell 2000 1535.51 1687.08 1696.81 0.58% 10.50%
Global Dow 3085.41 3029.17 3037.08 0.26% -1.57%
Fed. Funds target rate 1.25%-1.50% 1.75%-2.00% 1.75%-2.00% 0 bps 50 bps
10-year Treasuries 2.41% 2.83% 2.89% 6 bps 48 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

·         Consumers spent more at the retail level last month. Retail and food services sales in June increased 0.5% over May’s totals, and are up 6.6% over June 2017. Sales at the retail level are up 0.3% for the month and 6.4% above last year. Gasoline station sales are up a noteworthy 21.6% from June 2017. Online retail sales have increased 10.2% from last year. Retail sales less auto and gas are up 0.3%. Motor vehicle and parts dealer sales jumped 0.9% for the month and 4.6% from last June. Restaurants and bars saw sales increase 1.5% in June and 8.0% over last year.

·         New home construction slowed in June, according to the latest report from the Census Bureau. Building permits (-2.2%) and housing starts (-12.3%) fell to their lowest rates since last September. Housing completions were essentially unchanged in June.

·         According to the Federal Reserve, industrial production rose 0.6% in June after declining 0.5% in May. For the second quarter as a whole, industrial production advanced at an annual rate of 6.0%, its third consecutive quarterly increase. Manufacturing output moved up 0.8% in June. Factory output increased 0.3% in June, while mining (1.2%) and utilities (1.5%) also expanded.

·         In the week ended July 14, there were 207,000 initial claims for unemployment insurance, a decrease of 8,000 from the previous week’s level, which was revised up 1,000. This is the lowest level for initial claims since December 6, 1969, when it was 202,000. The advance rate for insured unemployment claims remained at 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended July 7 was 1,751,000, an increase of 8,000 from the prior week’s level, which was revised up by 4,000.

Eye on the Week Ahead

Several important economic indicators are released this week, including June reports on new and existing home sales. The latest figures on international trade in goods may be impacted by the ongoing trade wars. Durable goods orders also could be influenced by increased tariffs on both imports and exports. Finally, the latest report on gross domestic product for the second quarter is released at the end of the week.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

IMPORTANT DISCLOSURES

Content has been provided by Broadridge Investor Communication Solutions, Inc.  Broadridge does not provide Investment, tax or legal advice.  The information presented here is not specific to any individual’s personal circumstances.

This publication is provided as a service to clients and associates of PFA solely for their own use and information.  The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified.  The content in this publication is for general information and education purposes only and not intended to serve as individual investment advice.  You should seek independent advice from a professional based on your individual circumstances.  The information in these materials may change at any time without notice.  To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

This communication is strictly intended for individuals residing in the state(s) of CA, FL, IL, MO and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018.

Market Week: July 16, 2018

 

The Markets (as of market close July 13, 2018)

Stocks posted gains for the second week in a row following some good corporate earnings reports. Each of the indexes listed here improved, except for the small caps of the Russell 2000, which dipped less than a half a point. Year-to-date, only the Global Dow remains behind its 2017 closing value. For the week, the Dow climbed a solid 2.30%, followed by the Nasdaq, the S&P 500, and the Global Dow.

The price of crude oil (WTI) dipped again last week, closing at $70.62 per barrel, down from the prior week’s closing price of $73.92 per barrel. The price of gold (COMEX) fell to $1,241.30 by early Friday evening, down from the prior week’s price of $1,255.90. The national average retail regular gasoline price climbed to $2.857 per gallon on July 9, 2018, $0.013 higher than the prior week’s price and $0.560 higher than a year ago.

Market/Index 2017 Close Prior Week As of 7/13 Weekly Change YTD Change
DJIA 24719.22 24456.48 25019.41 2.30% 1.21%
Nasdaq 6903.39 7688.39 7825.98 1.79% 13.36%
S&P 500 2673.61 2759.82 2801.31 1.50% 4.78%
Russell 2000 1535.51 1694.05 1687.08 -0.41% 9.87%
Global Dow 3085.41 3007.63 3029.17 0.72% -1.82%
Fed. Funds target rate 1.25%-1.50% 1.75%-2.00% 1.75%-2.00% 0 bps 50 bps
10-year Treasuries 2.41% 2.82% 2.83% 1 bps 42 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

·         Consumer prices increased a scant 0.1% in June following a 0.2% bump in May. Over the last 12 months, consumer prices have risen 2.9%. Prices less food and energy rose 0.2% for the month and are up 2.3% for the 12 months ended in June. For the month, fuel oil rose 2.9%, while gasoline increased 0.5%. Medical care services (0.5%), used motor vehicles (0.7%), and new automobiles (0.4%) expanded in June.

·         Producer prices rose 0.3% in June after climbing 0.5% in May. Prices have risen 3.4% for the 12 months ended in June — the largest 12-month increase since November 2011. Prices less foods, energy, and trade services moved up 0.3% in June after rising 0.1% in May. For the 12 months ended in June, prices less foods, energy, and trade services increased 2.7%. Prices for services rose 0.4% while goods increased 0.1%. The jump in services prices is attributable to a 21.8% jump in fuels and lubricants.

·         The federal budget deficit for June was $74.9 billion, down from May’s deficit of $146.8 billion. For the fiscal year, the deficit sits at $607.1 billion. Over the same period last year, the deficit was $523.1 billion. Of note, individual income taxes net receipts sit at $1,305.5 billion this year, compared to $1,199.2 billion over the same period last year; corporate income taxes net receipts are $161.7 billion this year versus $223.3 billion in 2017.

·         The number of job openings edged down to 6.6 million on the last business day of May, the U.S. Bureau of Labor Statistics reported. The number of job openings in April was 6.8 million. Job openings increased in federal government (+12,000) and mining and logging (+10,000), but decreased in information (-60,000) and arts, entertainment, and recreation (-27,000). The number of hires increased in May (5.8 million) over April (5.6 million), while total separations were essentially unchanged at 5.5 million. The quits rate increased to 2.4% as people are leaving their current jobs in search of better jobs and/or higher wages.

·         U.S. import prices decreased 0.4% in June following a 0.9% advance in May. The June decline was the largest monthly drop since the index decreased 0.5% in February 2016. Despite the downturn in June, overall import prices advanced 4.3% between June 2017 and June 2018. Prices for U.S. exports rose 0.3% in June, after rising 0.6% the previous month. Prices for overall exports advanced 5.3% over the past 12 months, the largest over-the-year increase since the index rose 6.3% in October 2011.

·         In the week ended July 7, there were 214,000 initial claims for unemployment insurance, a decrease of 18,000 from the previous week’s level, which was revised up 1,000. The advance insured unemployment rate remained at 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended June 30 was 1,739,000, a decrease of 3,000 from the prior week’s level, which was revised up by 3,000.

Eye on the Week Ahead

This week’s retail sales report for June is another indicator of consumer spending. What effect, if any, will the trade wars have on prices for consumer goods and services? Price changes can impact retail sales, particularly food and energy sales.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

IMPORTANT DISCLOSURES

Content has been provided by Broadridge Investor Communication Solutions, Inc.  Broadridge does not provide Investment, tax or legal advice.  The information presented here is not specific to any individual’s personal circumstances.

This publication is provided as a service to clients and associates of PFA solely for their own use and information.  The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified.  The content in this publication is for general information and education purposes only and not intended to serve as individual investment advice.  You should seek independent advice from a professional based on your individual circumstances.  The information in these materials may change at any time without notice.  To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

This communication is strictly intended for individuals residing in the state(s) of CA, FL, IL, MO and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018.

Market Week: July 9, 2018

 

The Markets (as of market close July 6, 2018)

A positive labor report may have been enough to offset investor concerns about the tit-for-tat tariff war between the United States and its trade partners as stocks posted positive returns by last week’s end. Trading volumes were relatively light, as expected, during the holiday-shortened week. As has been the case for much of the year, the tech-heavy Nasdaq and the small caps of the Russell 2000 enjoyed the largest weekly gains, followed by the large caps of the S&P 500, the Global Dow, and the Dow.

The price of crude oil (WTI) dipped last week, closing at $73.92 per barrel, down from the prior week’s closing price of $74.25 per barrel. The price of gold (COMEX) rose slightly to $1,255.90 by early Friday evening, ahead of the prior week’s price of $1,254.20. The national average retail regular gasoline price climbed to $2.844 per gallon on July 2, 2018, $0.011 higher than the prior week’s price and $0.584 higher than a year ago.

Market/Index 2017 Close Prior Week As of 7/6 Weekly Change YTD Change
DJIA 24719.22 24271.41 24456.48 0.76% -1.06%
Nasdaq 6903.39 7510.30 7688.39 2.37% 11.37%
S&P 500 2673.61 2718.37 2759.82 1.52% 3.22%
Russell 2000 1535.51 1643.07 1694.05 3.10% 10.32%
Global Dow 3085.41 2979.52 3007.63 0.94% -2.52%
Fed. Funds target rate 1.25%-1.50% 1.75%-2.00% 1.75%-2.00% 0 bps 50 bps
10-year Treasuries 2.41% 2.86% 2.82% -4 bps 41 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

·         Employment increased by 213,000 in June, while the unemployment rate rose 0.2 percentage point to 4.0%, as more people were looking to enter the job market. Labor growth occurred in professional and business services, manufacturing, and health care, while retail trade lost jobs. The number of unemployed persons increased by 499,000 to 6.6 million. Still, a year earlier, the jobless rate was 4.3%, and the number of unemployed persons was 7.0 million. The average workweek for all employees was unchanged at 34.5 hours in June. Average hourly earnings for all employees rose by $0.05 to $26.98. Over the year, average hourly earnings have increased by $0.72, or 2.7%.

·         The final figures for May are in and the trade deficit for goods and services was $43.1 billion, down $3.0 billion from April’s deficit. Imports increased marginally (0.4%), while exports expanded by 1.9% over April. Year-to-date, the goods and services deficit increased $17.9 billion, or 7.9%, from the same period in 2017. Exports increased $84.5 billion, or 8.8%. Imports increased $102.4 billion, or 8.6%. This report does not reflect the impact, if any, of the trade tariffs imposed in June and July between the United States and many of its trade partners.

·         Depending on which survey you read, economic activity in the manufacturing sector may have expanded in June. According to the survey from the Institute for Supply Management®, overall manufacturing increased over May. While new orders, employment, and prices fell slightly, production, inventories, and supplier deliveries increased over their May figures.

·         On the other hand, the IHS Markit final U.S. Manufacturing Purchasing Managers’ Index™ for June showed the overall rate of growth in the manufacturing sector dipped to its lowest rate in four months. According to survey respondents, the effects of tariffs were widely cited as contributing to another sharp rise in input prices. New orders fell, with new business from abroad contracting for the first time since July 2017.

·         According to the latest Non-Manufacturing ISM® Report On Business®, economic activity advanced in the non-manufacturing (services) sector in June over May. Business activity and new orders increased, while employment and prices decreased. According to the report, 17 non-manufacturing industries reported growth for the month.

·         In the week ended June 30, there were 231,000 initial claims for unemployment insurance, an increase of 3,000 from the previous week’s level, which was revised up 1,000. The advance insured unemployment rate remained at 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended June 23 was 1,739,000, an increase of 32,000 from the prior week’s level, which was revised up by 2,000.

Eye on the Week Ahead

The latest information on inflationary trends is available next week. June reports on both consumer and producer prices are expected to show continuing upward movement, which could provide the Fed with the impetus to raise interest rates in August.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

IMPORTANT DISCLOSURES

Content has been provided by Broadridge Investor Communication Solutions, Inc.  Broadridge does not provide Investment, tax or legal advice.  The information presented here is not specific to any individual’s personal circumstances.

This publication is provided as a service to clients and associates of PFA solely for their own use and information.  The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified.  The content in this publication is for general information and education purposes only and not intended to serve as individual investment advice.  You should seek independent advice from a professional based on your individual circumstances.  The information in these materials may change at any time without notice.  To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

This communication is strictly intended for individuals residing in the state(s) of CA, FL, IL, MO and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018.

Market Week: July 2, 2018

 

The Markets (as of market close June 29, 2018)

The benchmark indexes listed here continued to trend downward, losing value for the second week in a row. The Russell 2000 and the Nasdaq, both of which had been the leading performers for much of the year, suffered the biggest weekly losses, followed by the S&P 500, the Dow, and the Global Dow. While energy shares performed well on the heels of oil prices reaching a four-year high, overall fears of worsening trade relations between the United States and several of its trade partners pulled investors away from stocks.

The price of crude oil (WTI) surged last week, closing at $74.25 per barrel, up from the prior week’s closing price of $69.32 per barrel. The price of gold (COMEX) fell to $1,254.20 by early Friday evening, down from the prior week’s price of $1,271.70. The national average retail regular gasoline price fell to $2.833 per gallon on June 25, 2018, $0.046 lower than the prior week’s price but $0.545 higher than a year ago.

Market/Index 2017 Close Prior Week As of 6/29 Weekly Change YTD Change
DJIA 24719.22 24580.89 24271.41 -1.26% -1.81%
Nasdaq 6903.39 7692.82 7510.30 -2.37% 8.79%
S&P 500 2673.61 2754.88 2718.37 -1.33% 1.67%
Russell 2000 1535.51 1685.58 1643.07 -2.52% 7.00%
Global Dow 3085.41 3007.73 2979.52 -0.94% -3.43%
Fed. Funds target rate 1.25%-1.50% 1.75%-2.00% 1.75%-2.00% 0 bps 50 bps
10-year Treasuries 2.41% 2.89% 2.86% -3 bps 45 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

·         The third and final estimate of the first-quarter gross domestic product showed the economy expanded at a rate of 2.0%. Fourth-quarter growth was 2.9%. Gross domestic income (the net sum of income earned in the production of GDP) increased 3.6% in the first quarter, compared with a 1.0% bump in the fourth quarter. In the first quarter, consumer spending grew at the relatively low rate of 0.9%, while business spending rose 7.5%.

·         Both pre-tax and after-tax consumer income increased by 0.4% in May. Overall, consumer spending climbed 0.2% in the month, while core expenditures (excluding food and energy) also accelerated at 0.2%. Prices for consumer goods and services, overall and excluding food and energy, also increased 0.2%. Of note, consumer prices are up 2.3%, and core prices, an inflation indicator of importance to the Federal Open Market Committee, is up 2.0% over the past 12 months — right at the target inflation rate set by the Committee. Look for more interest rate increases intended to keep the reins on inflation.

·         New home sales soared in May, up 6.7% over April’s figures and 14.1% ahead of the May 2017 estimate. Weakening sales prices may have helped boost sales in May. The median sales price of new houses sold in May 2018 was $313,000 ($318,500 in April). The average sales price was $368,500 ($394,600 in April). The seasonally adjusted estimate of new houses for sale at the end of May was 299,000. This represents a supply of 5.2 months at the current sales rate.

·         New orders for durable goods fell 0.6% in May following a 1.0% drop in April. Excluding transportation, new orders decreased 0.3%. Shipments were down 0.1% after increasing nine consecutive months. Unfilled orders rose 0.5% in May after advancing 0.6% in April. Lastly, inventories increased 0.3% — the same increase as in April.

·         Despite tariffs and trade wars, exports surged 2.1% in May, pulling down the trade deficit from $67.3 billion in April to $64.8 billion in May. Imports of goods for May were $208.4 billion, $0.4 billion (or 0.2%) more than April imports.

·         In the week ended June 23, there were 227,000 initial claims for unemployment insurance, an increase of 9,000 from the previous week’s level. The advance insured unemployment rate remained at 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended June 16 was 1,705,000, a decrease of 21,000 from the prior week’s level, which was revised up by 3,000.

Eye on the Week Ahead

Trading is usually subdued during the holiday-shortened week. Nevertheless, the following week could start off with a bang based on Friday’s employment data for June.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

IMPORTANT DISCLOSURES

Content has been provided by Broadridge Investor Communication Solutions, Inc.  Broadridge does not provide Investment, tax or legal advice.  The information presented here is not specific to any individual’s personal circumstances.

This publication is provided as a service to clients and associates of PFA solely for their own use and information.  The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified.  The content in this publication is for general information and education purposes only and not intended to serve as individual investment advice.  You should seek independent advice from a professional based on your individual circumstances.  The information in these materials may change at any time without notice.  To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

This communication is strictly intended for individuals residing in the state(s) of CA, FL, IL, MO and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018.

MARKET WEEK: JUNE 25, 2018

The Markets (as of market close June 22, 2018)

The benchmark indexes listed here closed flat to lower last week amid fears that trade penalties will hurt domestic companies’ exports. Only the Russell 2000 closed the week ahead of its prior week’s value. The Dow was hit particularly hard as investors fled stocks of companies that could suffer due to the impending trade wars. President Trump may be targeting an additional $200 billion of Chinese imports and European-made automobiles for higher tariffs. A smaller-than-expected increase in production from OPEC sent oil prices up at the end of last week, pushing the price of some energy stocks higher.

The price of crude oil (WTI) surged last week, closing at $69.32 per barrel, up from the prior week’s closing price of $64.38 per barrel. The price of gold (COMEX) fell to $1,271.70 by early Friday evening, down from the prior week’s price of $1,282.00. The national average retail regular gasoline price fell to $2.879 per gallon on June 18, 2018, $0.032 lower than the prior week’s price but $0.561 higher than a year ago.

Market/Index 2017 Close Prior Week As of 6/22 Weekly Change YTD Change
DJIA 24719.22 25090.48 24580.89 -2.03% -0.56%
Nasdaq 6903.39 7746.38 7692.82 -0.69% 11.44%
S&P 500 2673.61 2779.66 2754.88 -0.89% 3.04%
Russell 2000 1535.51 1683.91 1685.58 0.10% 9.77%
Global Dow 3085.41 3044.16 3007.73 -1.20% -2.52%
Fed. Funds target rate 1.25%-1.50% 1.75%-2.00% 1.75%-2.00% 0 bps 50 bps
10-year Treasuries 2.41% 2.92% 2.89% -3 bps 48 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

·         The May report on new residential construction was a mixed bag of good and not-so-good news. On the plus side, housing starts (5.0%) and housing completions (1.9%) each expanded over their April totals. That should get more homes on the market, which should increase inventory. On the other hand, building permits were down 4.6% in May from the prior month, which doesn’t necessarily bode well for future construction.

·         Existing home sales, which had been a strong segment of the housing sector earlier in the year, have fallen back for the second consecutive month. May’s sales of existing homes decreased 0.4% from April’s totals, and are now 3.0% lower than a year ago. The median existing-home price for all housing types in May was $264,800, an all-time high and up 4.9% from May 2017 ($252,500). May’s price increase marks the 75th straight month of year-over-year gains. Inventory of existing homes for sale rose 2.8% in May, yielding a 4.1-month supply at the current sales pace. While inventory is expanding somewhat, it’s still well below (6.1%) the number of homes available for sale this time last year.

·         In the week ended June 16, there were 218,000 initial claims for unemployment insurance, a decrease of 3,000 from the previous week’s level, which was revised up by 3,000. The advance insured unemployment rate remained at 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended June 9 was 1,723,000, an increase of 22,000 from the prior week’s level, which was revised up by 4,000.

Eye on the Week Ahead

The last week of June brings with it some notable economic reports, led by the final estimate of the first-quarter gross domestic product. The report on personal income will show whether wage inflation is mirroring consumer price increases.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

IMPORTANT DISCLOSURES

Content has been provided by Broadridge Investor Communication Solutions, Inc.  Broadridge does not provide Investment, tax or legal advice.  The information presented here is not specific to any individual’s personal circumstances.

This publication is provided as a service to clients and associates of PFA solely for their own use and information.  The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified.  The content in this publication is for general information and education purposes only and not intended to serve as individual investment advice.  You should seek independent advice from a professional based on your individual circumstances.  The information in these materials may change at any time without notice.  To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

This communication is strictly intended for individuals residing in the state(s) of CA, FL, IL, MO and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018.

Market Week: June 18, 2018

The Markets (as of market close June 15, 2018)

Market gains achieved earlier in the week were given back by last Friday as investors appeared to react to China’s retaliatory tariffs on American exports. The deteriorating relationship between the United States and China escalated last week as the Trump administration revealed plans to impose tariffs of 25% on a significant number of Chinese imports. In response, China targeted U.S. exports, including cars and crude oil, for similar tariffs. By the end of the week, the Dow fell the most, suffering through its largest one-week loss since March. Other than the Global Dow, the remaining indexes listed here posted gains, with the Nasdaq climbing over 1.30%. The S&P 500 was virtually unchanged, and the Russell 2000 gained over 0.50%.

The price of crude oil (WTI) dipped again last week, closing at $64.38 per barrel, down from the prior week’s closing price of $65.56 per barrel. The price of gold (COMEX) fell to $1,282.00 by early Friday evening, down from the prior week’s price of $1,303.50. The national average retail regular gasoline price fell to $2.911 per gallon on June 11, 2018, $0.029 lower than the prior week’s price but $0.545 higher than a year ago.

Market/Index 2017 Close Prior Week As of 6/15 Weekly Change YTD Change
DJIA 24719.22 25316.53 25090.48 -0.89% 1.50%
Nasdaq 6903.39 7645.51 7746.38 1.32% 12.21%
S&P 500 2673.61 2779.03 2779.66 0.02% 3.97%
Russell 2000 1535.51 1672.49 1683.91 0.68% 9.66%
Global Dow 3085.41 3060.76 3044.16 -0.54% -1.34%
Fed. Funds target rate 1.25%-1.50% 1.50%-1.75% 1.75%-2.00% 25 bps 50 bps
10-year Treasuries 2.41% 2.93% 2.92% -1 bps 51 bps

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

Last Week’s Economic Headlines

·         The Federal Open Market Committee decided to raise the target range for the federal funds rate 25 basis points to 1.75%-2.00%. The Committee noted that the labor market has continued to strengthen and that economic activity has been rising at a solid rate. Growth of household spending has picked up, while business fixed investment has continued to grow strongly. On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2%. With the median funds forecast at 2.4%, the FOMC appears to be targeting two more rate hikes before the end of the year.

·         Consumer prices continued to climb at a slow pace in May, inching up 0.2% following the same increase in April. Over the last 12 months, the Consumer Price Index has risen 2.8%. The CPI less food and energy also rose 0.2% for the month and is up 2.2% over the last 12 months. Some of the categories showing monthly price gains include energy (particularly gas); shelter; education and communication; medical care commodities; new vehicles; tobacco and smoking products; hospital services; and motor vehicle insurance. Airline fares dropped 1.9%. Other price drops occurred in used cars and trucks; household furnishing and operations; and fuel oil.

·         The prices producers receive for goods and services at the wholesale level rose 0.5% in May after climbing 0.1% the prior month. In May, 60% of the price increase is attributable to a 1.0% advance in goods prices, particularly gasoline prices. Prices less food, energy, and trade services increased 0.1% in May over April, and 2.6% from May 2017. The prices for services moved up 0.3%. One-third of the May advance in prices for services is attributable to a 1.5% rise in margins for machinery, equipment, parts, and supplies wholesaling (trade indexes that measure changes in margins received by wholesalers and retailers). On an unadjusted basis, wholesale prices increased 3.1% for the 12 months ended in May, the largest 12-month increase since climbing 3.1% in January 2012.

·         Retail sales jumped 0.8% in May from the previous month, and 5.9% above May 2017. Retail trade sales were up 0.8% from April 2018, and 6.0% above last year. Gasoline stations sales were up 17.7% from May 2017, while nonstore (online) retail sales were up 9.1% from last year.

·         The federal government showed a $146.8 billion deficit in May following a $214.3 billion surplus in April. For comparison, the May 2017 deficit was $88.4 billion. For fiscal 2018, the total government deficit is $532.2 billion. Over the same eight months in 2017, the deficit was $432.9 billion — a difference of about 23%. Of note, for the current fiscal year to date (October through May), individual income taxes are up $94.5 million compared to 2017, while corporate income taxes are down $42.2 million. Compared to fiscal 2017, total government receipts for fiscal 2018 are up 2.6%, while expenditures have increased by 5.9%.

·         Industrial production edged down 0.1% in May after rising 0.9% in April. Manufacturing production fell 0.7% in May. Excluding motor vehicles and parts, factory output moved down 0.2% for the month. Over the past 12 months, industrial production is up 3.5%.

·         Prices for U.S. imports increased 0.6% for the second consecutive month in May, as rising fuel and nonfuel prices contributed to the advances in both months. Import prices have risen 4.3% for the 12 months ended in May 2018 — largely driven by higher fuel prices. Excluding fuel, import prices are up 0.2% for the month and 1.9% for the year. U.S. export prices rose 0.6% for the second consecutive month in May, and are up 4.9% for the year.

·         In the week ended June 9, there were 218,000 initial claims for unemployment insurance, a decrease of 4,000 from the previous week’s level. The advance insured unemployment rate remained at 1.2%. The advance number of those receiving unemployment insurance benefits during the week ended June 2 was 1,697,000, a decrease of 49,000 from the prior week’s level, which was revised up by 5,000. This is the lowest level for insured unemployment since December 1, 1973, when it was 1,692,000.

Eye on the Week Ahead

Performance statistics from the housing sector for May are released this week and next. Housing starts, new building permits, and existing home sales each dropped off in April. Reports this week hope to show a reversal of that trend for May. Next week, figures on new home sales are released for May following April’s lackluster returns.

Data sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market data: Based on data reported in WSJ Market Data Center (indexes); U.S. Treasury (Treasury yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighted index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

IMPORTANT DISCLOSURES

Content has been provided by Broadridge Investor Communication Solutions, Inc.  Broadridge does not provide Investment, tax or legal advice.  The information presented here is not specific to any individual’s personal circumstances.

This publication is provided as a service to clients and associates of PFA solely for their own use and information.  The material is derived from sources believed to be reliable but its accuracy and the opinions based thereon are not guaranteed and have not been verified.  The content in this publication is for general information and education purposes only and not intended to serve as individual investment advice.  You should seek independent advice from a professional based on your individual circumstances.  The information in these materials may change at any time without notice.  To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.  Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

This communication is strictly intended for individuals residing in the state(s) of CA, FL, IL, MO and TX. No offers may be made or accepted from any resident outside the specific states referenced.

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2018.