Markets last week were mixed with leading tech stocks falling dramatically as some investors pulled profits.[i] The NASDAQ took the biggest hit, finishing 1.55% down on the week—its worst week of the year.[ii] Meanwhile, the Dow rose 0.31% for the week, notching another record close on Friday.[iii] The S&P 500 fell 0.30%, and the MSCI EAFE closed the week down 1.22%.[iv]
The S&P tech sector dropped 3.3% on Friday; however, it remained up 18% for the year. Major tech stocks account for almost 13% of the total number of stocks in the S&P 500, while comprising nearly 40% of the S&P 500 increase for the year.[v]
Internationally, Asian markets were mixed while European markets closed the week generally higher.[vi] The European equities markets took last week’s UK election in stride, though the pound dropped in response to the Conservatives losing their majority.[vii]
Domestically, monthly job openings exceeded 6 million in April. Hiring, however, has slowed to only 5 million per month, suggesting workers skills may not match job needs. Moreover, the economy continues to show signs of softening.[viii]
Indications of a Softer Economy
- Wholesale and Retail Inventories Down: Revised wholesale inventories shrunk 0.5% in April, the largest contraction in more than 12 months. In addition, retail inventories fell in April as sales weakened.[ix]
- Inflation Slows: As noted last week, consumer prices remain weak. Inflation slowed in April to an annual rate increase of 1.7% year-over-year, down from the 1.9% recorded in March and 2.1% in February. Falling oil prices, excessive auto inventories, and increasing apartment rental inventories will all create headwinds to reaching the Fed’s target rate of 2.0%.[x]
- Factory Orders Down: Factory orders fell 0.2% in April. While motor vehicles rose 0.6% and computers gained 1.6%, durable goods orders fell 0.8%.[xi]
- Oil Prices Drop: Though summer driving season is here, U.S. gasoline demand dropped by nearly a half-million barrels a day. While the need for fuel fell—and despite beliefs that oil would fall by 3.5 million barrels—stockpiles rose by 3.3 million barrels. As a result, oil dropped by 4%, ending the week at $45.86 per barrel.[xii]
What Comes Next
The Fed will hold a meeting this week to determine whether to raise interest rates. Expectations are that the Federal Open Market Committee (FOMC) will raise the fed funds rate 0.25% to 1.25% despite the soft economic news, which the Fed characterized as “transitory.” The FOMC meeting will also address quarterly forecasts for the remainder of the year.[xiii] The markets expect both Japan and Britain’s central banks to also address the issue of interest rates.[xiv]
In addressing the federal debt, the Treasury Secretary assured last week that the U.S. will not default on its debt. Congress must address the debt limit this summer or fall, but markets may react negatively if delays occur.[xv] Meanwhile, Congress continues to wrestle with policy questions around tax reform, an infrastructure program, and healthcare reform. How the government addresses these important initiatives could alter market dynamics in the future.[xvi]
If you have questions on where you stand as these events unfold, do not hesitate to contact us. We are here to support your financial life with clarity and sound perspectives.
Wednesday: Consumer Price Index, Retail Sales, Business Inventories, FOMC Meeting Announcement
Thursday: Industrial Production, Housing Market Index
Friday: Housing Starts, Consumer Sentiment
|DATA AS OF 6/9/2017||1 WEEK||SINCE 1/1/17||1 YEAR||5 YEAR||10 YEAR|
|STANDARD & POOR’S 500||-0.30%||8.62%||14.95%||12.90%||4.90%|
|DATA AS OF 6/9/2017||1 MONTH||6 MONTHS||1 YEAR||5 YEAR||10 YEAR|
|TREASURY YIELDS (CMT)||0.80%||1.13%||1.20%||1.77%||2.21%
Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5- year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on Morningstar.com and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
No-Churn Black Forest Ripple Ice Cream
Easy, homemade ice cream.
12 ounces cherries, pitted
¼ cup sugar
2 cups heavy cream, very cold
1 can sweetened condensed milk
2 TBSP water
1 tsp pure vanilla extract
4 ounces chocolate chunks, bittersweet
Ice cream cones (optional)
- Combine sugar, cherries, and 2 TBSP of water in a large saucepan.
- Bring mixture to a rolling boil then reduce heat. Simmer until cherries break down and liquid thickens into a syrup, stirring frequently for about 10 – 12 minutes.
- Place cooked cherries in a bowl and cool in refrigerator for roughly 15 minutes.
- Combine condensed milk, cream, and vanilla in a large bowl. Beat with electric mixer for roughly 3 – 4 minutes, until you form stiff peaks.
- Fold the chocolate chunks gently into the milk mixture.
- Grab a 4.5” x 8.5” loaf pan or a 1.5-quart container that can go in the freezer, and add half the cream mixture.
- Spoon half of the cherry syrup on top of the cream mixture.
- Continue adding layers of the cream and cherry mixtures until used.
- Place pan in freezer for at least 4 hours until the ice cream sets.
- Cover frozen ice cream with plastic wrap, and store in freezer for up to 2 weeks.
Recipe adapted from Good Housekeeping[i]
Tax Tips: Access the IRS Resources for Your Tax Help
The IRS has a variety of online tools available to help you streamline and clarify the tax-filing process. From apps to videos and more, you can access a variety of tools for free. Here is a list of helpful resources.
- Use the IRS App: You can find a variety of helpful resources, such as paying your refund, by downloading the official IRS app,
- Ask Tax Questions: Find the answers you need by using Interactive Tax Assistant and the IRS Tax Map.
- Track Refund Status: You can check your refund status by using the tool, “Where’s My Refund?”
- Check Earned Income Credit Eligibility: The IRS tool, EITC Assistant, can help you identify whether you’re eligible to receive earned income credits.
- Pay Account Online: You can pay any money you owe to the IRS by checking out its payment options.
Other details may apply, and you can find more information on the IRS website.
Please Note: This information is not intended to be a substitute for specific individualized tax advice. We suggest you discuss your specific tax issues with a qualified tax advisor.
Tip courtesy of IRS.gov[ii]
Healthy Living: Self-Management Tips for Managing Varicose Veins
Controlling or eliminating varicose veins on your own is not possible. But with some self-care, you can help minimize their intensity and even potentially reduce how many you develop. To do so, start following these self-care tips:
- Start walking: If you don’t already walk regularly for exercise, consider doing so. The movement encourages proper blood circulation in your legs, which can help you manage varicose veins.
- Be mindful of your attire: Shoes with low heels will work your calf muscles more than high heels, which is better for your veins. Opting to not wear tight clothing around your groin, waist, and legs can also help you improve your blood flow.
- Avoid sitting with crossed legs: This position can potentially decrease circulation, a direct factor in varicose veins.
- Add variety to lengthy standing or sitting positions: You can increase your blood flow by changing your position from time to time when sitting or standing for long durations
Tip courtesy of Mayo Clinic[iii]
The information contained in this report is collected from unaffiliated third party sources believed to be reliable, but its accuracy and completeness cannot be guaranteed. The statements you receive directly from the account custodian are the official record of your accounts. You are encouraged to compare and verify the information on this report with the information on the statements you receive from the account custodian. In the event of any discrepancy, the custodian’s valuation shall prevail. Securities offered through Center Street Securities, Inc. (CSS), a registered broker-dealer and member of FINRA & SIPC. Wright Wealth Management Group is a registered investment advisor licensed with the state of Arizona. Wright Wealth Management Group is independent of CSS.