Markets remained mixed last week as the Dow closed at another record high, while the NASDAQ fell and the S&P 500 held steady.[i] By Friday, the Dow gained 0.52%, the NASDAQ fell -0.92%, and the S&P 500 gained a slight 0.05%.[ii] Meanwhile, the MSCI EAFE remained virtually unchanged from last week, down only -0.002%.[iii]
In other markets, oil closed at $44.74 a barrel, down 2.4% on the week—its fourth week of declines.[iv] Overall, European equity markets remained steady while most Asian markets recorded modest gains at week’s end.[v]
The Fed Increases Interest Rates
As expected, the Fed announced last week that it raised the short-term interest rate target by 25 basis points to a range between 1.00 and 1.25%.[vi] This was the third interest rate hike by the Fed in the last six months.[vii] The Fed also announced its intention to reduce the $4.5 trillion balance sheet by selling off assets acquired in the wake of the 2008 financial crisis.[viii] The Fed currently plans to sell approximately $10 billion monthly starting later this year.[ix]
Further, last Wednesday, Federal Reserve Chair Janet Yellen reported on the Fed’s belief that the current weak inflation numbers are temporary.[x] However, the Fed’s plan to continue raising interest rates going forward and sell off its assets may change if the economy does not gain momentum in Q3 and Q4. To date, the economic data continues to point to a Q2 Gross Domestic Product (GDP) that may be weaker than previously anticipated.[xi]
Soft Economic Data Continues
Consumer Sentiment Dampens: The preliminary consumer sentiment index for June dropped to 94.5, the lowest since last November. The index fell from May’s reported 97.1.[xii]
Retail Sales Soften: Retail sales had their largest monthly drop since January 2016.[xiii] Sales declined 0.3% in May against predictions of a 0.1% gain over April. The report includes a variety of disappointing numbers[xiv]:
- 1% decrease for restaurants
- 2% dip for automotive vehicles
- 0% fall for department stores
Business Inventories Drop: In April, business inventories dropped 0.2% from the prior month, which was 0.1% under the consensus. Further, retail inventories also dropped 0.2%, and wholesale inventories abruptly fell 0.5% for the month.[xv]
Housing Weakens: In May, housing starts dropped 5.5% from April and permits fell 4.9%. The trend continues the decline from Q1 and could signal another negative quarter.[xviii]
Market Details on the Horizon
More housing news will influence the week ahead as the existing home sales report comes out on Wednesday and the new home sales report comes out on Friday. Markets will continue to watch the fundamentals, including consumer spending, which makes up 69% of GDP. So far this year, consumer spending has been soft with vehicle sales and restaurant sales sliding downward most months.[xix]
As always, we are here to talk should you have any questions about the markets or your own financial objectives. Our goal is to help you understand your financial life with clarity and confidence.
Wednesday: Existing Home Sales
Thursday: Jobless Claims
Friday: PMI Composite Flash, New Home Sales
|DATA AS OF 6/16/2017||1 WEEK||SINCE 1/1/17||1 YEAR||5 YEAR||10 YEAR|
|STANDARD & POOR’S 500||0.05%||8.67%||17.08%||12.62%||4.73%|
|DATA AS OF 6/16/2017||1 MONTH||6 MONTHS||1 YEAR||5 YEAR||10 YEAR|
|TREASURY YIELDS (CMT)||0.85%||1.13%||1.21%||1.75%||2.16%|
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.
Receipe of the Week: Peanutty Edamame and Noodle Salad
A flavorful stir-fry.
24 ounces shirataki noodles, rinsed and drained
3 cups edamame, shelled
2 cups corn
½ cup peanut butter
½ cup rice vinegar
1 TBSP Sriracha hot sauce, plus an additional amount for serving
2 TBSP water
½ tsp salt
3 cups carrots, shredded
1 pint grape tomatoes, halved
1 medium Granny Smith apple, quartered and sliced thinly
½ cup fresh cilantro, chopped
- Bring a large pot of water to a boil.
- Toss in the shirataki noodles, edamame, and corn. Boil for 2 minutes, and then rinse and drain the noodles.
- Whisk the peanut butter, hot sauce, rice vinegar, water, and salt in a large bowl.
- Add carrots, tomatoes, apple slices, cilantro, and noodle mixture into the bowl.
- Toss the items together until completely combined.
- Serve with the Sriracha hot sauce.
- Delicious when served with shrimp!
Recipe adapted from Good Housekeeping
Tax Tip: Manage Your Tax Liabilities with an Installment Agreement*
When you owe substantial tax funds, an installment agreement can help you settle your debt with the IRS. Here’s some insight into how the agreement works.
How do you enter an Installment Agreement?
You must first file all your required tax returns and supporting documents. From there, you can apply online to enter an installment agreement through the IRS Online Payment Agreement tool.
How do the payments work?
If the IRS approves your installment agreement, you will make a required payment each month until you settle your debt.
Who is eligible?
Individuals and businesses can both enter an Installment Agreement, if approved.
- Individuals: Owe $50,000 or less, including combined taxes, penalties, and interest.
- Businesses: Owe $25,000 or less in the current or previous filing year, including combined taxes, penalties, and interest.
Other details may apply, and you can find more information on the IRS website.
*This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Tip courtesy of IRS.gov
Health Tip: Improve Your Bone Health With These Exercises
As we age, our bone health can decrease and result in osteoporosis. And the condition is widespread: In the United States, 54 million Americans suffer from low bone density or osteoporosis. While encouraging strong bones earlier in life is important for avoiding osteoporosis, you can take steps today to improve your bone health. Here are some helpful exercise tips for you to keep in mind:
- Engage in weight-bearing exercises: When we stand, the force of gravity on our legs and feet encourages our bodies to build more cells, thus strengthening our bones. Of course, consult your doctor to ensure any exercises support your specific health condition.
- Dance more: When you dance, you increase your pulse and remain on your feet. Dancing provides a well-rounded workout and strengthens your heart, muscles, and bones.
- Improve your balance: Falling and shattering bones is a real problem with osteoporosis. You can help avoid this catastrophe by exercising in ways that focus on improving your balance, such as Tai Chi.
Tip courtesy of WebMD23
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.
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia and Southeast Asia.
The 10-year Treasury Note represents
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
Past performance does not guarantee future results.
You cannot invest directly in an index.
Consult your financial professional before making any investment decision.
Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative,
Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.
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