Last week, the S&P 500, Dow, and NASDAQ closed at all-time record highs.[i] The S&P 500 rose 0.96%, the Dow gained 0.6%, and the NASDAQ grew by 1.54%.[ii] Meanwhile, the MSCI EAFE gained 1.64% for the week.[iii]
Despite strong equity markets, bond yields dropped to their lowest point in the year.[iv] The drop in yield caused by rising bond prices, combined with soft employment numbers and low wage growth, could suggest a slowing economy or a tightening labor market.[v]
While the U.S. equity markets advanced to new highs and bond prices rose, other markets were mixed for the week. Pending home sales dropped 1.3% in April, a second straight month of decline.[vi] Oil fell to $47.66 a barrel, the dollar dropped to a seven-month low against the euro, and gold gained 0.8% closing at $1,280.20.[vii]
Additionally, soft employment numbers and flat wages could lead to a disappointing Q2 Gross Domestic Product (GDP). With an eye on dropping inflation, the Fed will have to decide whether to still raise interest rates.[viii]
Mixed Job Numbers and Slow Wage Growth
May’s job growth reported an anemic 138,000, well below the expected 185,000. At the same time, average hourly wages increased on a year-over-year basis by only 2.5%. Moreover, the revisions to March and April’s payroll numbers fell by 66,000 jobs.[ix] The economy is currently averaging 162,000 new jobs per month for the year—again, well below 2016’s 187,000 average.[x]
Despite the unemployment rate falling to 4.3%, the lowest it’s been in over 15 years, the employment-to-population ratio also fell. Still, the data confirms that demand for experienced and skilled workers exists, while the supply is falling.[xi]
Fed Will Discuss Raising Interest Rates
On June 14, the Fed FOMC will meet to determine if an interest rate increase is in order.[xii] Despite the soft employment numbers and an inflation rate below the Fed’s target of 2%, traders still believe there is a nearly 88% chance that the Fed will raise rates in June.[xiii] However, the market consensus currently suggests only a roughly 50/50 chance for another rate increase before the end of the year.[xiv]
International News and Looking Ahead
Manufacturing in China has posted strong returns. Both the manufacturing and non-manufacturing PMIs reported gains above 50. The numbers suggest that China is on track to reach its targeted 6.5% growth for the year.[xv] This matters because China is the world’s second largest economy at $11 trillion GDP for 2017.[xvi]
Other developments in the international arena could influence markets going forward. Reaction to President Trump’s decision to leave the Paris Climate Accord could adversely affect American products in the international markets. The landmark decision also runs the risk of hurting U.S. tech and alternative energy companies.[xvii]
We will continue to follow developing international and national news as they move the markets. As always, if you have questions about how these events may affect your finances, please contact us. We are here to help you remain informed and in control of your financial future.
Monday: Factory Orders, ISM Non-Manufacturing Index
Tuesday: JOLTS (Job Openings and Labor Turnover Survey)
Thursday: Jobless Claims
|DATA AS OF 6/2/2017||1 WEEK||SINCE 1/1/17||1 YEAR||5 YEAR||10 YEAR|
|STANDARD & POOR’S 500||0.96%||8.94%||15.86%||13.80%||4.73%|
|DATA AS OF 6/2/2017||1 MONTH||6 MONTH||1 YEAR||5 YEAR||10 YEAR|
|TREASURY YIELDS (CMT)||0.82%||1.06%||1.16%||1.71%||2.15%|
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.
Savory Thai Turkey Lettuce Wraps
A fresh take on the classic wrap!
2 medium bell peppers, seeded and chopped
1 TBSP vegetable oil
3 garlic cloves, chopped
1 pound ground turkey
2 TBSP fish sauce
¼ cup fresh cilantro, chopped
¼ cup fresh mint leaves, chopped
3 TBSP lime juice
½ tsp sugar
Sriracha hot sauce, for serving
- Prepare a 12-inch skillet with 1 TBSP vegetable oil on medium-high heat.
- Add bell peppers, and sauté for 3 minutes.
- Add garlic, and cook for 30 seconds.
- Add ground turkey and fish sauce to peppers, and cook for 5 minutes, breaking into crumbles.
- Remove from heat, and add cilantro, mint leaves, lime juice, and sugar.
- Serve turkey and peppers mixture in lettuce cups.
- Garnish with Sriracha hot sauce (optional).
Recipe adapted from Good Housekeeping[i]
Understand How Offer in Compromise Works*
Sometimes taxpayers owe more money in taxes than they can afford to pay to the IRS. When this happens, you have the option to file an Offer in Compromise, which allows you to pay less than you owe. If you opt to pursue this route, here are some specific details about Offer in Compromise you should know
- Affording the full debt amount
If you can afford to pay your full debt, you probably will not qualify for Offer in Compromise. Instead, you should pursue other options, such as setting up a payment plan with the IRS.
- Filing all required tax materials
In order to apply for an Offer in Compromise, you must have filed all necessary tax paperwork with the IRS.
- Making an initial payment toward your debt
The IRS may require you to pay an amount toward your owed taxes when you apply for Offer in Compromise. Any payments will apply toward your debt.
* 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]
Know the Signs of Sleep Apnea
Sleep apnea is a serious health condition that causes interrupted breathing cycles when people are sleeping—and it can lead to a host of problems. Medical ailments such as high blood pressure, diabetes, and heart failure can all result from sleep apnea. To identify if you may be suffering from sleep apnea, check out these common risk factors and symptoms.
Common Risk Factors
Overall, men are more at risk for sleep apnea. Some additional risk factors include if you:
- Are overweight
- Have a large neck that is 17” or greater in men or 16” or greater in women
- Have a deviated septum
- Have large tonsils or a large tongue
You are possibly experiencing the effects of sleep apnea if you do the following:
- Snore loudly
- Wake up choking or gasping
- Stay tired or low on energy during the day
- Get restless sleep
- Experience forgetfulness and mood changes
Tip courtesy of WebMD[iii]