Mixed Markets Continue – Weekly Update for June 19, 2017

Markets remained mixed last week as the Dow closed at another record high, while the NASDAQ fell and the S&P 500 held steady. By Friday, the Dow gained 0.52%, the NASDAQ fell -0.92%, and the S&P 500 gained a slight 0.05%. Meanwhile, the MSCI EAFE remained virtually unchanged from last week, down only -0.002%.

In other markets, oil closed at $44.74 a barrel, down 2.4% on the week—its fourth week of declines. Overall, European equity markets remained steady while most Asian markets recorded modest gains at week’s end.

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%. This was the third interest rate hike by the Fed in the last six months. 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. The Fed currently plans to sell approximately $10 billion monthly starting later this year.

Further, last Wednesday, Federal Reserve Chair Janet Yellen reported on the Fed’s belief that the current weak inflation numbers are temporary. 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.

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.

Retail Sales Soften: Retail sales had their largest monthly drop since January 2016.  Sales declined 0.3% in May against predictions of a 0.1% gain over April. The report includes a variety of disappointing numbers:

  • 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.

CPI Falls: The Consumer Price Index fell 0.13% in May. The disappointing numbers mark another decline—the 2nd in 3 months—as economists had expected a 0.2% increase from April’s number.

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.

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.

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.

ECONOMIC CALENDAR

Wednesday: Existing Home Sales
Thursday: Jobless Claims
Friday: PMI Composite Flash, New Home Sales

June 2017 Market Update Video

The economy has sped up a bit during spring. In this month’s video, Tony takes a tour around Findlay as he talks about some of the major headlines that influenced markets in May. We hope this information offers insight into what these developments might mean for you as an investor.

If you have any questions after watching this video, or would like a second opinion on your portfolio, send us an email, or give us a call at (419) 425-2400. We would be happy to talk. Thanks for watching!

May 2017 Market Update Video

In this month’s video, Josh will talk about some of the major headlines that influenced markets in April and about a few first-quarter reports. We hope this information offers insight into what these developments might mean for you as an investor.

If you have any questions or concerns, or would like another opinion on your portfolio after watching this video, please don’t hesitate to send us an email, or give us a call at (419) 425-2400. We would be happy to talk with you.

February 2017 Market Update Video

 

In this month’s video, Josh will discuss some of the major headlines that influenced markets in January — and provide some insight into what these developments could mean for you as an advisor.

If you have any questions or concerns after watching this video, please get in touch with us. We would love to talk to you. You can give us a call at (419) 425-2400, or send us an email.

Thank you for watching!

December 2016 Market Update Video

In this month’s update, I will discuss the major headlines that influenced the markets in November, and provide insights on what these developments mean for you as an investor.

If you have any questions or concerns, or want to discuss your portfolio, please give us a call at (419) 425-2400, or send us an email. We would love to talk with you.

Special September 2016 Market Update Video

In this video:

  • Tony gives an update on market related news over the last month
  • Discusses investing and politics
  • Discusses the power consumer spending and small businesses have on the overall economy.

Also, stay tuned to the end for a special profile interview with Dr. Greg Arnette, the owner of the local coffee shop We Serve. Coffee, located in downtown Findlay, Ohio.

Thanks for watching!

Hixon Zuercher May 2015 Monthly Video Update

Hixon Zuercher April 2015 Monthly Video Update

Hixon Zuercher March 2015 Monthly Video Update

Hixon Zuercher February 2015 Monthly Video Update