27 Aug 2018

Weekly Economic Update for August 27, 2018

Randy C. Benning, CFP Presents:

BULL MARKET MAKES HISTORY

At the close on August 22, the current bull marked its 3,453th day, a record by S&P Dow Jones standards. Between March 9, 2009 and last Wednesday, the S&P 500 advanced 323%, with an annualized return of about 19%. Besides optimism, four other factors drove the market higher in the last nine-and-a-half years: easing by the Federal Reserve, earnings growth (corporate profits have improved in 30 of the past 35 quarters, with the only slump happening in 2015-16), share repurchases, and dip-buying on the assumption that stocks would recover from declines.1

HOME SALES WEAKEN

New National Association of Realtors data shows existing home sales fell 0.7% during July. Last month, the sales pace was the slowest recorded since February 2016. New home buying declined 1.7% in July after a 2.4% June drop, with the sales rate hitting a 9-month low.2,3

OIL FUTURES JUMP 5% IN FIVE DAYS

Crude just left its 7-week losing streak behind. Oil rose 5.4% on the NYMEX last week, settling at $68.72 after a 1.3% advance during the Friday trading session. News indicating Iran’s output might fall with the imposition of U.S. sanctions helped the commodity.4

S&P 500, NASDAQ SETTLE AT NEW PEAKS

The S&P gained 0.86% last week to finish at 2,874.69, surpassing its record close of January 26. Entering fresh record territory of its own, the Nasdaq Composite pushed toward the 8,000 level, closing at 7,945.98 on Friday after advancing 1.66% across five days. The week was good to the blue chips as well: the Dow Jones Industrial Average added 0.47%, settling Friday at 25,790.35. The CBOE VIX fell 4.67% across the week to 12.05.5,6

T I P O F T H E W E E K

Certain life insurance policies now offer long-term care riders. If premiums for a standalone LTC policy seem too expensive, consider these policies as alternatives.

THIS WEEK

Monday, nothing major is scheduled. | BMO Financial Group and Best Buy present earnings on Tuesday, while the Conference Board’s August consumer confidence index and the latest S&P CoreLogic Case-Shiller home price index also arrive. | The federal government’s second estimate of Q2 economic growth appears Wednesday, as do the NAR’s July pending home sales index and quarterly results from Dick’s Sporting Goods. | Thursday offers July personal spending figures, the July PCE price index, and a new initial unemployment claims report. | On Friday, the University of Michigan releases its final August consumer sentiment index.

Q U O T E O F T H E W E E K

“He who learns but does not think, is lost. He who thinks but does not learn is in great danger.”

KONG QIU (CONFUCIUS)

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	4.33	18.39	14.36	12.65
NASDAQ	15.10	26.70	23.45	23.59
S&P 500	7.52	17.86	14.56	12.69

REAL YIELD	8/24 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.73	0.44	0.69	1.64

Randy C. Benning, CFP®, President, License # 0816882, Benning Financial Group, LLC. Investment Advisory Services offered through Benning Financial Group, LLC, A Registered Investment Advisor, Benning Financial Group, LLC

Sources: wsj.com, bigcharts.com, treasury.gov – 8/24/185,7,8,9

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (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. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

CITATIONS:

1 – businessinsider.com/stock-bull-market-longest-on-record-4-main-reasons-for-longevity-2018-8 [8/22/18]

2 – marketwatch.com/story/housing-is-another-brick-in-the-wall-of-worry-stock-analyst-says-2018-08-24 [8/24/18]

3 – investing.com/economic-calendar/ [8/23/18]

4 – marketwatch.com/story/us-oil-futures-climb-more-than-5-for-the-week-2018-08-24 [8/24/18]
5 – markets.wsj.com/us [8/24/18]
6 – cnbc.com/2018/08/24/us-stocks-china-trade-talks-end-powell-to-speak-at-jackson-hole.html [8/24/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F24%2F17&x=0&y=0 [8/24/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F24%2F17&x=0&y=0 [8/24/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F24%2F17&x=0&y=0 [8/24/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F23%2F13&x=0&y=0 [8/24/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F23%2F13&x=0&y=0 [8/24/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F23%2F13&x=0&y=0 [8/24/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F25%2F08&x=0&y=0 [8/24/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F25%2F08&x=0&y=0 [8/24/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F25%2F08&x=0&y=0 [8/24/18]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/24/18]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/24/18]

20 Aug 2018

Weekly Economic Update for August 20, 2018

by code204 | in Economic Update, News

Randy C. Benning, CFP Presents:

MID-SUMMER MEANT BUYING FOR CONSUMERS

According to new Census Bureau data, retail sales were 0.5% improved in July. Core retail sales (all categories except car and truck buying) rose 0.6% last month. The only sour note was the revision the Bureau made to June’s headline and core retail sales advances. The overall June retail sales gain was reduced to 0.2% from 0.5%; the core gain, to 0.2% from 0.4%.1,2

HOUSEHOLD SENTIMENT GAUGE DISAPPOINTS

In its initial August edition, the University of Michigan’s index of consumer sentiment fell 2.6 points to 95.3. That was a miss: analysts polled by Briefing.com expected a reading of 97.8. This preliminary August reading was also an 11-month low for the index.1,2

A MINOR JULY GAIN FOR HOUSING STARTS

A new federal government report showed residential construction activity up 0.9% last month. Building permits increased 1.5% after three months of retreats.3

DOW LEADS THE WAY ON WALL STREET

Ascending 1.41% over five market days, the Dow Jones Industrial Average closed Friday’s trading session at 25,669.32. The S&P 500 also had a positive week, advancing 0.59% to 2,850.13. The same was not true for the Nasdaq Composite. The tech-heavy benchmark lost 0.29% last week to finish at 7,816.33, Friday. Also notable: gold’s weekly loss of 2.9%. A strong dollar has put pressure on the yellow metal of late, and this past week was gold’s worst on the COMEX in 15 months.2,4

T I P O F T H E W E E K

Many people plan for retirement without giving much thought to life expectancy. What if you live much longer than you think you will? As you near retirement, take this possibility into account.

THIS WEEK

On Monday, Estee Lauder presents second-quarter results. | Tuesday’s earnings roll call includes announcements from Coty, Kohl’s, La-Z-Boy, Medtronic, J.M. Smucker, and Urban Outfitters. | Analog Devices, Lowe’s, Stein Mart, and Target offer earnings on Wednesday; in addition, investors will consider minutes from the most recent Federal Reserve policy meeting and July existing home sales figures. | July new home sales data is out Thursday, plus the latest initial claims report and earnings from Alibaba Group, Gap, Hormel Foods, HP, Intuit, and Toro. | Federal Reserve Chairman Jerome Powell gives a speech on monetary policy Friday morning at the Kansas City Fed’s annual Jackson Hole economic policy symposium; away from Jackson Hole, Foot Locker announces quarterly earnings and data on July hard goods orders arrives.

Q U O T E O F T H E W E E K

“Nature does nothing uselessly.”

ARISTOTLE

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	3.84	18.02	14.04	12.36
NASDAQ	13.22	25.63	23.39	22.34
S&P 500	6.60	17.30	14.43	12.29

REAL YIELD	8/17 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.79	0.42	0.68	1.67

Sources: wsj.com, bigcharts.com, treasury.gov – 8/17/184,5,6,7

CITATIONS:

1 – briefing.com/investor/calendars/economic/2018/08/13-17 [8/17/18]

2 – marketwatch.com/story/weaker-gold-heads-for-3-weekly-drop-2018-08-17 [8/17/18]

3 – reuters.com/article/us-usa-economy-housingstarts/us-housing-starts-rise-less-than-expected-in-july-idUSKBN1L11FI [8/16/18]

4 – markets.wsj.com/us [8/17/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F17%2F17&x=0&y=0 [8/17/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F17%2F17&x=0&y=0 [8/17/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F17%2F17&x=0&y=0 [8/17/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F16%2F13&x=0&y=0 [8/17/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F16%2F13&x=0&y=0 [8/17/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F16%2F13&x=0&y=0 [8/17/18]
5 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F18%2F08&x=0&y=0 [8/17/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F18%2F08&x=0&y=0 [8/17/18]

5 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F18%2F08&x=0&y=0 [8/17/18]
6 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/17/18]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/17/18]

13 Aug 2018

Weekly Economic Update for August 13, 2018

by code204 | in Economic Update, News

Randy C. Benning, CFP Presents:

INFLATION AT 2.9%, CORE INFLATION AT 2.4%

Friday, the Department of Labor reported these annualized gains through July of this year for the Consumer Price Index. Both the headline and core CPIs rose 0.2% last month, matching the consensus forecast of economists polled by Reuters. The yearly core inflation increase is the largest on record since September 2008. (The core inflation reading leaves out food and energy costs.) The Producer Price Index was flat in July, with the yearly advance declining slightly to 3.4%; the core PPI rose 0.3%, resulting in a 2.8% annualized gain.1,2

HOW IS EARNINGS SEASON GOING?

Ninety-one percent of S&P 500 companies have reported Q2 results so far. FactSet, the respected stock market analytics firm, reports that 72% have surprised to the upside in terms of sales and 79% have topped earnings expectations. Weighing actual earnings results and future projections, FactSet estimates a 24.6% “blended” earnings growth rate for the second quarter. On Friday, the forward 12-month P/E ratio for the S&P 500 was 16.6; that compares to an average of 16.2 across the past five years.3

OIL FALLS FOR A SIXTH STRAIGHT WEEK

WTI crude last suffered such a losing streak in 2015. Friday, it settled at $67.63 on the NYMEX, even after a 1.2% advance during Friday’s trading session. Some commodities investors believe that the emerging trade war will reduce demand for energy products.4

NASDAQ ADVANCES, S&P AND DOW RETREAT

The possibility of the U.S. doubling tariffs on Turkish aluminum and steel sent stocks skidding worldwide, Friday, as diplomatic disagreements between the countries took on an economic aspect. Of the three major Wall Street indices, only the Nasdaq Composite posted a weekly gain, rising 0.35% to 7,839.11. The S&P 500 fell 0.25% in five days, settling at 2,833.28 Friday. The Dow Jones Industrial Average ended the week 0.59% lower at 25,313.14.5,6

T I P O F T H E W E E K

This year, the Internal Revenue Service eased the “use it or lose it” rule on Flexible Spending Accounts (FSAs). In the past, funds you directed into an FSA had to be spent by the end of a year or else they would be forfeited. The I.R.S. now permits you to carry over as much as $500 in FSA funds into the next year, but your employer must elect to allow this option.

THIS WEEK

Sysco announces Q2 results Monday. | Advance Auto Parts, Agilent Technologies, and Home Depot present earnings on Tuesday. | On Wednesday, July retail sales numbers are out, along with earnings from Briggs & Stratton and Cisco. | Nordstrom, Nvidia, and Walmart share quarterly results on Thursday, as Wall Street also considers new data on initial jobless claims and July homebuilding activity. | The University of Michigan’s initial August consumer sentiment index appears on Friday, plus the Conference Board’s latest leading indicators index and earnings from Deere & Co.

Q U O T E O F T H E W E E K

“Do not accustom yourself to use big words for little matters.”

SAMUEL JOHNSON

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	2.40	15.88	12.82	11.48
NASDAQ	13.55	26.09	22.84	22.13
S&P 500	5.97	16.20	13.50	11.71

REAL YIELD	8/10 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.78	0.40	0.33	1.80

Sources: wsj.com, bigcharts.com, treasury.gov – 8/10/186,7,8,9

CITATIONS:

1 – cnbc.com/2018/08/10/us-cpi-july-2018.html [8/10/18]

2 – reuters.com/article/us-usa-economy-inventories/u-s-producer-prices-unchanged-in-july-idUSKBN1KU1JH [8/9/18]

3 – factset.com/hubfs/Resources%20Section/Research%20Desk/Earnings%20Insight/EarningsInsight_081018.pdf [8/10/18]

4 – bloomberg.com/news/articles/2018-08-10/oil-set-for-sixth-weekly-loss-as-u-s-china-trade-war-escalates [8/10/18]

5 – thestreet.com/markets/stocks-slide-amid-currency-crisis-in-turkey-14679908 [8/10/18]

6 – markets.wsj.com/us [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F10%2F17&x=0&y=0 [8/10/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F10%2F17&x=0&y=0 [8/10/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F10%2F17&x=0&y=0 [8/10/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F9%2F13&x=0&y=0 [8/10/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F9%2F13&x=0&y=0 [8/10/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F9%2F13&x=0&y=0 [8/10/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F11%2F08&x=0&y=0 [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F11%2F08&x=0&y=0 [8/10/18]

7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F11%2F08&x=0&y=0 [8/10/18]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/10/18]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/10/18]

06 Aug 2018

Weekly Economic Update for August 6, 2018

by code204 | in Economic Update, News

Randy C. Benning, CFP Presents:

ECONOMY ADDS 157,000 NET NEW JOBS

Employers expanded their payrolls in July, but new Department of Labor data showed the hiring pace slowing down. May and June gains, however, were revised up by a combined 59,000, bringing average monthly job growth over the past three months to 224,000. Even with fewer hires, the headline unemployment rate ticked down to 3.9%, and the U-6 rate (factoring in underemployed workers) dropped 0.3% to 7.5%, underneath where it was in July 2017. Last month, wages had improved 2.7%, year-over-year.1

GOOD NEWS FOR CONSUMER SPENDING AND CONSUMER CONFIDENCE

Personal spending, according to the Department of Commerce, rose 0.4% during June on the heels of a 0.5% May climb. Personal incomes improved by 0.4% in June, duplicating the number from May. Beating the 127.0 forecast of analysts surveyed by MarketWatch, the Conference Board’s July consumer confidence index rose 0.3 points to 127.4.2

ISM PURCHASING MANAGER INDICES DECLINE

While still in fine shape, the Institute for Supply Management’s twin gauges measuring economic activity in the factory and service sectors fell last month. The Institute’s manufacturing PMI went from a 60.2 June reading to a 58.1 July mark. ISM’s non-manufacturing PMI lost 3.4 points on the month, heading down to 55.7.3

STOCKS ADVANCE FOR A FIFTH STRAIGHT WEEK

Up 0.76% over five trading sessions, the S&P 500 settled at 2,840.35, Friday. The Nasdaq Composite added 0.96% for the week, reaching 7,812.01 at Friday’s closing bell. Blue chips were flat for the week: the Dow Industrials gained but 0.05% to 25,462.58. All three indices were positive for Friday, even with news that China planned to levy import taxes on $60 billion more of American exports.4,5

T I P O F T H E W E E K

Usually, there is little point in trying to negotiate a financial aid package for a student at one university by referencing another offer made by a different school. Most colleges have tight financial aid budgets to begin with and firm award guidelines for financial aid officers to follow.

THIS WEEK

Monday’s earnings parade includes announcements from Andeavor, Boise Cascade, Hertz Global Holdings, Marriott International, Mosaic, Sempra Energy, Tyson Foods, and Weight Watchers. | Tuesday, Wall Street considers earnings from Aramark, Avis Budget Group, Camping World, Dean Foods, Discovery Channel, Hostess Brands, Invacare, Office Depot, Papa John’s, Snap, Walt Disney Co., and Wendy’s. | Earnings from CVS Health, Green Dot, Horizon Pharma, Keurig Dr. Pepper, Manulife, Michael Kors, Monster Beverage, Roku, Sinclair Broadcasting, Starwood Hotels & Resorts, Sunoco, TiVo, Twenty-First Century Fox, U.S. Auto Parts, Weibo, Wyndham Destinations, and Yelp appear Wednesday. | Thursday, the July Producer Price Index arrives, along with a new initial jobless claims report and earnings from Gannett, Lions Gate, News Corp., Norwegian Cruise Line, Planet Fitness, Tronc, Viacom, and Vista Outdoor. | Friday marks the appearance of the July Consumer Price Index.

Q U O T E O F T H E W E E K

“The greatest obstacle to discovery is not ignorance – it is the illusion of knowledge.”

DANIEL BOORSTIN

% CHANGE	Y-T-D	1-YR CHG	5-YR AVG	10-YR AVG
DJIA	3.01	15.60	12.52	12.56
NASDAQ	13.16	23.21	22.35	24.18
S&P 500	6.24	14.89	13.23	12.74

REAL YIELD	8/3 RATE	1 YR AGO	5 YRS AGO	10 YRS AGO
10 YR TIPS	0.83	0.46	0.42	1.64

Sources: wsj.com, bigcharts.com, treasury.gov – 8/3/185,6,7,8

CITATIONS:

1 – nbcnews.com/business/economy/price-rising-employment-slow-wage-growth-trade-risks-n897461 [8/3/18]

2 – marketwatch.com/economy-politics/calendars/economic [8/3/18]

3 – instituteforsupplymanagement.org/ISMReport/NonMfgROB.cfm [8/3/18]

4 – foxbusiness.com/markets/stock-futures-cautiously-lower-ahead-of-july-jobs-report [8/3/18]

5 – markets.wsj.com/us [8/3/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F3%2F17&x=0&y=0 [8/3/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F3%2F17&x=0&y=0 [8/3/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F3%2F17&x=0&y=0 [8/3/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F2%2F13&x=0&y=0 [8/3/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F2%2F13&x=0&y=0 [8/3/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F2%2F13&x=0&y=0 [8/3/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F4%2F08&x=0&y=0 [8/3/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F4%2F08&x=0&y=0 [8/3/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F4%2F08&x=0&y=0 [8/3/18]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/3/18]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/3/18]