June 19, 2017 - Mixed Markets Continue

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BASKING RIDGE, NJ- Markets remained mixed last week as the Dow closed at another record high, while the NASDAQ fell and the S&P 500 held steady.[1] By Friday, the Dow gained 0.52%, the NASDAQ fell -0.92%, and the S&P 500 gained a slight 0.05%.[2] Meanwhile, the MSCI EAFE remained virtually unchanged from last week, down only -0.002%.[3]

In other markets, oil closed at $44.74 a barrel, down 2.4% on the week - its fourth week of declines.[4] Overall, European equity markets remained steady while most Asian markets recorded modest gains at week's end.[5]

The Fed Increases Interest Rates

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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%.[6] This was the third interest rate hike by the Fed in the last six months.[7] 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.[8] The Fed currently plans to sell approximately $10 billion monthly starting later this year.[9]

Further, last Wednesday, Federal Reserve Chair Janet Yellen reported on the Fed's belief that the current weak inflation numbers are temporary.[10] 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.[11]

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.[12]

Retail Sales Soften: Retail sales had their largest monthly drop since January 2016.[13] Sales declined 0.3% in May against predictions of a 0.1% gain over April. The report includes a variety of disappointing numbers:[14]

  • 0.1% decrease for restaurants
  • 0.2% dip for automotive vehicles
  • 1.0% 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.[15]

CPI Falls: The Consumer Price Index fell 0.13% in May.[16] The disappointing numbers mark another decline - the 2nd in 3 months - as economists had expected a 0.2% increase from April's number.[17]

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.[18]

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.[19]

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.

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  1. http://www.cnbc.com
  2. http://performance.morningstar.com
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  3. https://www.msci.com
  4. http://www.cnbc.com
  5. http://www.cnbc.com
    http://www.cnbc.com
  6. http://wsj-us.econoday.com
  7. http://www.reuters.com
  8. http://wsj-us.econoday.com
  9. http://money.cnn.com
  10. http://www.reuters.com
  11. http://wsj-us.econoday.com
  12. http://wsj-us.econoday.com
  13. http://www.cnbc.com
  14. http://wsj-us.econoday.com
  15. http://wsj-us.econoday.com
  16. http://wsj-us.econoday.com
  17. http://wsj-us.econoday.com
    http://www.cnbc.com
  18. http://wsj-us.econoday.com
  19. http://wsj-us.econoday.com

About Wealth Financial Partners, LLC

Wealth Financial Partners is an independent retirement planning and wealth management firm based out of Basking Ridge, New Jersey with expertise in financial life planning including investments, long-term care insurance, life insurance, 401(k) rollovers, retirement planning, tax planning and wealth conservation. For more information about Wealth Financial Partners, LLC, (877) 714-2362

106 Allen Road, 1st Floor, Basking Ridge, NJ 07920  walter@walterpardo.com

Securities and advisory services are offered through Independent Financial Group, LLC (IFG), a registered broker-dealer and investment advisor. Member FINRA/SIPC. Wealth Financial Partners and IFG are unaffiliated entities. OSJ Branch: 12671 High Bluff Dr. Ste 200 San Diego, CA 92130 licensed in: CA, FL, GA, KS, MN, NY, NJ, IL, PA, OH, SC, CT. 

Information provided is from sources believed to be reliable however we cannot guarantee or represent that it is accurate or complete. Because situations vary, any information provided on this site is not intended to indicate suitability for any particular investor. Hyperlinks are provided as a courtesy. 

The opinions expressed herein are the writer's alone, and do not reflect the opinions of TAPinto.net or anyone who works for TAPinto.net. TAPinto.net is not responsible for the accuracy of any of the information supplied by the writer.

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