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WEEKLY QUOTE
“We
are what we pretend to be, so we must be careful what we pretend to be.”
- Kurt Vonnegut, Jr.
WEEKLY TIP
The
investment markets experience cycles, and the major indices inevitably see downturns
at some point. If you are focused on long-term performance, the good news is
that the markets have the potential to rebound in reasonable time. If your portfolio
is diversified, that may provide you with some insulation in a correction.
WEEKLY RIDDLE
Shake
me, and I’ll do what you want, but first you must extract me from the earth. I
may be on the tip of your tongue and over your shoulder. What am I?
Last week’s riddle:
What is the only type of “worm” that will never risk ending up on
a hook?
Last week’s answer:
A bookworm.
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August 16,
2017
TAME INFLATION
PERSISTS
Can the Federal Reserve justify another interest rate hike
in the second half of 2017? Given weak inflation pressure, maybe not. The
central bank has set a 2% yearly inflation target, but the Consumer Price
Index rose only 0.1% in July, resulting in a 1.7% year-over-year gain. Core
consumer prices rose 0.1% for a fourth consecutive month in July, so
annualized core inflation was also at 1.7%. The Producer Price Index fell
0.1% last month; analysts polled by Briefing.com expected a 0.2% rise.1,2
ANALYSIS: EARNINGS
GROW AT a 10% PACE
More than 90% of companies in the S&P 500 have now
reported second-quarter results. FactSet, the respected financial analytics
firm, now projects a blended earnings growth rate of 10.2% for the S&P
500 for the second quarter, along a with 5.1% blended sales growth rate.
S&P component firms generating less than 50% of their sales outside the
U.S., however, are set to record 14.0% blended earnings growth and 6.0%
blended revenue growth.3
THE PRICE OF GOLD
RISES
At Friday’s close, the yellow metal hit a 2-month high of
$1,294.00 on the COMEX as investors looked away from equities. Gold gained
2.3% on the week.4
TURBULENCE FOR
WALL STREET
Diplomatic tensions sent stocks lower last week. Across
August 7-11, the Dow Jones Industrial Average declined 1.06% to 21,858.32;
the S&P 500, 1.43% to 2,441.32; the Nasdaq Composite, 1.50% to 6,256.56. Volatility
certainly came back: the CBOE VIX jumped 53.44% to end the week at 15.39.5
THIS WEEK: On Monday, Cumulus Media and Sysco report
quarterly results. Tuesday brings July retail sales numbers and earnings from
Advance Auto Parts, Agilent, Coach, Dick’s Sporting Goods, Home Depot, TJX,
and Urban Outfitters. On Wednesday, minutes from the July Federal Reserve
policy meeting appear; Wall Street will also interpret a report on July
housing starts and building permits and earnings news from Cisco, L Brands,
NetApp, Stein Mart, and Target. Fresh reports on initial jobless claims and
industrial production roll in Thursday, complemented by earnings from Alibaba
Group, America’s Car-Mart, Applied Materials, Bon-Ton Stores, Gap, Ross
Stores, Sportsman’s Warehouse, Stage Stores, and Walmart. Friday, investors
consider earnings from Deere & Co. and Estee Lauder and the preliminary
August consumer sentiment index from the University of Michigan.
Sources: wsj.com, bigcharts.com, treasury.gov - 8/11/175,6,7,8
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.
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«RepresentativeDisclosure»
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 - reuters.com/article/us-usa-economy-inflation-idUSKBN1AR19S
[8/11/17]
2 - briefing.com/investor/calendars/economic/2017/08/07-11
[8/11/17]
3 - insight.factset.com/sp-500-companies-with-more-global-exposure-reported-higher-earnings-growth-in-q2
[8/11/17]
4 - marketwatch.com/story/gold-marks-highest-finish-since-early-june-up-more-than-2-for-the-week-2017-08-11
[8/11/17]
5 - markets.wsj.com/us
[8/11/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F11%2F16&x=0&y=0
[8/11/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F11%2F16&x=0&y=0
[8/11/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F11%2F16&x=0&y=0
[8/11/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F10%2F12&x=0&y=0
[8/11/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F10%2F12&x=0&y=0
[8/11/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F10%2F12&x=0&y=0
[8/11/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F10%2F07&x=0&y=0
[8/11/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F10%2F07&x=0&y=0
[8/11/17]
6 - bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F10%2F07&x=0&y=0
[8/11/17]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield
[8/11/17]
8 -
treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll
[8/11/17]
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Wednesday, August 16, 2017
Economic Update for the week of August 16th, 2017
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