In this week’s recap: a milestone for the
current bull market, new record highs for two equities benchmarks, a dip in home
sales, and a win for oil.
Weekly Economic Update
Presented by Troy L Thompson CFP, August 29, 2018
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
|
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.
T H E W E E K L Y
R I D D L E
LAST
WEEK’S RIDDLE: What is ready when you add a letter at its end?
ANSWER:
The word “read.”
Troy L
Thompson, CFP may be reached at 515-432-5421 or troy@thomsonfinancialinc.com
www.thompsonfinancialinc.com
www.thompsonfinancialinc.com
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Troy Thompson, CFP
DBA: Thompson Financial, Inc.
and Hanson Asset Strategies
Securities offered through
FIRST HEARTLAND CAPITAL, INC.
Member FINRA & SIPC.
Thompson Financial is not affiliated with
FIRST HEARTLAND CAPITAL, INC.
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
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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
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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
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weighted index composed of the common stocks of 500 leading companies in
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Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific
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(NYMEX) is the world's largest physical commodity futures exchange and the
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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
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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]
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=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]
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]
