Weekly Economic Update: September 2020

Tuesday, September 29, 2020

Economic Update for the week of September 29th, 2020

In this week’s recap: Stocks have a mixed reaction to ongoing uncertainty; additional fiscal stimulus on hold. Weekly Economic Update Presented by Troy L Thompson, CPF September 29, 2020 THE WEEK ON WALL STREET Stocks were mixed last week as worries that stretched from Washington D.C., where prospects of a new fiscal stimulus bill dimmed, to Europe, which saw an increase of new COVID-19 cases. The Dow Jones Industrial Average declined 1.75%, while the Standard & Poor’s 500 fell 0.63%. The Nasdaq Composite index gained 1.11% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, slumped 4.20%.1-3 LATE FRIDAY RALLY PARES LOSSES Dwindling chances of a federal fiscal stimulus, pre-election jitters, and worries over a second wave of coronavirus infections in Europe weighed heavily on investors. The weakness in technology persisted. The Department of Justice proposal to curb legal protections for internet companies and require them to take greater responsibility for the content on their sites adding to that sector’s woes.4 Energy stocks were also hit hard on concerns of a slowdown in economic growth hurting oil demand. The week wasn’t entirely absent of good news. Investors focused on reports of new progress in developing a vaccine and the passage in the House of Representatives of a bipartisan continuing resolution bill to fund the government through December 11th.5 Absent any apparent catalyst, stocks rallied in the final days of the week, cutting losses on major indices and powering the NASDAQ Composite to a weekly gain. FISCAL STIMULUS ON LIFE SUPPORT Market hopes for an additional fiscal stimulus bill, which were already fading, suffered another setback as events in Washington, D.C., appeared to make it more unlikely that lawmakers and the president could come together to fashion a compromise spending bill. Many economists and market observers, along with Federal Reserve Chairman Jerome Powell, believe that further spending may be needed to maintain the momentum of the current economic recovery. T I P O F T H E W E E K Applying for a mortgage online could save you some money in terms of closing costs, origination fees and interest rates as the online application cost is less for the lender to bear. THE WEEK AHEAD: KEY ECONOMIC DATA Tuesday: Consumer Confidence Index. Wednesday: ADP (Automated Data Processing) Report. Gross Domestic Product (GDP). Thursday: Jobless Claims. Friday: Employment Situation. Factory Orders. Source: Econoday, September 25, 2020 The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. THE WEEK AHEAD: COMPANIES REPORTING EARNINGS Tuesday: Micron Technologies (MU), McCormick (MKC). Thursday: Constellation Brands (STZ), Pepsico (PEP), Conagra Brands (CAG). Source: Zacks, September 25, 2020 Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice. Q U O T E O F T H E W E E K “Live out of your imagination, not your history.” DR. STEPHEN COVEY T H E W E E K L Y R I D D L E A supermarket sign says you can buy energy bars at $12 a dozen. At that price, how much would it cost you to buy 100 energy bars? LAST WEEK’S RIDDLE: A family has a mother, father, and four daughters. Each daughter has one brother. How many people are in the family? ANSWER: Seven people - each of the daughters have one brother, there is not one brother for each daughter. Troy L Thompson, CFP may be reached at 515-432-5421 or troy@thompsonfinancialinc.com www.thompsonfinancialinc.com Know someone who could use information like this? Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.) Troy Thompson, CFP DBA Thompson Financial and Hanson Asset Strategies Securities offered through FIRST HEARTLAND CAPITAL, INC. Member FINRA & SIPC. Thompson Financial is not affiliated with FIRST HEARTLAND CAPITAL, INC. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security. Copyright 2020 FMG Suite. CITATIONS: 1. The Wall Street Journal, September 25, 2020 2. The Wall Street Journal, September 25, 2020 3. The Wall Street Journal, September 25, 2020 4. The Wall Street Journal September 23, 2020 5. CNN.com, September 22, 2020 CHART CITATIONS: The Wall Street Journal, September 25, 2020 The Wall Street Journal, September 25, 2020 treasury.gov, September 25, 2020

Wednesday, September 23, 2020

Economic Update for the week September 23rd, 2020

In this week’s recap: The tech sector slip continues for stocks; the Federal Reserve signals that interest rates will not be increased for some time. Weekly Economic Update Presented by Troy L Thompson, CFP September 23, 2020 THE WEEK ON WALL STREET Stocks slipped as the technology sector remained under pressure and a mid-week announcement by the Federal Reserve failed to inspire investors. The Dow Jones Industrial Average declined 0.03%, while the Standard & Poor’s 500 fell 0.64%. The Nasdaq Composite index dropped 0.56% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.75%.1,2,3 TECHNOLOGY PULLS STOCKS LOWER As has been the case in recent weeks, technology stocks led the market higher, then lower in an otherwise turbulent week of trading. Merger and acquisition activity announced at the start of the week generated a rush back into technology stocks, sparking a rebound from the previous week’s drop. Stocks continued to advance until Wednesday, when investors began to digest comments from the Fed’s Federal Open Market Committee meeting. The Fed delivered a message that coupled assurances of continued low rates with concerns about the health of the economic recovery.4 THE FED STAYS THE COURSE In the last Federal Open Market Committee (FOMC) meeting before the November election, the Fed signaled that interest rates would not be increased “until labor market conditions have reached levels consistent with the committee's assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.”4 Most Fed officials do not see this happening until 2023. While the Fed maintained its view on the importance of fiscal stimulus to help American workers and businesses, it did improve its outlook for unemployment in its latest economic outlook. The Fed now expects unemployment would average around 7-8% in the final three months of the year, down from its June prediction of around 9-10%.5 T I P O F T H E W E E K Always explore the alternatives before you make a big-ticket purchase. A few minutes of online searching may bring you exactly what you want (or close) at considerable savings. THE WEEK AHEAD: KEY ECONOMIC DATA Tuesday: Existing Home Sales. Thursday: Jobless Claims. New Home Sales. Friday: Durable Goods Orders. Source: Econoday, September 18, 2020 The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision. THE WEEK AHEAD: COMPANIES REPORTING EARNINGS Tuesday: Nike (NKE), Autozone (AZO), Fedex (FDX). Wednesday: General Mills (GIS). Thursday: Costco Wholesale (COST), Darden Restaurants (DRI), Carnival Corp. (CCL). Source: Zacks, September 18, 2020 Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice. Q U O T E O F T H E W E E K “Simplicity is the ultimate sophistication.” LEONARDO DA VINCI T H E W E E K L Y R I D D L E A family has a mother, father, and four daughters. Each daughter has one brother. How many people are in the family? LAST WEEK’S RIDDLE: A plastic bottle filled with cola weighs one liter. What do you need to add to it to make it weigh less than two ounces? ANSWER: Add a hole to it. Troy L Thompson, CFP may be reached at 515-432-5421 or troy@thompsonfinancialinc.com www.thompsonfinancialinc.com Know someone who could use information like this? Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.) Troy Thompson, CFP DBA Thompson Financial and Hanson Asset Strategies Securities offered through FIRST HEARTLAND CAPITAL, INC. Member FINRA & SIPC. Thompson Financial is not affiliated with FIRST HEARTLAND CAPITAL, INC. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice. The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results. The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general. U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors. International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Please consult your financial professional for additional information. This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security. Copyright 2020 FMG Suite. CITATIONS: 1. The Wall Street Journal, September 18, 2020 2. The Wall Street Journal, September 18, 2020 3. The Wall Street Journal, September 18, 2020 4. The Wall Street Journal, September 16, 2020 5. The Wall Street Journal, September 16, 2020 CHART CITATIONS: The Wall Street Journal, September 18, 2020 The Wall Street Journal, September 18, 2020 treasury.gov, September 18, 2020

Tuesday, September 15, 2020

Economic Update for the week of September 15th, 2020

In this week’s recap: Stocks continued a downward slide in response to continued uncertainty; fiscal stimulus still delayed.

Weekly Economic Update

Presented by Troy L Thompson, CFP September 15, 2020

THE WEEK ON WALL STREET

Stocks traveled a volatile path last week as investors appeared concerned about the upcoming elections, an uncertain economy, and more delays with additional fiscal stimulus.

The Dow Jones Industrial Average slid 1.66%, while the Standard & Poor’s 500 slumped 2.51%. The Nasdaq Composite index plummeted 4.06% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 1.44%.^1,2,3

Stocks Continue To Slip

In a holiday-shortened week of trading, stocks resumed their slide from the prior week, with the technology-heavy Nasdaq slipping into correction territory in a three-day span ended on Tuesday, September 8th. (A correction is defined as a decline of at least 10% from a recent high.)⁴

After staging a strong rebound on Wednesday, stocks once again headed lower as the Senate failed to pass another coronavirus stimulus bill. Mega-cap technology companies remained under pressure throughout the week. Energy stocks added to investors woes, plunging on data showing an unexpected build-up in inventories.⁵

The market ended the week on a mixed note, as technology companies lost additional ground.

Final Thought

On Friday the nation commemorated the tragic events of September 11, 2001.

We join all Americans in remembering the lives we lost that day and the profound impact on the victims’ families. We are reminded that it was the unity, kindness, and warmth that we collectively rediscovered in the wake of 9/11 that saw us through that difficult period.

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

Some companies match employee retirement plan contributions. So if your budget allows, contribute enough to qualify for the match.

THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: Industrial Production.

Wednesday: Federal Open Market Committee (FOMC) Announcement.

Thursday: Jobless Claims. Housing Starts.

Friday: Leading Economic Indicators.

Source: Econoday, September 11, 2020

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Adobe Systems (ADBE), Lennar Corporation (LEN), Fedex (FDX).

Source: Zacks, September 11, 2020

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

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

“Popularity: it is glory’s small change.”

VICTOR HUGO

T H E W E E K L Y R I D D L E

A plastic bottle filled with cola weighs one liter. What do you need to add to it to make it weigh less than two ounces?

LAST WEEK’S RIDDLE: If it were two hours later than right now, it would be half as long until midnight as it would be if it were an hour later than right now. What time is it?

ANSWER: 9:00 PM.

Troy L Thompson, CFP may be reached at 515-432-5421 or troy@thompsonfinancialinc.com
www.thompsonfinancialinc.com

Know someone who could use information like this?
Please feel free to send us their contact information via phone or email. (Don’t worry – we’ll request their permission before adding them to our mailing list.)

Troy Thompson, CFP

DBA Thompson Financial and Hanson Asset Strategies

Securities offered through FIRST HEARTLAND CAPITAL, INC. Member FINRA & SIPC.

Thompson Financial is not affiliated with FIRST HEARTLAND CAPITAL, INC.

Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost.

The forecasts or forward-looking statements are based on assumptions, may not materialize, and are subject to revision without notice.

The market indexes discussed are unmanaged, and generally, considered representative of their respective markets. Index performance is not indicative of the past performance of a particular investment. Indexes do not incur management fees, costs, and expenses. Individuals cannot directly invest in unmanaged indexes. Past performance does not guarantee future results.

The Dow Jones Industrial Average is an unmanaged index that is generally considered representative of large-capitalization companies on the U.S. stock market. Nasdaq Composite is an index of the common stocks and similar securities listed on the Nasdaq stock market and is considered a broad indicator of the performance of technology and growth companies. The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) and serves as a benchmark of the performance of major international equity markets, as represented by 21 major MSCI indexes from Europe, Australia, and Southeast Asia. The S&P 500 Composite Index is an unmanaged group of securities that are considered to be representative of the stock market in general.

U.S. Treasury Notes are guaranteed by the federal government as to the timely payment of principal and interest. However, if you sell a Treasury Note prior to maturity, it may be worth more or less than the original price paid. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

International investments carry additional risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to a specific country, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility.

Please consult your financial professional for additional information.

This content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG is not affiliated with the named representative, financial professional, Registered Investment Advisor, Broker-Dealer, nor state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and they should not be considered a solicitation for the purchase or sale of any security.

CITATIONS:

1. The Wall Street Journal, September 11, 2020
2. The Wall Street Journal, September 11, 2020
3. The Wall Street Journal, September 11, 2020
4. CNBC.com, September 8, 2020
5. CNBC.com, September 9, 2020

CHART CITATIONS:

The Wall Street Journal, September 11, 2020
The Wall Street Journal, September 11, 2020
treasury.gov, September 11, 2020

Wednesday, September 9, 2020

Economic Update for the week of September 9th, 2020

In this week’s recap: Stocks stall late in the week, thanks to tech markets slide. The jobs recovery makes continued progress.

Weekly Economic Update

Presented by Troy L Thompson, CFP September 9, 2020

THE WEEK ON WALL STREET

A late week sell-off sent stocks broadly lower as investors took some profits after stocks reached all-time highs earlier in the week.

The Dow Jones Industrial Average slid 1.82%, while the Standard & Poor’s 500 slumped 2.31%. The Nasdaq Composite index dropped 3.27% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, fell 0.62%.^1-3

Gravity Reasserts Itself

Stocks hit a wall late last week as the technology companies, which had led the market higher, slipped in Thursday and Friday trading, dragging down the overall market.

The week began on an upbeat note as August momentum continued into the start of September. While participation in the rally on Tuesday and Wednesday was fairly broad, technology stocks continued to be the focus of market strength. But that sentiment changed quickly on Thursday.

With little warning and no obvious catalyst, it remains unclear whether the technology selloff last week was the result of market technicals or a fundamental change in investor outlook. The coming weeks may provide some clarity in this regard.

Labor Market Recovery Sputters Forward

Last week saw a series of employment-related reports that evidenced a continued labor market recovery.

The Automated Data Processing (ADP) employment survey showed that private payrolls increased by 428,000 in August, falling short of consensus expectations of over 1.1 million. News turned more positive as new jobless claims checked in at 881,000—an improvement from the over one million new claims the prior week. Americans receiving unemployment declined by 1.24 million to 13.3 million—half the peak number in May.^4,5,6

Finally, the monthly jobs report indicated that nearly 1.4 million nonfarm jobs were added last month, with the unemployment rate declining to 8.4%. The progress was predominantly attributable to government hiring, primarily of new Census workers, though the retail, leisure and hospitality sectors saw gains in new hiring.⁷

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

Sometimes teens confuse wants with needs. Pointing out the difference will help them handle money with more maturity (and it may help you save a dollar or two).

THE WEEK AHEAD: KEY ECONOMIC DATA

Wednesday: Job Openings and Turnover Survey (JOLTS).

Thursday: Jobless Claims.

Friday: Consumer Price Index (CPI).

Source: Econoday, September 4, 2020

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Lululemon (LULU), Coupa Software (COUP), Slack Technologies (WORK).

Thursday: Chewy (CHWY), Peloton (PTON).

Friday: Kroger (KR).

Source: Zacks, September 4, 2020

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

“Laughter is by definition healthy.”

DORIS LESSING

T H E W E E K L Y R I D D L E

If it were two hours later than right now, it would be half as long until midnight as it would be if it were an hour later than right now. What time is it?

LAST WEEK’S RIDDLE: There is a kind of sweet bean that never grows in a garden. What is it?

ANSWER: Jelly Bean.