Weekly Market Commentary July 17, 2017

Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

Headline CPI for June came in at 1.6%, down from 1.9% the previous month. Fed’s chair Yellen reiterated her confidence about the U.S. economy, but noted that the committee, “…stands ready to adjust policy if it appears the inflation undershoot appears consistent.” The less hawkish tone sent the U.S. equity markets higher. The S&P 500 climbed 1.4%. Global stocks, represented by the MSCI ACWI, soared 2.1% and the Bloomberg BarCap U.S. Aggregate Bond Index rose 0.4%.

Among the key economic releases last week, the JOLTs report revealed the about 429,000 people were hired in May, marking the biggest increase since March 2004.  Other data points were lower than expected. Inflation, and retail sales both produced fairly weak numbers that were below moderate expectations.

While the economy is still growing, based on last week’s manufacturing and service PMIs and the recent JOLTs report, the pace has decelerated. The Q2 earnings season that started on Friday will be watched keenly as investors look for evidence of sustainable economic growth.


What are we reading?

Below are some areas of the market we paid particularly close attention to this week. For further information, we encourage our readers to follow the links:

U.S. Consumer Price Index and U.S. Retail Sales

Two key data points released Friday morning showed weaker than expected growth. Monthly prices were unchanged and the annual rate of inflation increased by only 1.6% after rising 1.9% in May. Expectations were for a monthly increase of 0.2%. Retail sales also missed expectations, dropping 0.2% and falling for the second straight month. An increase of 0.1% was expected. Both numbers point to a modest slowdown in the economy.

Yellen indicates that Fed may not need to hike rates much more

In her testimony on Capitol Hill, Yellen signaled that the Fed would take a cautious approach to tightening policy in the face of an uncertain inflation outlook. She said the Fed would continue to raise interest rates gradually, though it would change plans if inflation weakness persisted. Her testimony likely indicates the Fed won’t raise rates in September. Investors cheered Yellen’s dovish tone.

Early indications point to a surprisingly strong second-quarter earnings season

About two dozen companies have reported earnings for the second quarter. Estimated 78% of them have beaten on EPS, 78% have beaten on sales and 70% have beaten on both. Earnings so far are up nearly 12 percent from the second quarter of last year. While earnings are important, extra importance is being placed on revenues in the slow-growing global economy.


Fun  Story of the Week

What Happens if a Chinese Bride Throws her Bouquet and No One Tries to Catch It

Western style weddings are all the rage in China. Best men sharing memories, tuxedos, first dances and bouquet tosses are a steeper learning curve to many Chinese wedding parties than learning how to use chopsticks is for a multi-generational Midwesterner.

In steps the wedding coordinator to save the day. Earning as much as $2,500 a wedding, Chinese wedding coordinators organize the ceremony, encourage nervous best men, cajole hesitant single women to catch flowers and act as entertainment host for the wedding. No one would call it easy. According to one wedding coordinator, “’It’s a hard line of work if you don’t believe in love.”


https://www.bls.gov/news.release/jolts.nr0.htm

Share:
facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.
Share Post: facebook Created with Sketch. twitter Created with Sketch. linkedin Created with Sketch. mail Created with Sketch. print Created with Sketch.

RECENT POSTS

Market Commentary: S&P Decline Continues While Consumer Demand Keeps Climbing

The S&P 500 continued its string of negative weeks, dropping 3% last week. It was the seventh straight weekly decline in the index of large-cap stocks. The S&P 500 temporarily fell more than 20% on Friday, but the market rallied and the index finished down 18.1% from its January all …

Market Commentary: S&P 500 Decline Continues, But Inflation Shows Signs of Leveling Off

Market volatility continues to make life challenging for investors. The S&P 500 declined for the sixth straight week, the longest streak since 2011. Six-week losing streaks used to be much more common. The S&P 500 declined at least six consecutive weeks six different times from 2000 to 2011.

Special Market Commentary: What’s Stressing Out Stocks? These Market Inflection Points

So far, 2022 is faring to have one of the worst ever starts for stock returns. Only 1932 and 1939 have proven to be more difficult through the first four calendar months. The reasons are numerous and front-of-mind for us all: an unexpected war in Ukraine, the lingering impacts of COVID-19, …

Market Commentary: U.S. and U.K. Central Banks Offer Contradictory Outlooks, Making for a Rollercoaster Market Week

Market volatility surged last week, although the end result for the S&P 500 was a decline of only 0.2%. Central banks were the main culprits for the volatility. On Wednesday, the Federal Reserve announced it would raise rates 0.5% and clarified plans on how it will shrink its balance sh …
1 2 3 66 67 68

Get in Touch

In just 15 minutes we can get to know your situation, then connect you with an advisor committed to helping you pursue true wealth.

Schedule a Consultation

TweetsFollow Us