The Miller Financial Group
Slow Week Ends Lower
On Fed Fears
Weekly Update - August 13, 2013
In This Issue

Markets ended a slow trading week in the red, posting the biggest weekly decline since June. Stocks were pushed down by low volume and investor concerns about when the Federal Reserve will wind down its stimulus program. For the week, the S&P 500 lost 1.07%, the Dow fell 1.49%, snapping a six-week winning streak, and the Nasdaq slid 0.80%.[1] 

Last week was light on economic data and investors focused on whether or not the Fed is going to start tapering bond purchases after the September FOMC meeting. With a number of Fed officials going on record as supporting a September taper, it's looking increasingly likely that, if economic data continues to look optimistic, the Fed will pull the trigger next month. While Fed Chairman Ben Bernanke has reassured investors that no official date has been set, a chorus of top Fed policymakers suggested last week that they would like to start trimming back quantitative easing next month if economic reports turn out as expected, indicating that there may be some dissension in the Fed ranks.[2]  


Although recent macroeconomic reports have been largely upbeat, some economists are disappointed by the mediocre July jobs report. The net gain of 162,000 new jobs fell well below forecasts of 180,000 (and market rumors of gains of 200,000.) Digging deeper into the data, some analysts suggest that the job gains came largely from the volatile (and low-paid) part-time employment category. Other forward-looking indicators suggest that, though the headline unemployment rate dropped to 7.4% from 7.6%, it may tick upward in the near term.[3] The unemployment rate is one of the major economic indicators that the Fed uses to guide policy, meaning a fickle labor market could throw a wrench into the Fed's tapering plans. 


Looking ahead at this week's ticker, analysts and investors will be paying close attention to a raft of economic data, including July retail sales, the Philadelphia Fed Survey, and housing data for clues as to which way the Fed may jump next month. Two high-ranking Fed officials are scheduled to give speeches on Tuesday and Wednesday, meaning we may get more hints about how Fed economists feel about the economy and how likely a September taper may be.  


As we've mentioned in recent commentaries, we usually do not view minor pullbacks as cause for alarm. Healthy markets do not move up in a straight line; they move up and down. For this reason, we do our utmost to keep focused on long-term trends rather than short-term movements. If you have any questions about how the tapering of Quantitative Easing (QE), or how recent market moves may affect you, please feel free to reach out to us. It is our pleasure to be of service. 


Monday: Treasury Budget
Tuesday: Retail Sales, Import and Export Prices, Business Inventories
Wednesday: Producer Price Index, EIA Petroleum Status Report
Thursday: Consumer Price Index, Jobless Claims, Empire State Mfg. Survey, Treasury International Capital, Industrial Production, Housing Market Index, Philadelphia Fed Survey
Friday: Housing Starts, Productivity and Costs, Consumer Sentiment




Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance and International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.


U.S. wholesale inventories fell in June. Wholesale inventories, an important measure of business spending, unexpectedly fell in June for the second straight month, pulled down by a drop in automobile inventories. The 0.2% drop caused economists to trim their Q2 GDP growth estimate slightly to 2.4%.[4]

Retailers boost July sales with promotions. U.S. retailers reported higher July sales, but relied heavily on discounts and promotions to lure shoppers into stores. Thus far, consumers remain frugal during the back-to-school season, the year's second-largest retail period.[5]

China's industrial production beats expectations. The country's industrial production grew in July, showing a 9.7% increase over the same period last year. Manufacturing and industrial activity are big components of the Chinese economy, and these results could indicate that the world's second-largest economy is on the mend.[6]

Detroit bankruptcy puts the heat on local bond issuers. Michigan bond issuers that wish to tap the muni bond market are feeling the effects of Detroit's debt default as higher interest rates (due to the perceived risk of new muni bonds) make bond offerings expensive.[7]




Quote Of The Week
Quote Of The Week
Fountain Pen


"You are never too old to set another goal or to dream a new dream."
- C. S. Lewis 

Recipe Of The Week
Recipe Of The Week
Fork and Knife
Chocolate Pound Cake With Honeyed Ricotta
This simple dessert combines store-bought ingredients for an unexpected treat.
Recipe from


4 slices chocolate pound cake
3/4 cup ricotta, at room temperature
1/4 cup honey



Dividing evenly, top the pound cake with the ricotta and drizzle with the honey.



Tax Tips
Tax Tips

Don't Get Scammed by Fake IRS Communications


The IRS does not initiate contact with taxpayers by email to request personal or financial information. This includes any type of electronic communication, such as text messages and social media channels. So be on the alert for any suspect attempt of phishing, and if you come across any such attempt, report it (or forward the email message) to the IRS's anti-scam team at [email protected].


Golf Tip
Golf Tip

A Tip for Beginners


If you've taken up golf recently, probably the best tip is: Take it slow! In other words, concentrate and focus on the shot of the moment. Try to match your expectations to your skills. This way you will not become overwhelmed by trying to perfect your game too early and can focus on enjoying your time on the course.


Healthy Lifestyle
Healthy Lifestyle
Medical Cross

Home Remedy for Back Pain


Back pain affects many people and can greatly diminish quality of life. If you'd like to avoid taking medication, try eucalyptus oil as it's known to be a very beneficial remedy for back pain. Apply some eucalyptus oil to the affected area. Adding ginger paste to the eucalyptus oil and then applying also helps.


Green Living
Green Living

Give Old Jeans New Life


Not sure what to do with that old pair of jeans? You can always donate them or turn them into jean shorts, but here are a few suggestions that require very simple skills with needle & thread:


* Floor Mat
* Pencil Case
* Apron
* Bed Book Bag
* Bucket Caddy
* Jean Purse
* Denim Dog Jacket


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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.


Diversification does not guarantee profit nor is it guaranteed to protect assets.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.


The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.


The 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 stocks of technology companies and growth companies.


The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.


The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.


The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.


Google Finance is the source for any reference to the performance of an index between two specific periods.


Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.


Past performance does not guarantee future results.


You cannot invest directly in an index.


Consult your financial professional before making any investment decision.


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.


These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. 


Please consult your financial advisor for further information.


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Robert G. Miller, CFP , RFC, LUTCF
The Miller Financial Group
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