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Markets Mixed Over Tapering Fears
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| Weekly Update - August 27, 2013 |
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Markets ended the week mixed, showing an upward trend after the previous week's losses, but still subject to investor nerves. For the week, the S&P 500 gained 0.46%, the Dow lost 0.47%, and the Nasdaq gained 1.53%.[1]
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Uncertainty around the Fed's tapering schedule drove much of market activity last week. While many Fed speakers have suggested that tapering may begin after the September FOMC meeting, they have cautioned that the Fed's plans remain data dependent. Mixed housing data, unconvincing jobs growth, and low inflation may argue for a delay in tapering, but policy direction is under heavy debate within the Fed and it's hard to know which date the Fed will choose.[2] What we do know, based on FOMC minutes and Fed speeches, is that unwinding will be gradual and policy changes will be slow, giving markets time to adapt to the new environment. As the days tick down to the September 17 FOMC meeting, we can expect additional market volatility. However, investors have had significant time to digest the eventual end of quantitative easing, and we can hope that any negative market reactions will be short-lived.
On the jobs front, though weekly claims edged upward, the fewest workers in five years applied for unemployment benefits for the month ending August 17, indicating that the labor market slowly continues to improve. However, regional data shows a mixed picture, with the jobless rate still climbing in 28 states and major employers announcing job cuts.[3] Fed watchers have indicated that the August jobs report will be a major factor in any decisions made at the September FOMC meeting.[4]
A technical glitch caused the Nasdaq to shut down for three hours on Thursday, halting trading in thousands of stocks. The shutdown was the longest in recent history, and exchange officials are investigating the origins of the technical fault. Despite rattled trading desks, investors shrugged off the shutdown and the Nasdaq still closed up for the week.[5]
Looking at the week ahead, investors will be closely watching the release of important housing, consumer, and manufacturing reports as well as additional speeches by the St. Louis Fed President James Bullard. Fed watchers will also be analyzing several reports as they wait for the much-anticipated August jobs report, which will be released on September 6. The jobs plentiful/jobs hard-to-get component of Tuesday's consumer confidence report and the employment component of the Chicago PMI will hopefully give clues about general job trends this month.[6]
ECONOMIC CALENDAR:
Monday: Durable Goods Orders, Dallas Fed Mfg. Survey
Tuesday: S&P Case-Shiller HPI, Consumer Confidence
Wednesday: Pending Home Sales Index, EIA Petroleum Status Report
Thursday: GDP, Jobless Claims
Friday: Personal Income and Outlays, Chicago PMI, Consumer Sentiment
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Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance and Treasury.gov. 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.
Existing home sales up, but new home sales down. Sales of new single-family homes dropped in July to their lowest level in nine months. This is a sharp contrast to existing home sales, which rose to their highest level in three years in July. A possible explanation is the flood of private equity investors that are buying up old foreclosures.[7]
Oil spikes on refinery closure. Oil prices rose last week, settling above $106 per barrel following a major unit shutdown at a Canadian refinery. The unit is responsible for producing 70,000 barrels per day and will be closed for a week for repairs.[8]
U.S. household income below 2009 levels. Median real household income (adjusted for inflation) fell 4.4% between June 2009 and June 2013, indicating that American families are worse off now than at the end of the recession.[9]
Consumer spending probably rose in July. A preview of the official GDP report showed that improvements to the labor and housing markets underpinned an increase in the largest segment of the economy. The official GDP report will be released on August 29 and may show an upward revision in second-quarter economic activity.[10]
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"The glow of one warm thought is to me worth more than money."
- Thomas Jefferson
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Raspberry Sorbet With Whipped Cream and Meringues
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| Surprise guests with this simple, but luxurious treat. Recipe from RealSimple.com. |
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Ingredients:
1 cup heavy cream
2 tablespoons confectioners' sugar
16 small meringue cookies
2 pints raspberry sorbet
Directions:
1. In a medium bowl, whip the cream and sugar until soft peaks form; set aside.
2. Using your hands, gently break the cookies into pieces over a second medium bowl.
3. Scoop the sorbet into individual dishes. Spoon the whipped cream over each and sprinkle 1 to 2 tablespoons of the crumbled cookies over the tops.
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Give Your Taxes a Mid-Year Tune-up
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Make your taxes simple at tax time by organizing your records now. Here are some tips from the IRS on tax recordkeeping:
1. You should keep copies of your filed tax returns as part of your tax records. They can help you prepare future tax returns. You'll also need them if you need to file an amended return.
2. If you own a home or investment property, you should keep records of your purchases and other records related to those items. You should typically keep these records, including home improvements, at least three years after you have sold or disposed of the property.
3. If you own a business, you should keep records that show total receipts, proof of purchases of business expenses, and assets. These may include cash register tapes, bank deposit slips, receipt books, purchase and sales invoices. Also include credit card receipts, sales slips, canceled checks, account statements, and petty cash slips. Electronic records can include databases, saved files, emails, instant messages, faxes, and voice messages.
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Take Advantage of Swinging Downwind
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You want to take every advantage of downwind conditions. Here are the keys:
1. Tee the ball about an inch higher.
2. Move your ball 1 inch up in your stance.
3. Swing easy and be patient.
Moving the ball up means that it will take a longer period of time to get to the ball. What you will find is that you are hitting up more on the ball thus launching it higher with less spin.
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Unexpected Sources of Calcium
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While many Americans rely on dairy to get their daily dose of calcium, there are many other sources that can make a delicious addition to your diet:
- Canned Salmon: 232 mg (23% DV) in � can with bones (which provides the calcium!)
- Kale: 188 mg (19% DV) in 2 cups of chopped raw leaves
- Blackstrap Molasses: 172 mg (17% DV) in 1 tablespoon
- Dried Figs: 107 mg (10% DV) in 8 whole dried figs
- Almonds: 72 mg (7% DV) in � cup dry roasted (about 20 nuts)
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Reduce the Impact of Your Clothes Dryer
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While a clothesline is the environmentally friendly way to dry our clothes, there are occasions where they are impractical. Here are some tips to make sure to increase your dryer's efficiency, saving money on your electric bill and reducing your carbon footprint:
- Clean the lint filter frequently
- Do not overload your dryer, as air has to circulate freely for drying the clothes
- If possible, keep a window open to avoid a buildup of humidity, which reduces the efficiency of the dryer.
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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.
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[1] http://briefing.com/investor/markets/weekly-wrap/weekly-wrap-for-august-19-2013.htm
[2] http://www.reuters.com/article/2013/08/24/us-usa-fed-lockhart-idUSBRE97M0H720130824
[3] http://www.bloomberg.com/news/2013-08-22/jobless-claims-in-u-s-decrease-to-five-year-low-over-past-month.html
[4] http://www.businessinsider.com/fed-tapering-depends-on-august-jobs-data-2013-8
[5] http://www.reuters.com/article/2013/08/22/us-nasdaq-halt-tapec-idUSBRE97L0V420130822
[6] http://www.businessinsider.com/three-datapoints-to-watch-this-week-as-we-wait-for-the-crucial-august-jobs-report-2013-8
[7] http://www.cnbc.com/id/100983583
[8] http://www.cnbc.com/id/100982718
[9] http://www.cnbc.com/id/100980411
[10] http://www.bloomberg.com/news/2013-08-25/consumer-spending-probably-climbed-in-july-u-s-economy-preview.html
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