Markets End Slow Week Lower
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Weekly Update - June 16, 2014
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Markets snapped their winning streak and ended the week down slightly as investors decided to take some profits off the table. The light economic calendar led to sluggish activity since investors were reluctant to commit to positions without new data to bolster their analysis. For the week, the S&P 500 lost 0.68%, the Dow fell 0.88%, and the Nasdaq slid 0.25%.[1]
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Geopolitics took center stage last week when Iraqi insurgents captured Mosul and Tikrit, major cities in northern Iraq, and advanced toward Baghdad. In response to the threat, the U.S. moved a carrier group into the Persian Gulf to support the government in Baghdad. Analysts are worried about how instability in Iraq might affect global oil markets. U.S. crude oil rose to nearly $105/barrel on the new security fears.[2] Iraq is an important Organization of the Petroleum Exporting Countries (OPEC) producer and disruptions in regional supplies could send oil prices through the roof and throttle consumer spending.[3]
In Ukraine, the ongoing conflict escalated when well-armed pro-Russia separatists shot down a Ukrainian military plane. Russia and Ukraine have been caught in a standoff since March, when Russia annexed Crimea. European leaders spoke with Ukrainian and Russian officials about the incident, stressing the need for a cease-fire in eastern Ukraine and a return to stability.[4] EU countries rely on natural gas supplies that pass through Ukraine, and interruptions could cause price spikes and temper much-needed economic growth in Europe.
On the economic front, last week's data was mixed. Weekly jobless claims increased slightly, but the overall trend is still heading in the right direction, giving economists hope that businesses will step up hiring this quarter.[5] However, the latest consumer sentiment numbers show that lower-income Americans are worried about wages and economic growth even as higher-income consumers are staying upbeat about their prospects. This split in attitudes could spell trouble for the economy if low-income Americans become reluctant to spend.[6]
The week ahead is packed with economic events, including the June Federal Open Market Committee (FOMC) meeting, which concludes Wednesday. Analysts don't expect any surprises from the Fed, which has been taking pains to present an image of slow, predictable change in order to avoid spooking investors. However, analysts are hoping for more guidance about future interest rate increases as well as Fed economic projections, which will forecast Gross Domestic Product (GDP), unemployment, and inflation.[7]
ECONOMIC CALENDAR:
Monday: Empire State Mfg. Survey, Treasury International Capital, Industrial Production, Housing Market Index
Tuesday: Consumer Price Index, Housing Starts
Wednesday: EIA Petroleum Status Report, FOMC Meeting Announcement, FOMC Forecasts, Chair Press Conference 2:30pm
Thursday: Jobless Claims, Philadelphia Fed Survey
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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. Corporate bond performance is represented by the DJCBP. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly.
HEADLINES:
Detroit bond settlement reached. Bankruptcy court mediators announced that a settlement had been reached between the City of Detroit and bondholders over the treatment of unsecured general obligation bonds. Although final details have not been released, it is likely that bondholders will receive only a percentage of their principal, though bond insurers may make up some of the difference.[8]
Producer prices fall. The price paid for goods and services by U.S. producers fell for the second straight month, but economists still think inflation is firming up. Producer prices matter because higher prices generally lead to higher inflation as consumers are forced to pay more for goods and services.[9]
Retail sales growth less than expected. Though consumers spent more on retail goods for the fourth straight month in May, sales growth was slower than forecasted. This trend may mean that consumers will be less likely to increase their spending later this year.[10]
Would you pay more in taxes to fix your roads? The brutal winter has taken a toll on roads across America and federal maintenance dollars are coming up short. A recent AAA survey found that two-thirds of respondents would be willing to take a tax hike or pay more at the pump to improve roads.[11] |
"You can never plan the future by the past."
- Edmund Burke
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Enjoy the bounty of the season with these delicious French toast sandwiches.
Ingredients:
Serves 4
4 tablespoons unsalted butter
2 tablespoons light brown sugar
2 ripe yellow peaches, peeled and sliced into 1/2-inch pieces
2 tablespoons plus 3/4 cup heavy cream
8 slices day-old white bread, sourdough, brioche, or challah, sliced
3 large eggs
1/8 teaspoon ground cinnamon
Directions:
- Preheat the oven to 200� F.
- In a large, heavy-bottomed skillet, melt 2 tablespoons of butter over medium-low heat until it foams slightly. Add the brown sugar and stir quickly for 30 seconds.
- Add the sliced peaches, raising the heat to medium-high, and cook for about 3 minutes, stirring frequently. Add 2 tablespoons of heavy cream and stir, allowing it to cook for 2 minutes. Transfer the peach mixture to a bowl and set aside. Rinse the skillet.
- Place four slices of bread on a cutting board or workspace. Divide the cooked peaches evenly, leaving about one-half inch on all sides to avoid having the mixture spill out. Top each one with another piece of bread and press down gently.
- Beat the eggs and cinnamon until slightly frothy in a shallow bowl. Soak each peach sandwich in the mixture for 30 seconds per side.
- Melt 1 tablespoon of butter in the large skillet over medium heat. Fry sandwiches in batches until golden brown and lacy on each side. Add more butter to the pan as needed each time. Transfer each sandwich to a baking sheet and place in the warmed oven.
- Beat the heavy cream until peaks form. Cut each sandwich in half and serve with the whipped cream.
Recipe adapted from Susie Theodorou | RealSimple.com
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Do You Qualify for a Child or Dependent Care Credit?
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If you are paying for childcare or camp this summer, you may qualify for a federal tax credit. Here are a few important factors to consider:
- To qualify, you must be paying for a dependent or child under the age of 13.
- Your expenses must be work-related. This means that you are paying for care in order to work, study, seek work, or because you are physically unable to care for the child.
- You must have earned income in the year in which you claim the credit.
- Overnight camp costs or expenses related to summer school tutoring do not qualify.
- Total credits cannot exceed $3,000 for one qualifying child or $6,000 for two per year.
- Keep all receipts and records of your expenses, including the EIN or SSN of the childcare provider.
For more information about claiming credits for childcare throughout the year, speak to your tax advisor or see Publication 503, Child and Dependent Care Expenses, on IRS.gov. Tip courtesy of IRS.gov [12]
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Drop & Roll to Quit Slicing
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Many golfers try and steer the club to the ball from the top of the backswing. Even when your stance is balanced and your swing is dead on, this stiffness can cause you to slice. If this is happening to you, remember the fire drill from school: Let your arms drop as you turn your hips and shift your weight through the turn. Relax your arms through the swing, and the natural roll of your forearm will square the clubface before impact. Just relax and let gravity do the work.
Tip courtesy of Joe Buttitta, PGA | Golf Tips Mag [13]
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Toss Expired or Unused Medication
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Don't keep old or unused medications around the house since they may be easily confused for current prescriptions. Instead, dispose of them safely and legally by taking them to approved waste sites in your area or by following the disposal instructions on the back of the bottle.
Don't flush them down the sink or toilet since medications are difficult to filter out of local water supplies. You should also avoid throwing them in the trash where they can leach into the water table or be eaten by wildlife.
To find out about drug disposal sites, contact your city or county household trash and recycling service. You can find these numbers in the blue pages of your phone book or by looking online.
Tip courtesy of the Food and Drug Administration [14]
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If you or someone you love is planning a summer wedding, consider these ways to reduce the environmental impact of your nuptials:
- Send wedding invitations by email or use recycled paper stock. Ask guests to RSVP by phone or online to save money (and trees).
- Instead of splurging on exotic flowers flown in from afar, opt for organic arrangements grown locally. You could also consider decorating with potted plants that are native to your area and give them away to guests as wedding favors.
- Hold the wedding in a central location. While destination weddings are fun, they can really add up in terms of carbon footprint. If possible, choose a wedding locale that's easy to get to for friends and family.
Tip courtesy of The Nature Conservancy [15]
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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 Dow Jones Corporate Bond Index is a 96-bond index designed to represent the market performance, on a total-return basis, of investment-grade bonds issued by leading U.S. companies. Bonds are equally weighted by maturity cell, industry sector, and the overall index.
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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