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Markets Slump As Investors
Wait for Earnings
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WEEKLY UPDATE - July 15, 2014
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Stocks checked their advance last week as investors weighed earnings reports and waited for more news. Worries at one of Portugal's largest banks also contributed to mid-week losses. For the week, the S&P 500 lost 0.90%, the Dow fell 0.73%, and the Nasdaq dropped 1.57%.[1]
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Markets took a dive in the middle of the week on news that one of Portugal's largest banks may be in trouble. Investor concerns about a possible domino effect in the EU's financial system were soothed by statements from European Central Bank officials, who claimed that only one bank was affected by financial irregularities.[2] However, investors still used the opportunity to take some profits off the table.
Expectations about second quarter performance also set the tone for markets last week. While investors were willing to shrug off negative news in the first quarter because of the poor weather, their optimism has raised expectations for Q2 earnings and economic performance. So far, we haven't seen enough data to draw any conclusions, but total Q2 earnings for S&P 500 firms are expected to be up about 3.00%.[3]
Economic news was scarce last week, but weekly jobless claims fell to one of the lowest levels since the last recession. While weekly numbers are always volatile, the four-week moving average also dropped to the second-lowest reading since August 2007.[4] All told, it was a pretty good week for the labor market.
Earnings season kicks into high gear this week and reports will likely affect markets as investors discover whether their high hopes for second quarter performance bear out. Federal Reserve Chair Janet Yellen will also deliver her second semi-annual remarks on monetary policy before the House and Senate. [5] Though we don't expect any surprises, analysts will be digging into her comments for hints about when the Fed might raise interest rates.
ECONOMIC CALENDAR:
Tuesday: Retail Sales, Empire State Mfg. Survey, Import and Export Prices, Business Inventories, Janet Yellen Speaks 10:00 AM ET
Wednesday: PPI-FD, Treasury International Capital, Industrial Production, Housing Market Index, Janet Yellen Speaks 10:00 AM ET, EIA Petroleum Status Report, Beige Book
Thursday: Housing Starts, Jobless Claims, Philadelphia Fed Survey
Friday: 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. 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.
Wholesale inventories jump in May. Business inventories surged 0.50% from April as firms stocked up on autos, machinery, and lumber. Inventories are a key component of Gross Domestic Product (GDP) calculations and gains in this area indicate that businesses could be restocking to cope with rising demand.[6]
Percentage of uninsured Americans drops. A recent Gallup poll shows that only 13.40% of Americans lack health insurance, a significant drop from mid-2013, when 18.00% of Americans were uninsured. This could be good news for the healthcare sector, which might see increased demand from the newly insured.[7]
Retail sector in a funk? Several retail chains have blamed weak earnings on sluggish demand, indicating that lower- and middle-income consumers may not be reaping the benefits of a growing economy.[8]
U.S. refineries struggle to keep up with oil production boom. Rapid increases in oil extraction means America is in the upper strata of global oil producers. However, limited refinery capacity is keeping domestic gas prices high.[9]
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"Your time is limited, so don't waste it living someone else's life." - Steve Jobs |
 Enjoy a seasonal treat with this simple cake! |
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Ingredients:
Serves 8
1/2 cup (1 stick) plus 1 tablespoon unsalted butter, plus extra for the pan, at room temperature
4 firm, ripe plums, each cut into 8 wedges
1/4 cup plus 2/3 cup granulated sugar
1 cup all-purpose flour
3/4 teaspoon baking powder
1/4 teaspoon baking soda
1/4 teaspoon kosher salt
1 large egg
2/3 cup sour cream
1 teaspoon pure vanilla extract
Directions:
- Pre-heat your oven to 350� F. Grease an 8-inch cake pan and line with parchment paper.
- In a heavy-bottomed skillet, melt 1 tablespoon of the butter over medium heat and add the sliced plums and � cup sugar. Toss and cook 3 to 4 minutes until the plums soften and the juices become syrupy.
- Using a spoon or spatula, arrange the plums in an overlapping concentric circle on the bottom of the cake pan. Pour any remaining pan juice over the top.
- Whisk together flour, baking powder, baking soda, and salt in a small bowl.
- Using a handheld or counter-top mixer, beat the remaining butter and sugar until whipped. Mix in the sour cream, egg, and vanilla until fully combined. Gradually add in the dry mixture, beating only until just incorporated.
- Pour the cake batter over the plums without disturbing the bottom layer of fruit.
- Bake the cake about 50 to 55 minutes until the center is done and a toothpick comes out clean (or with only a few crumbs).
- Allow the cake to cool in the pan for one hour before carefully inverting onto a large plate.
- Serve warm or at room temperature with vanilla ice cream.
Recipe adapted from Sara Quessenberry | RealSimple.com
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Summer Wedding? Remember These Tax Tips
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If you or someone you love is getting married this summer, keep these important tax issues in mind. Taking care of them now can help reduce your stress at tax time.
Change names: IRS rules require that the names and Social Security numbers on your tax return match your Social Security Administration records. To formally change your name, file Form SS-5, Application for a Social Security Card, with the Social Security Administration.
Change tax withholding: A marital status change means you must give your employer a new Form W-4, Employee's Withholding Allowance Certificate. You should also meet with a tax professional to determine how your combined income affects your tax liabilities.
Change filing status: If you're married as of Dec. 31, that's your marital status for the whole year for tax purposes. You and your spouse can choose to file your federal income tax return either jointly or separately each year. You may want to ask a tax professional to run the numbers to see which status results in the lowest tax liability.
For more information about filing taxes as a newlywed, consult a tax professional in your area.
Tip courtesy of IRS.gov [10]
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Many golfers overlook the importance of great posture and get too comfortable over the ball. Slouching and arching the back makes it very hard to make consistent shots because you're not able to move athletically through the stroke. Ask a partner to watch your setup and make sure that you're keeping your back straight (but not rigidly straight) and flexing your knees slightly.
Tip courtesy of Doug Hammer, PGA | Golf Tips Mag [11]
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Keep Your Mind Sharp With Puzzles & Games
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Staying mentally sharp is critical for your mental, emotional, and physical health. A great way to make sure your problem-solving skills don't atrophy over time is to play mental games and challenge your mind's ability to absorb information. Try adding these games to your routine:
- Memorize the names of the people you meet every day along with an important feature.
- Consciously remember the names of characters in books you read. Before returning to a book, run through your mental cast of characters.
- Play Sudoku or crossword puzzles.
- Play bridge or another challenging social card game.
Tip courtesy of U.S. News [12]
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Save Water by Bringing Your Own Bottle
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Buying bottled water when you're on the go can seem like a small indulgence, and can drastically increase your personal water consumption. Each one-liter plastic bottle can take up to seven liters of water to produce, which can boost your annual water use by 577 gallons. This doesn't even account for the carbon or landfill waste produced by each bottle. Reduce water usage and waste by bringing along your own reusable water bottle.
Tip courtesy of Real Simple [13]
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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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