The Miller Financial Group
Markets Shake Off 
Global Worries 
WEEKLY UPDATE - July 21, 2014
In This Issue
Despite a tumultuous week that had it all - earnings, volatility, geopolitical shock, and monetary policy news - markets were still able to chalk up a win. For the week, the S&P 500 gained 0.54%, the Dow grew 0.90%, and the Nasdaq added 0.38%.[1]
Federal Reserve chair Janet Yellen gave semi-annual speeches on monetary policy before the House and Senate. She confirmed that quantitative easing would end after the October Federal Open Market Committee meeting if the economic outlook continues to look good. However, she dodged a key question about the timing of interest increases, indicating that the Fed is not yet ready to commit to a formal plan. Yellen cautioned that economic signals are somewhat mixed and predictions are never certain; however, she believes that underlying economic trends are largely positive.[2]

International events took center stage when a civilian airplane carrying several hundred passengers was shot down over Ukraine, allegedly by pro-Russian separatists with possible military support from Russia. International condemnation of the shocking event was swift, but it's hard to know what will happen next. On the one hand, international outrage over the civilian deaths may ratchet up the sanctions on Russia.[3] On the other hand, the importance of Russian trade ties with Europe argue for a more cautious approach, given how fragile the EU's economy is right now. In the Middle East, the Israeli Defense Force moved ground troops into Gaza in an effort to quell the rocket attacks from Hamas. Despite international diplomatic efforts, hostilities between the two sides are escalating, fueling fears about instability in the Middle East.[4]

These global worries caused stocks to dive on Thursday, but better-than-expected earnings boosted investor sentiment, pushing stocks higher on Friday. So far, second quarter earnings are off to a good start, though it's too soon to draw conclusions about the whole season. Thus far, we've heard from 45 S&P 500 companies, mostly in the Finance sector; overall, earnings are up 5.2% from Q2 2013, on 2.8% higher revenues.[5] Again, while we can't use these data points to predict earnings results from other companies, it's a sign that investors' optimism about the second quarter might be rewarded.

This week, earnings data and news from Ukraine and Israel will likely dominate market headlines, potentially stoking more volatility. On the earnings calendar this week will be reports from heavyweights like AT&T (ATT.CL), Microsoft (MSFT), Starbucks (SBUX), and Apple (AAPL).

ECONOMIC CALENDAR:

Tuesday: Consumer Price Index, Existing Home Sales
Wednesday: EIA Petroleum Status Report
Thursday: Jobless Claims, New Home Sales
Friday: Durable Goods Orders




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:

Retail sales disappoint. June retail sales ticked up just 0.2%, held back by drops in restaurant, auto, and building sales. The anemic numbers suggest that consumers are still cautious about opening their wallets, which may hold back spending this year.[6] 

Jobless claims fall unexpectedly. The number of Americans filing new claims dropped more than expected last week, showing that the labor market continues to improve. The number of people receiving continuing unemployment support is also at a seven-year low.[7]

Consumer sentiment dips. A preliminary reading of July consumer sentiment showed that consumer optimism about the future is faltering. While attitudes about current conditions are stable, low expectations may curb future spending.[8]

Home builder optimism surges. A key measure of home builder sentiment jumped in July, indicating that the nation's builders are feeling more confident about their prospects. Respondents think improvements in the labor market and low housing supply will boost demand.[9]



Quote Of The Week
Quote Of The Week
Fountain Pen

"Winning isn't everything, but wanting to win is."  

- Vince Lombardi 

 

Recipe Of The Week
Recipe Of The Week
Fork and Knife

Summer Vegetable Linguine

Take advantage of fresh summer produce with this simple pasta.

Ingredients:

 

Serves 4

1 pound linguine
cup chopped walnuts
3 tablespoons olive oil
2 cups fresh corn (from 2 ears)
2 cloves garlic, sliced
Kosher salt and black pepper
2 pints cherry or grape tomatoes, halved
2 small zucchini (about 1 pound), cut into thin ribbons with a vegetable peeler
2 tablespoons fresh oregano leaves
4 ounces goat cheese, crumbled
 

Directions:

  1. Preheat oven to 350 F.
  2. Boil the pasta in salted water according to the directions on the back of the package, drain, and return to the pot off the heat. Reserve cup of the water for later.
  3. Toast chopped walnuts on a baking sheet about 8-10 minutes or until fragrant. Watch carefully to prevent burning.
  4. Heat olive oil in a large, heavy-bottomed skillet. Add the garlic, corn, one pinch salt, and one pinch black pepper. Cook, stirring occasionally, just until the corn is tender.
  5. Return the pasta pot to medium heat. Add the cooked corn, fresh tomatoes, zucchini, and cup of the pasta water. Cook, tossing the ingredients for several minutes, until the sauce coats the pasta. Add more cooking liquid if needed to thin the mixture.
  6. Divide the pasta between four plates and serve topped with oregano, toasted walnuts, and goat cheese.

Recipe adapted from Charlyne Mattox | RealSimple.com  

 

 

Tax Tips
Tax Tips
Document
Tax Tips for Military Families 

 

If you or someone in your family is a member of the armed forces, you may be eligible for some important tax benefits. According to the IRS, military families may benefit from:

  • Automatic deadline extensions if you served in a combat zone or meet other requirements.
  • Combat pay exclusions. Some forms of combat pay are not subject to income taxes.
  • Expense deductions for moving, transitioning to civilian life, and reservist travel.
  • Free tax help on military bases.

For more information about filing taxes as a member of the armed forces, consult a tax professional in your area or refer to Publication 3, "Armed Forces' Tax Guide."  

 

Tip courtesy of IRS.gov[10]   
 
Golf Tip
Golf Tip
Golfer
Quit Topping the Ball

 

Topping the ball, or making contact with the top hemisphere of the ball, can cause weak, unpredictable shots. Trying to lift or scoop the ball at impact often causes the problem. If you're struggling with this issue, practice "Breaking the Tee" with the following drill: 


Set a tee deeply in the ground so that the top sits just above the ground. Set up to the ball normally and try to swing so that you snap the tee out of the ground. To do this successfully, you'll need to shift your weight forward and hit with a downward blow. After you successfully break the tee and send it flying a few times, practice the same drill with a golf ball on the tee. 

 

Tip courtesy of Barry Goldstein, Golf Tips Mag[11]

 

Healthy Lifestyle
Healthy Lifestyle
Medical Cross
Reduce Signs of Aging With Sunscreen

 

We all know that using sunscreen at the beach is important for protecting against the risk of skin cancer. However, did you know that daily use can reduce the impact of aging on your skin? A 2013 Australian study found that participants who used a broad spectrum sunscreen daily had 24% less skin aging (wrinkling, coarser skin, and age spots) than those who only used one occasionally. If you'd like to add sunscreen to your daily regimen, find one that protects against both UVA and UVB rays and is rated between SPF 30 and SPF 50.


Tip courtesy of AARP
[12]

 

Green Living
Green Living
Leaf
Make Your Refrigerator More Efficient

 

Your refrigerator may be the most energy-intensive appliance in your entire house. Use these simple tips to lower your energy bill and reduce your carbon footprint:

  • Keep your fridge between 38-42F (3-5C) and your freezer at 0-5F (-17 to -15C).
  • Try and reduce the number of times you open your fridge door throughout the day and avoid leaving it open.
  • Don't situate the refrigerator in a warm spot in your kitchen (one that's near a heating vent or sunny window).
  • Clean the condenser coils regularly, especially if you have pets.
  • Check your door gasket for accumulated food or debris that may be keeping your door from sealing properly.
Tip courtesy of Greenpeace[13]

 

 

Share the Wealth of Knowledge!

 

  Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!

 



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.

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