Will Interest Rates Go Up for the First Time in Nearly a Decade?
WEEKLY UPDATE - SEPTEMBER 14, 2015
In This Issue
Stocks rebounded during the holiday-shortened week as gains in overseas stock markets spurred buying activity, giving the Dow its best week since March. Despite the buying pressure, investors curbed their enthusiasm ahead of the Federal Reserve meeting next week. For the week, the S&P 500 gained 2.07%, the Dow grew 2.05%, and the NASDAQ gained 2.96%.[1]

China's Growth Sputters

Fresh data out of China showed that factory output missed expectations, supporting the view that China's economic growth may dip below 7% for the first time since the global recession. Infrastructure investment also fell, leading many experts to believe that China's central government may be forced to roll out new measures to boost economic growth.[2]

All Eyes on the Fed

This week, the eyes of the world will be on the Federal Reserve as the Open Market Committee votes on whether to raise interest rates for the first time in nearly a decade. The FOMC meets Wednesday and Thursday and will issue their official statement Thursday afternoon. The most recent Wall Street Journal survey of private economists shows that experts are split. Last month, a whopping 82% of economists thought that the Fed would pull the trigger this week; now, just 46% think the Fed will act this month.[3]



There are strong arguments to make on both sides of the issues. On the pro-rate-hike side are the opinions that too much easy money may fuel asset bubbles. Near-zero-rates also leave the Fed without ammunition in the event of another downturn.

On the hold-rates-steady side is the opinion that recent market volatility and ongoing concerns about global economic growth could spark another spate of selling if the Fed moves to raise rates now.[4]

Realistically, if the Fed moves this week to raise rates, they will likely announce a quarter-point raise to target interest rates in the 0.25%-0.50% range. How will markets react to a rate decision? It's hard to say. Investors might view an increase as a vote of confidence in the economy and rally. Alternately, sentiment might sour on fears of a new economic downturn. As always, we're keeping an eye on the situation and will update you as necessary.


ECONOMIC CALENDAR: 
Tuesday: Retail Sales, Empire State Mfg. Survey, Industrial Production, Business Inventories
Wednesday: Consumer Price Index, Housing Market Index, EIA Petroleum Status Report, Treasury International Capital
Thursday: Housing Starts, Jobless Claims, Philadelphia Fed Business Outlook Survey, FOMC Meeting Announcement, FOMC Forecasts, Fed Chair Press Conference




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:

Jobless claims drop by 6,000. The number of Americans filing new claims for unemployment benefits fell last week in the latest sign of health in the labor market. Though weekly claims are notoriously volatile, they have held at historic lows for months now.[5]

Consumer sentiment falls to one-year low. A gauge of Americans' opinions about the economy fell to the lowest level since last September. Americans are concerned about both current and future conditions.[6]

Import-export prices plummet. The prices of U.S. imports fell by the largest amount in seven months as falling gasoline prices and a strong dollar chipped away at import costs. Export prices also fell, possibly because of weaker global demand.[7]

Job openings hit new record high. July job openings hit a new record high of 5.29 million. The rate of voluntary job separations ('quits'), held steady, indicating that Americans feel confident enough to leave their jobs in search of greener pastures.[8]




"Life is about making an impact, not making an income." 

 - Kevin Kruse

Overnight Breakfast Risotto
Take the hassle out of weekday breakfasts by starting this recipe the night before.

Makes 8 cups

Ingredients:

4 tablespoons unsalted butter, room temperature

1 cups Arborio rice

2 medium bananas, lightly mashed

⅔ cup dark brown sugar

teaspoon ground allspice

teaspoon coarse salt

4 cups unsweetened almond milk

2 teaspoons vanilla extract

cup half and half, whole milk, or almond milk

Chopped walnuts, for garnish


Directions:
  1. Heat a 6-quart slow cooker on high. Add the butter and Arborio rice, stirring until the butter is melted and the rice thoroughly coated.
  2. Add the mashed bananas, brown sugar, allspice, and salt. Mix until combined. Switch the temperature setting to low.
  3. Pour in the almond milk and vanilla extract. Cover the cooker and allow the risotto to cook for 3 hours. Switch the temperature setting to warm until ready to serve.
  4. Just before serving, stir in the half and half or milk.
  5. Serve the risotto topped with chopped walnuts and additional brown sugar.
Chef's Tip: Swap the bananas for peaches or another fruit and add cinnamon, nutmeg, or other spices for a different flavor profile.
            

Recipe adapted from Heather Meldrom | RealSimple.com[9]

 

 


 

 

Deduct Qualifying Moving Expenses

Moving to a new home this year? You may be able to deduct the cost of the move on your tax return if you move to start a new job or because of a job-related transfer. In order to qualify, your move must meet three requirements:
  1. Your move is closely related to the start of work. Generally, you may deduct moving expenses that occur within one year of the start date of a new job, though other requirements may apply.
  2. Your new job location must be at least 50 miles further from your old home than your prior home. For example, if your old job was three miles away from your home, your new job must be at least 53 miles away.
  3. You must work full-time at your new job for at least 39 weeks the first year after the move, even if you are self-employed. You must also work full-time for at least 78 weeks in the first two years of work at the new job site. You can still claim the deduction if you expect to be able to meet this requirement.
For more information on job-related moving deductions, consult a qualified tax specialist or see Publication 521, Moving Expenses.

Tip courtesy of IRS.gov[10]
Dig in for Better Bunker Shots

A bunker shot doesn't have to be threatening. Many amateur golfers struggle to get aggressive enough with their sand shots. Here's a drill that will make you more aggressive by training you to hear the sound of a great bunker shot.

To get started, dig in with the bottom of your sand wedge about an inch behind your ball. You want to get fairly deep in the sand - about two inches. Then accelerate and "spank" the sand, moving through the ball. You should hear that "thumping" sound of a great bunker shot. Work through the drill multiple times so that you internalize the aggressive swing and acceleration through the ball that you need to get it up and out of the sand.

Tip courtesy of Zach Allen, PGA | Golf Tips Mag[11]
Make Your Morning Healthier

Surveys show that many Americans are stressed before they even begin their day. Start your day off right with these healthy tips:
  • Skip the morning news if you find it gets your heart rate going.
  • Pump your breakfast full of protein. A protein-heavy breakfast helps lower body fat and blood sugar.
  • Get plenty of light. Get your circadian rhythm going by opening the shades and getting plenty of light exposure.
  • Get in some quick meditation. Even just a few minutes of mindfulness can help boost the areas of your brain responsible for memory and stress.
  • Add energy with positive tunes. Music can help you get and stay cheerful.
Tip courtesy of AARP[12]
Green Your Heating Bill

As the weather cools, take the time to make your home more energy efficient to lower your heating bills and your carbon footprint:
  • Add draft guards to doors.
  • Caulk around drafty window frames.
  • Once you know you won't be opening windows, cover drafty windows with plastic to promote heat retention.
  • Replace furnace filters and check furnace function before the first cold snap, when HVAC techs are busy.
  • Use a programmable thermostat to lower the heat at night and when you're not home.
Tip courtesy of How Stuff Works[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. 

 

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