Tuesday, August 2, 2016

Market Commentary for the Week of August 1, 2016

Stocks broke their four-week winning streak, closing mixed after the release of a surprisingly low estimate of second-quarter economic growth. For the week, the S&P 500 lost 0.07% and the MSCI EAFE (International Developed Stocks) added 2.36%.[i] Emerging Market stocks continued their winning ways, now up 11.77% for 2016 through July.
 


 
 
 
 
 
 

 
 
 
The preliminary estimate of Q2 Gross Domestic Product (GDP) growth showed that the economy grew a paltry 1.2% last quarter versus the 2.6% growth expected.[ii] Investors were understandably disappointed as they had hoped for a resurgence after a slow first quarter. Professional economists were also surprised. The New York Fed had forecasted GDP growth of 2.1% and the Atlanta Fed had predicted 2.3% growth.[iii]

During last week’s Federal Open Market Committee meeting, the Federal Reserve’s monetary policy makers voted to hold rates steady, surprising no one. Citing recent economic data, the central bank said that “near-term risks to the economic outlook have diminished,” setting the stage for the next rate hike.[v] 

Will rates increase in September? December? Or will the Fed wait until 2017? We don’t know. Wall Street bets on future rate hikes suggest that most traders don’t think the Fed will move until December if they don’t wait until 2017.
[vi]

On the positive side, the Fed seems confident enough in economic growth to cut back on stimulus. On the negative side, speculation around the timing of future rate hikes will continue to be a major market theme this year and may stoke additional volatility.

HEADLINES: 

Weekly jobless claims rise. The number of Americans filing claims for new unemployment benefits rose by 14,000, but the underlying trend still shows strength in the labor market.[vii]

Consumer sentiment drops in July. A measure of how consumers feel about the U.S. economy slipped as worries about the Brexit and the presidential election weighed on Americans.
[viii]

June new home sales surge. Sales of new single-family homes rose to the highest levels in nearly 8-1/2 years. Sales were up 25.4% over June 2015, indicating that the housing market may be gaining momentum.
[ix]

Durable goods plunge in June. Orders for long-lasting manufactured goods dropped, indicating weak overseas demand is affecting U.S. factories. Economists had predicted a 1.4% decline over June, but orders for goods like aircraft, appliances, and machinery actually fell 4.0%.
[x]

To Your Prosperity,

Kevin Kroskey, CFP®, MBA
 

This article adapted with permission from Platinum Advisor Marketing Strategies, LLC
 
[i] http://finance.yahoo.com/quote/%5EGSPC/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d http://finance.yahoo.com/quote/%5EDJI/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d http://finance.yahoo.com/quote/%5EIXIC/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d https://www.msci.com/end-of-day-data-search
[ii] http://www.cnbc.com/2016/07/29/us-advance-q2-2016-gross-domestic-product.html
[iii] https://www.newyorkfed.org/medialibrary/media/research/policy/nowcast/nowcast_2016_0729.pdf?la=en https://ww.frbatlanta.org/-/media/Documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf
[iv] http://www.cnbc.com/2016/07/29/us-advance-q2-2016-gross-domestic-product.html
[v] http://www.bloomberg.com/news/articles/2016-07-27/fed-begins-crawl-toward-rate-hike-as-near-term-risks-diminish
[vi] http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html [Accessed July 31, 2016]
[vii] http://www.foxbusiness.com/markets/2016/07/28/weekly-jobless-claims-rise-by-14000.html
[viii] http://www.foxbusiness.com/markets/2016/07/29/consumer-sentiment-slips-in-july.html
[ix] http://www.foxbusiness.com/markets/2016/07/26/june-new-home-sales-jump-3-5.html
[x] http://www.foxbusiness.com/markets/2016/07/27/june-durable-goods-orders-plunge.html 

Market Commentary for the Week of August 1, 2016

Stocks broke their four-week winning streak, closing mixed after the release of a surprisingly low estimate of second-quarter economic growth. For the week, the S&P 500 lost 0.07% and the MSCI EAFE (International Developed Stocks) added 2.36%.[i] Emerging Market stocks continued their winning ways, now up 11.77% for 2016 through July.
 
 
 
 
 
 
 

 
 
 
The preliminary estimate of Q2 Gross Domestic Product (GDP) growth showed that the economy grew a paltry 1.2% last quarter versus the 2.6% growth expected.[ii] Investors were understandably disappointed as they had hoped for a resurgence after a slow first quarter. Professional economists were also surprised. The New York Fed had forecasted GDP growth of 2.1% and the Atlanta Fed had predicted 2.3% growth.[iii]

During last week’s Federal Open Market Committee meeting, the Federal Reserve’s monetary policy makers voted to hold rates steady, surprising no one. Citing recent economic data, the central bank said that “near-term risks to the economic outlook have diminished,” setting the stage for the next rate hike.[v] 

Will rates increase in September? December? Or will the Fed wait until 2017? We don’t know. Wall Street bets on future rate hikes suggest that most traders don’t think the Fed will move until December if they don’t wait until 2017.
[vi]

On the positive side, the Fed seems confident enough in economic growth to cut back on stimulus. On the negative side, speculation around the timing of future rate hikes will continue to be a major market theme this year and may stoke additional volatility.

HEADLINES: 

Weekly jobless claims rise. The number of Americans filing claims for new unemployment benefits rose by 14,000, but the underlying trend still shows strength in the labor market.[vii]

Consumer sentiment drops in July. A measure of how consumers feel about the U.S. economy slipped as worries about the Brexit and the presidential election weighed on Americans.
[viii]

June new home sales surge. Sales of new single-family homes rose to the highest levels in nearly 8-1/2 years. Sales were up 25.4% over June 2015, indicating that the housing market may be gaining momentum.
[ix]

Durable goods plunge in June. Orders for long-lasting manufactured goods dropped, indicating weak overseas demand is affecting U.S. factories. Economists had predicted a 1.4% decline over June, but orders for goods like aircraft, appliances, and machinery actually fell 4.0%.
[x]

To Your Prosperity,

Kevin Kroskey, CFP®, MBA
 

This article adapted with permission from Platinum Advisor Marketing Strategies, LLC
 
[i] http://finance.yahoo.com/quote/%5EGSPC/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d http://finance.yahoo.com/quote/%5EDJI/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d http://finance.yahoo.com/quote/%5EIXIC/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d https://www.msci.com/end-of-day-data-search
[ii] http://www.cnbc.com/2016/07/29/us-advance-q2-2016-gross-domestic-product.html
[iii] https://www.newyorkfed.org/medialibrary/media/research/policy/nowcast/nowcast_2016_0729.pdf?la=en https://ww.frbatlanta.org/-/media/Documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf
[iv] http://www.cnbc.com/2016/07/29/us-advance-q2-2016-gross-domestic-product.html
[v] http://www.bloomberg.com/news/articles/2016-07-27/fed-begins-crawl-toward-rate-hike-as-near-term-risks-diminish
[vi] http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html [Accessed July 31, 2016]
[vii] http://www.foxbusiness.com/markets/2016/07/28/weekly-jobless-claims-rise-by-14000.html
[viii] http://www.foxbusiness.com/markets/2016/07/29/consumer-sentiment-slips-in-july.html
[ix] http://www.foxbusiness.com/markets/2016/07/26/june-new-home-sales-jump-3-5.html
[x] http://www.foxbusiness.com/markets/2016/07/27/june-durable-goods-orders-plunge.html 

Market Commentary for the Week of August 1, 2016

Stocks broke their four-week winning streak, closing mixed after the release of a surprisingly low estimate of second-quarter economic growth. For the week, the S&P 500 lost 0.07% and the MSCI EAFE (International Developed Stocks) added 2.36%.[i] Emerging Market stocks continued their winning ways, now up 11.77% for 2016 through July.
 
 
 
 
 
 
 

 
 
 
The preliminary estimate of Q2 Gross Domestic Product (GDP) growth showed that the economy grew a paltry 1.2% last quarter versus the 2.6% growth expected.[ii] Investors were understandably disappointed as they had hoped for a resurgence after a slow first quarter. Professional economists were also surprised. The New York Fed had forecasted GDP growth of 2.1% and the Atlanta Fed had predicted 2.3% growth.[iii]

During last week’s Federal Open Market Committee meeting, the Federal Reserve’s monetary policy makers voted to hold rates steady, surprising no one. Citing recent economic data, the central bank said that “near-term risks to the economic outlook have diminished,” setting the stage for the next rate hike.[v] 

Will rates increase in September? December? Or will the Fed wait until 2017? We don’t know. Wall Street bets on future rate hikes suggest that most traders don’t think the Fed will move until December if they don’t wait until 2017.
[vi]

On the positive side, the Fed seems confident enough in economic growth to cut back on stimulus. On the negative side, speculation around the timing of future rate hikes will continue to be a major market theme this year and may stoke additional volatility.HEADLINES: 

Weekly jobless claims rise. The number of Americans filing claims for new unemployment benefits rose by 14,000, but the underlying trend still shows strength in the labor market.[vii]

Consumer sentiment drops in July. A measure of how consumers feel about the U.S. economy slipped as worries about the Brexit and the presidential election weighed on Americans.
[viii]

June new home sales surge. Sales of new single-family homes rose to the highest levels in nearly 8-1/2 years. Sales were up 25.4% over June 2015, indicating that the housing market may be gaining momentum.
[ix]

Durable goods plunge in June. Orders for long-lasting manufactured goods dropped, indicating weak overseas demand is affecting U.S. factories. Economists had predicted a 1.4% decline over June, but orders for goods like aircraft, appliances, and machinery actually fell 4.0%.
[x]

To Your Prosperity,

Kevin Kroskey, CFP®, MBA
 

This article adapted with permission from Platinum Advisor Marketing Strategies, LLC
 
[i] http://finance.yahoo.com/quote/%5EGSPC/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d http://finance.yahoo.com/quote/%5EDJI/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d http://finance.yahoo.com/quote/%5EIXIC/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d https://www.msci.com/end-of-day-data-search
[ii] http://www.cnbc.com/2016/07/29/us-advance-q2-2016-gross-domestic-product.html
[iii] https://www.newyorkfed.org/medialibrary/media/research/policy/nowcast/nowcast_2016_0729.pdf?la=en https://ww.frbatlanta.org/-/media/Documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf
[iv] http://www.cnbc.com/2016/07/29/us-advance-q2-2016-gross-domestic-product.html
[v] http://www.bloomberg.com/news/articles/2016-07-27/fed-begins-crawl-toward-rate-hike-as-near-term-risks-diminish
[vi] http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html [Accessed July 31, 2016]
[vii] http://www.foxbusiness.com/markets/2016/07/28/weekly-jobless-claims-rise-by-14000.html
[viii] http://www.foxbusiness.com/markets/2016/07/29/consumer-sentiment-slips-in-july.html
[ix] http://www.foxbusiness.com/markets/2016/07/26/june-new-home-sales-jump-3-5.html
[x] http://www.foxbusiness.com/markets/2016/07/27/june-durable-goods-orders-plunge.html 

Market Commentary for the Week of August 1, 2016

Stocks broke their four-week winning streak, closing mixed after the release of a surprisingly low estimate of second-quarter economic growth. For the week, the S&P 500 lost 0.07% and the MSCI EAFE (International Developed Stocks) added 2.36%.[i] Emerging Market stocks continued their winning ways, now up 11.77% for 2016 through July.
 
 
 
 
 
 
 
 
 
 
The preliminary estimate of Q2 Gross Domestic Product (GDP) growth showed that the economy grew a paltry 1.2% last quarter versus the 2.6% growth expected.[ii] Investors were understandably disappointed as they had hoped for a resurgence after a slow first quarter. Professional economists were also surprised. The New York Fed had forecasted GDP growth of 2.1% and the Atlanta Fed had predicted 2.3% growth.[iii]

During last week’s Federal Open Market Committee meeting, the Federal Reserve’s monetary policy makers voted to hold rates steady, surprising no one. Citing recent economic data, the central bank said that “near-term risks to the economic outlook have diminished,” setting the stage for the next rate hike.[v] 

Will rates increase in September? December? Or will the Fed wait until 2017? We don’t know. Wall Street bets on future rate hikes suggest that most traders don’t think the Fed will move until December if they don’t wait until 2017.
[vi]

On the positive side, the Fed seems confident enough in economic growth to cut back on stimulus. On the negative side, speculation around the timing of future rate hikes will continue to be a major market theme this year and may stoke additional volatility.
HEADLINES: 

Weekly jobless claims rise. The number of Americans filing claims for new unemployment benefits rose by 14,000, but the underlying trend still shows strength in the labor market.[vii]

Consumer sentiment drops in July. A measure of how consumers feel about the U.S. economy slipped as worries about the Brexit and the presidential election weighed on Americans.
[viii]

June new home sales surge. Sales of new single-family homes rose to the highest levels in nearly 8-1/2 years. Sales were up 25.4% over June 2015, indicating that the housing market may be gaining momentum.
[ix]

Durable goods plunge in June. Orders for long-lasting manufactured goods dropped, indicating weak overseas demand is affecting U.S. factories. Economists had predicted a 1.4% decline over June, but orders for goods like aircraft, appliances, and machinery actually fell 4.0%.
[x]

To Your Prosperity,

Kevin Kroskey, CFP®, MBA
 

This article adapted with permission from Platinum Advisor Marketing Strategies, LLC
 
[i] http://finance.yahoo.com/quote/%5EGSPC/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d http://finance.yahoo.com/quote/%5EDJI/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d http://finance.yahoo.com/quote/%5EIXIC/history?period1=1469160000&period2=1469764800&interval=1d&filter=history&frequency=1d https://www.msci.com/end-of-day-data-search
[ii] http://www.cnbc.com/2016/07/29/us-advance-q2-2016-gross-domestic-product.html
[iii] https://www.newyorkfed.org/medialibrary/media/research/policy/nowcast/nowcast_2016_0729.pdf?la=en https://ww.frbatlanta.org/-/media/Documents/cqer/researchcq/gdpnow/RealGDPTrackingSlides.pdf
[iv] http://www.cnbc.com/2016/07/29/us-advance-q2-2016-gross-domestic-product.html
[v] http://www.bloomberg.com/news/articles/2016-07-27/fed-begins-crawl-toward-rate-hike-as-near-term-risks-diminish
[vi] http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html [Accessed July 31, 2016]
[vii] http://www.foxbusiness.com/markets/2016/07/28/weekly-jobless-claims-rise-by-14000.html
[viii] http://www.foxbusiness.com/markets/2016/07/29/consumer-sentiment-slips-in-july.html
[ix] http://www.foxbusiness.com/markets/2016/07/26/june-new-home-sales-jump-3-5.html
[x] http://www.foxbusiness.com/markets/2016/07/27/june-durable-goods-orders-plunge.html 

Tuesday, July 5, 2016

2016 Second Quarter Report: The Shadow of Brexit

It certainly feels like we are in a bear market with starting the year off so terribly, now the surprising “Brexit” vote in the UK, and increased volatility across the board. Therefore, it may come as a surprise that the second quarter of 2016 and year-to-date market indices generally show positive total returns. 
 
When you look at the global markets, you realize that the U.S. has been a haven of stability in a very messy world. The S&P 500 was up 2.46% over the second quarter and 3.84% on the year. 
 
Surprisingly to some, emerging markets stocks of less developed countries, as represented by the MSCI EM index, has held up quite well, returning 4% in the month of June and 6.41% YTD. 
 
The broad-based MSCI EAFE index of developed foreign economies – about half of which is in Euro-area markets – lost -3.36% in June and -4.42% YTD. 
 
Meanwhile, interest rates have trended lower, once again confounding many prognosticators who have been expecting significant rate rises for more than half a decade now. The phrase ‘lower for longer’ is now being commonly used to describe a likely continuing period of low rates. 
 
The recent slide in rates has been positive for bond returns in 2016 with the Barclay’s U.S. Aggregate Bond Index returning 5.31%. Yet, as prices increased, yields have lowered damping the expected returns for bond assets going forward. U.S. Treasury yields are stuck near the bottom of historical rates. Going out to ten years, you can get a 1.47% yield and a whopping 2.3% for thirty years. Compared with rates abroad, these yields are positively generous. If you are buying the German Bund 10-year government securities, you are receiving a -0.13% yield. The 5-year yield is actually worse: -0.57%. Japanese government bonds are also yielding -0.3% (2-year) to -0.23% (10-year).
 
Looking over the other investment categories, the decline in interest rates was very positive for real estate, which has been a haven in our low-yielding world. Commodities, as measured by the S&P GSCI index, gained 12.67% in the second quarter, giving the index a 9.86% gain for the year so far. The biggest mover, unsurprisingly, is Brent Crude Oil, which has risen more than 15% in price over the quarter.
 
On the first day of July, the S&P 500 index was higher than before the Brexit vote took investors by surprise, which suggests that, yet again, the people who let panic make their decisions lost money while those who kept their heads did better. There will be plenty of other opportunities for panic in a future where terrorism, a continuing mess in the Middle East, a refugee crisis in Europe and premature announcements of the demise of the European Union will deflect attention away from what is actually a decent economic story in the U.S. 
 
How decent? The American economy is on track to grow at a 2.0% rate this year, which is hardly dramatic, but it is sustainable and not likely to overheat different sectors and lead to a recession. Manufacturing activity is expected to grow 2.6% for the year based on the numbers so far, and the unemployment rate has fallen to 4.7%, which is actually below the Federal Reserve target. Inflation is also low: running around 1.4% this year. The unemployment statistics are almost certainly misleading in the sense that many people are underemployed, and a sizable number of working-age men are no longer participating in the labor force, but for many Americans, there is work if you want it. Historically low oil prices and high domestic production have lowered the cost of doing business and the cost of living across the American economic landscape. 
 
Despite all this good news, the market is struggling to keep its head above water this year and is not threatening the record highs set in May of last year.  
 
Questions remain. The biggest one in many peoples’ minds is: will the European Union break up now that its second-largest economy has voted to exit. There is already renewed talk of a Grexit, along with clever names like the dePartugal, the Czechout, the Big Finnish and even discussion about Texas leaving the U.S. With active political movements in at least a dozen Eurozone countries agitating for an exit, it is possible that someday we will view the UK as the first domino.

A recent report by Thomas Friedman of Geopolitical Futures suggests that the EU, at the very least, is going to have to reform itself, and the vote in Britain could be the wake-up call it needs to make structural changes. The Eurozone has been struggling economically since the common currency was adopted. It is still dealing with the Greek sovereign debt crisis, a potential banking crisis in Italy, economic troubles in Finland, political issues in Poland and, in general, a huge wealth disparity between its northern and southern members. 
 
Friedman thinks the UK will be just fine, because Europe needs it to be a strong trading partner. Britain is Germany’s third-largest export market and France’s fifth largest. Would it be wise for those countries to stop selling to Britain or impose tariffs on British exports? More broadly, with the political turmoil in the UK, is it possible that there will be a re-vote, particularly if the European Union decides to make reforms that result in a less-stifling regulatory regime.
 
You will continue to see dire headlines, if not about Brexit or the Middle East, then about China’s debt situation and the Fed either deciding or not deciding to raise rates in the U.S. economy. Oil prices are going to bounce around unpredictably. Another unforeseen crisis du jour may appear as well. 
 
The remarkable thing to notice is that with all the wild headlines we have experienced so far, plus the worst start to the year in U.S. market history, the markets are up slightly here in the U.S., and the economy is still growing. 
 
You should expect continued volatility and will need to stay disciplined.

To Your Prosperity,

Kevin Kroskey, CFP®, MBA
 

This article adapted with permission from BobVeres.com.
Sources :
Wilshire index data.  http://www.wilshire.com/Indexes/calculator/
Russell index data: http://indexcalculator.russell.com/
S&P index data: http://www.standardandpoors.com/indices/sp-500/en/us/?indexId=spusa-500-usduf--p-us-l--
Nasdaq index data: http://quicktake.morningstar.com/Index/IndexCharts.aspx?Symbol=COMP
International indices: http://www.mscibarra.com/products/indices/international_equity_indices/performance.html
Commodities index data: http://us.spindices.com/index-family/commodities/sp-gsci
Treasury market rates: http://www.bloomberg.com/markets/rates-bonds/government-bonds/us/
Aggregate corporate bond rates: https://indices.barcap.com/show?url=Benchmark_Indices/Aggregate/Bond_Indices
Aggregate corporate bond rates: http://www.bloomberg.com/markets/rates-bonds/corporate-bonds/
http://useconomy.about.com/od/criticalssues/a/US-Economic-Outlook.htm
http://www.marketwatch.com/story/first-quarter-us-gdp-raised-to-11-2016-06-28?siteid=bulletrss

Tuesday, June 7, 2016

Market Commentary for the Week of June 6, 2016

What Did the May Jobs Report Show Us?

Stocks closed the holiday-shortened week mixed, with some sectors losing ground while others gained after a disappointing May jobs report signaled that the economy may not be strong enough for the Federal Reserve to raise rates this month. For the week, the S&P 500 ended flat, the Dow lost 0.37%, the NASDAQ increased 0.18%, and the MSCI EAFE added 0.13%.
[1]



On Friday, we got a look at how the labor market did in May. Analysts looked to the report to see whether the labor market would give the Fed the ammunition it needed to move at the June meeting. Here are a few things we took away:

Job growth disappoints…but it has happened before

The economy created just 38,000 new jobs last month, the worst showing since September 2010. The number of new jobs sharply missed expectations, which called for around 160,000 new jobs.
[2] However, seasonal factors, like a massive Verizon worker strike, which took 34,000 workers out of the count, were at play and may have affected hiring numbers.[3]

The labor market has suffered temporary setbacks before. For example, in December 2013, the economy added a paltry 45,000 jobs; four months later, the economy gained 310,000 jobs. In March 2015, the labor market added just 84,000 jobs; in July, 277,000 new jobs were created.[4]

 

 Labor market trends may slow job creation

The jobs report showed that the unemployment rate fell to 4.7%, the lowest since November 2007. However, much of the decrease occurred when jobseekers dropped out of the job search. As we approach full employment (some may argue that we’re already there), the effects of having fewer jobseekers begin to be felt by employers.

Employers who are hiring may struggle to find qualified candidates due to skill mismatches, a problem that’s likely to continue to affect certain industries.
[5] These issues affect job creation in a “mature” labor market recovery.

Can the slower pace of hiring support the consumer spending the economy needs to grow? Perhaps, if wages continue to grow. Wages were up 2.5% in May as compared to a year ago, which is a better pace of growth than we have seen.[8] Another measure of wage growth favored by economists, the Employment Cost Index (ECI), shows that wages were up 2.4% (year-over-year) in the first quarter.[9] A third measure calculated by the Atlanta Fed shows a rosier 3.4% annual increase in hourly wages in April.[10] You can bet that the Fed will be looking at all three measures when deciding if wage growth is strong enough to support consumer spending this year.

The Fed may not raise rates in June

The weak report also may have reduced the odds of a June interest hike by the Federal Reserve, though some analysts think that other positive economic indicators might give the Fed the confidence to act. Right now, the market is pretty convinced the Fed won’t raise rates in June; one measure shows that the current market probability of a June hike is just 3.8%, while the probability of a July hike is 31.3%.
[11]

Our view

Overall, does the weak May jobs report signal weakness in the U.S. economy?

Perhaps, though it’s far to soon to sound the alarm. Since other economic indicators like Gross Domestic Product growth, housing market activity, and personal spending all point to positive growth, it’s not likely that one weak report spells disaster for the economy.
[12] Rather than fixate on a single piece of data, it’s more important to look at overall economic trends.

Looking ahead, we’re expecting investors to take stock of the dismal jobs report and perhaps hit the brakes on the three-month rally we’ve experienced. Summer tends to be a slow season for markets as many traders take time off and stocks can overreact to headlines. A small pullback in the weeks to come wouldn’t surprise us, though traders could also shrug off the report. While weak data always sidelines some investors, long-term investors should focus more on their goals and less on short-term market swings. As always, we’ll keep you
updated.

ECONOMIC CALENDAR:

Monday: Janet Yellen Speaks 12:30 PM ET, Janet Yellen Speaks 2:00 PM ET
Tuesday: Productivity and Costs
Wednesday: JOLTS, EIA Petroleum Status Report
Thursday: Jobless Claims
Friday: Consumer Sentiment, Treasury Budget

HEADLINES:

Motor vehicle sales slump in May. The latest data shows that fewer selling days and lower foot traffic hurt U.S. auto sales last month.
[13]

Construction spending falls in April. Spending by construction firms on residential, government, and nonresidential projects declined, surprising economists who had expected a slight overall increase.
[14]

Factory orders beat expectations. April orders for U.S. manufactured goods grew by the largest amount in six months, though much of the growth came from volatile commercial aircraft orders.
[15]

Personal spending surges in April. Spending by American consumers grew more than expected while personal income increased in line with expectations, showing that consumer spending is off to a good start in the second quarter.
[16]
 
 To Your Prosperity,

Kevin Kroskey, CFP®, MBA


This article adapted with permission from Platinum Advisor Marketing Strategies, LLC

[i] http://www.foxbusiness.com/markets/2016/06/01/u-s-auto-sales-slumped-in-may.html
[2] http://www.foxnews.com/us/2016/06/01/us-construction-spending-tumbled-in-april.html
[3] http://www.foxcarolina.com/story/32132329/us-factory-orders-up-19-percent-in-april-best-in-6-months
[4] http://www.businessinsider.com/personal-income-and-spending-april-2016-5  [5] https://www.frbatlanta.org/cqer/research/gdpnow.aspx?panel=1 http://money.cnn.com/2016/05/25/investing/housing-market-economy-stocks/ http://www.cnbc.com/2016/05/31/us-personal-income-april-2016.html
[6] http://www.usatoday.com/story/money/business/2016/06/04/dismal-jobs-report-blamed-weather-trump-and-more/85364144/
[7] http://www.usatoday.com/story/money/business/2016/06/04/dismal-jobs-report-blamed-weather-trump-and-more/85364144/
[8] https://research.stlouisfed.org/fred2/graph/?g=4Dic
[9] http://www.businessinsider.com/average-hourly-earnings-growth-may-2016-2016-6
[10] https://research.stlouisfed.org/fred2/graph/?g=4DsD
[11] https://www.frbatlanta.org/chcs/wage-growth-tracker.aspx?panel=1 [Accessed June 4, 2016]
[12] http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html
[13] http://finance.yahoo.com/q/hp?s=%5EGSPC&a=04&b=31&c=2016&d=05&e=3&f=2016&g=d
http://finance.yahoo.com/q/hp?a=04&b=31&c=2016&d=05&e=3&f=2016&g=d&s=%5EDJI%2C+&ql=1 http://finance.yahoo.com/q/hp?a=04&b=31&c=2016&d=05&e=3&f=2016&g=d&s=%5EIXIC%2C+&ql=1 https://www.msci.com/end-of-day-data-search
[14] http://www.cnbc.com/2016/06/03/the-us-may-have-actually-lost-jobs-in-may-economist-says.html
[15] http://www.businessinsider.com/verizon-strike-jobs-report-2016-6
[16] https://research.stlouisfed.org/fred2/graph/?g=4Dic