Author: Jasmin Dixon

Jasmin Dixon

Financial News and Portfolio Management Discussion through October 20th

Solid earnings helped US stocks post small gains for the week. The S&P 500 gained a fraction of a percent and the Dow rose 0.4% for the week.  Internationally, Japan slipped 0.7%, but Europe was up 0.6% for the week.  The yield on the 10-year Treasury climbed over the week to 3.20%.

The number of available jobs outnumbered the number of people looking for jobs by 902,000.  The highest number on record.

China’s third quarter growth rate slowed to 6.5% its weakest level of growth since the financial crisis, and below expectations.  Industrial output and consumption weakened while exports held up.

Sales of previously owned homes fell 3.4% in September from a month earlier and are down 4.1% from a year earlier.  It was the seventh straight month of declines.

Italy’s bonds were downgraded by Moody’s to the lowest investment grade rating.

Harris Corp and L3 Technologies have agreed to merge which would create a firm valued at $33.5 billion.  It would be the largest ever defense industry merger. Article

Retail giant Sears declared bankruptcy.

Johnson and Johnson, BofA, Goldman Sachs, Morgan Stanley, Proctor & Gamble and Netflix all reported strong third quarter earnings.

 

 

 

 

Financial News and Portfolio Management Discussion through October 13th

Stocks had their worst week since March driven by a variety of issues including an increase in interest rates and trade war concerns.  The S&P 500 sank 4.1% and the Dow plunged 4.2% for the week.  Internationally, Japan and Europe fell 4.6% for the week.  The yield on the 10-year Treasury eased over the week falling to 3.14% as investors sought safe haven from the stock market turmoil.

The CPI rose a less than expected 0.1% in September to bring the gain over the past year to 2.3%.

The average rate on a 30 year fixed mortgage rose to 4.9%, the highest level in 7 years.

Consumer sentiment fell in early October, but still is at a high level.

Big banks JP Morgan, Citigroup, and Wells Fargo posted double digit earnings growth in the third quarter driven by higher consumer lending and spending. Article

 

 

Budgets and Retirement

Using a budget to understand your income and expenses can help you plan spending habits, decrease unnecessary and excessive spending, and take control of your finances. For retirement planning, effective budgeting is an important step in deciding how much you can afford to contribute to your retirement plan, and how much you may need in income after retirement.

Budgets and RetirementRead more

Financial News and Portfolio Management Discussion through October 6th

US stocks sank over the week on rising bond yields.  The S&P 500 dropped 1.0% and the Dow edged down slightly for the week.  Abroad, Europe fell 1.8% and Japan declined 1.4% for the week.  The 10-year Treasury reached its highest level since May of 2011 finishing the week at 3.23%.

The September jobs report was mixed with the number of new hires, 134,000, falling well short of the 180,000 expected.  However, the unemployment rate fell to 3.7% from 3.9% for the lowest level since 1969.  July and August were revised higher by 87,000 new hires. Article

US manufacturing activity slowed in September.

US auto sales fell roughly 6% in September from a year ago.

The US services sector activity hit a record in September and private payrolls rose more than expected.

 

 

September Market Commentary

US stocks once again touched new record highs during the month before ending modestly higher.  However, they posted the best quarterly performance since 2013 on strong earnings and economic news.  The US and Canada were able to reach a deal to revise the North American Free Trade Agreement relieving trade tensions with one of the US’s largest trading partners.  The US and China, however, applied new tariffs to each other and an offer to return to the negotiating table was rebuffed.  Economic news remains strong with employers adding 185,000 new hires and wage growth reaching 2.9%.  Inflation rose 0.2% in August, below expectations, consumer confidence reached the highest level in 18 years in September, and the 2nd quarter US Gross Domestic Product increased at an annual rate of 4.2%.  Oil rose more than 5% over the month, ending at $73.25 a barrel, which nears a four year high.  For the month, US stocks edged up 0.17% making the third quarter return 7.12%.  For the year to date US stocks have gained 10.57%.

Foreign stocks were the top performing asset class for the month on reduced fears over emerging markets and an improved trade outlook.  The central banks of Turkey and Russia took steps to stem investors’ concerns about their weakening currencies during the month.  The European Central Bank lowered its projections for growth, but reaffirmed its commitment to move away from easy money policies.  They expect to wind down their bond purchase program by year-end and will not look to raise interest rates until after the summer of 2019.  Economic news from Europe continues to be soft with the latest reading of the Purchasing Managers’ Index for September showing a greater than expected deceleration in the manufacturing sector. UK and European Union negotiators are at an impasse on Brexit negotiations with six months until the deadline.  Developed markets outpaced emerging markets for the month, quarter and year to date.  International stocks rose 0.53% for the month bringing the quarterly gain to 0.93%.  However, for the year to date international stocks are still down 2.75%.

Bonds fell in September on higher interest rates.  Investors moved away from safe haven investments as they became more optimistic about the current market environment.  At the Fed’s September meeting they made the widely expected move of raising the Fed Funds rate a quarter percentage point to a range of 2.0% to 2.25%.  They said they expected to raise the Fed Funds rate a quarter percent one more time this year and then a total of 1% over 2019.  The 10-year Treasury yield rose over the month to finish at 3.06%, near its high for the year.  For the month, credit bonds were the top performing sector and shorter term bonds topped longer term bonds.  For the quarter, credit bonds were again the top performing sector and performance by maturity was mixed.  The broad bond market fell 0.64% in September lowering the quarterly return to 0.02%.  For the year to date bonds have fallen 1.60%.

 

Index Performance    Sept. QTR YTDTrl 1 Yr
US Stock (Russell 3000)  0.17% 7.12%10.57%17.58%
Foreign Stock (FTSE AW ex US) 0.53% 0.93%-2.75%  2.43%
Total US Bond Mkt. (BarCap Aggregate)-0.64% 0.02%-1.60% -1.22%
Short US Gov. Bonds (BarCap Gov 1-5 Yr)-0.28% 0.06% -0.21% -0.61%
Municipal Bonds (BarCap 1-10yr Muni)-0.50%-0.07%  0.03% -0.19%
Cash (ICE ML 3Month T-Bill)  0.15% 0.49%   1.30%   1.59%