TAME INFLATION PERSISTS
Can the Federal Reserve justify another interest rate hike in the second half of 2017? Given weak inflation pressure, maybe not. The central bank has set a 2% yearly inflation target, but the Consumer Price Index rose only 0.1% in July, resulting in a 1.7% year-over-year gain. Core consumer prices rose 0.1% for a fourth consecutive month in July, so annualized core inflation was also at 1.7%. The Producer Price Index fell 0.1% last month; analysts polled by Briefing.com expected a 0.2% rise.1,2
ANALYSIS: EARNINGS GROW AT A 10% PACE
More than 90% of companies in the S&P 500 have now reported second-quarter results. FactSet, the respected financial analytics firm, now projects a blended earnings growth rate of 10.2% for the S&P 500 for the second quarter, along a with 5.1% blended sales growth rate. S&P component firms generating less than 50% of their sales outside the U.S., however, are set to record 14.0% blended earnings growth and 6.0% blended revenue growth.3
THE PRICE OF GOLD RISES
At Friday’s close, the yellow metal hit a 2-month high of $1,294.00 on the COMEX as investors looked away from equities. Gold gained 2.3% on the week.4
TURBULENCE FOR WALL STREET
Diplomatic tensions sent stocks lower last week. Across August 7-11, the Dow Jones Industrial Average declined 1.06% to 21,858.32; the S&P 500, 1.43% to 2,441.32; the Nasdaq Composite, 1.50% to 6,256.56. Volatility certainly came back: the CBOE VIX jumped 53.44% to end the week at 15.39.5
THIS WEEK: On Monday, Cumulus Media and Sysco report quarterly results. Tuesday brings July retail sales numbers and earnings from Advance Auto Parts, Agilent, Coach, Dick’s Sporting Goods, Home Depot, TJX, and Urban Outfitters. On Wednesday, minutes from the July Federal Reserve policy meeting appear; Wall Street will also interpret a report on July housing starts and building permits and earnings news from Cisco, L Brands, NetApp, Stein Mart, and Target. Fresh reports on initial jobless claims and industrial production roll in Thursday, complemented by earnings from Alibaba Group, America’s Car-Mart, Applied Materials, Bon-Ton Stores, Gap, Ross Stores, Sportsman’s Warehouse, Stage Stores, and Walmart. Friday, investors consider earnings from Deere & Co. and Estee Lauder and the preliminary August consumer sentiment index from the University of Michigan.
1 YR AGO
5 YRS AGO
10 YRS AGO
10 YR TIPS
Sources: wsj.com, bigcharts.com, treasury.gov - 8/11/175,6,7,8 Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.
The Advisors at Sound Financial Strategies Group
For Questions or comments e-mail us at firstname.lastname@example.org or call 601-856-3825.
Most of our new clients come as a result of referrals from people like you. If you know a friend, family member, or small business owner who might benefit from our services, please let us know. Be assured that anyone you refer to our firm will be treated with the same high standards of professionalism and confidentiality that we extend you and all of our clients.
Advisory Services offered through Sound Financial Strategies Group, Inc. (SFSG), a Registered Investment Advisor. Securities offered through Comprehensive Asset Management and Servicing, Inc., (CAMAS) Member FINRA/SIPC, 2001 Route 46, Suite 506, Parsippany, NJ 07054, (800) 637-3211. SFSG and CAMAS are separate and unrelated companies.
Trading instructions sent via e-mail may not be honored. Please contact my office at 877-462-3744 or National Planning Corporation at 888-711-6720 for all buy/sell orders. Please be advised that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets. The text of this communication is confidential, and use by any person who is not the intended recipient is prohibited. Any person who receives this communication in error is requested to immediately destroy the text of this communication without copying or further dissemination. Your cooperation is appreciated.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
1 - reuters.com/article/us-usa-economy-inflation-idUSKBN1AR19S [8/11/17]
2 - briefing.com/investor/calendars/economic/2017/08/07-11 [8/11/17]
3 - insight.factset.com/sp-500-companies-with-more-global-exposure-reported-higher-earnings-growth-in-q2 [8/11/17]
4 - marketwatch.com/story/gold-marks-highest-finish-since-early-june-up-more-than-2-for-the-week-2017-08-11 [8/11/17]
5 - markets.wsj.com/us [8/11/17]
7 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/11/17]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/11/17]
Posted on Mon, August 14, 2017
by Sound Financial