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August 27, 2018

In this week’s recap: a milestone for the current bull market, new record highs for two equities benchmarks, a dip in home sales, and a win for oil.

Weekly Economic Update

August 27, 2018

BULL MARKET MAKES HISTORY

At the close on August 22, the current bull marked its 3,453th day, a record by S&P Dow Jones standards. Between March 9, 2009 and last Wednesday, the S&P 500 advanced 323%, with an annualized return of about 19%. Besides optimism, four other factors drove the market higher in the last nine-and-a-half years: easing by the Federal Reserve, earnings growth (corporate profits have improved in 30 of the past 35 quarters, with the only slump happening in 2015-16), share repurchases, and dip-buying on the assumption that stocks would recover from declines.1

HOME SALES WEAKEN

New National Association of Realtors data shows existing home sales fell 0.7% during July. Last month, the sales pace was the slowest recorded since February 2016. New home buying declined 1.7% in July after a 2.4% June drop, with the sales rate hitting a 9-month low.2,3

OIL FUTURES JUMP 5% IN FIVE DAYS

Crude just left its 7-week losing streak behind. Oil rose 5.4% on the NYMEX last week, settling at $68.72 after a 1.3% advance during the Friday trading session. News indicating Iran’s output might fall with the imposition of U.S. sanctions helped the commodity.4

S&P 500, NASDAQ SETTLE AT NEW PEAKS

The S&P gained 0.86% last week to finish at 2,874.69, surpassing its record close of January 26. Entering fresh record territory of its own, the Nasdaq Composite pushed toward the 8,000 level, closing at 7,945.98 on Friday after advancing 1.66% across five days. The week was good to the blue chips as well: the Dow Jones Industrial Average added 0.47%, settling Friday at 25,790.35. The CBOE VIX fell 4.67% across the week to 12.05.5,6

THIS WEEK

Monday, nothing major is scheduled. | BMO Financial Group and Best Buy present earnings on Tuesday, while the Conference Board’s August consumer confidence index and the latest S&P CoreLogic Case-Shiller home price index also arrive. | The federal government’s second estimate of Q2 economic growth appears Wednesday, as do the NAR’s July pending home sales index and quarterly results from Dick’s Sporting Goods. | Thursday offers July personal spending figures, the July PCE price index, and a new initial unemployment claims report. | On Friday, the University of Michigan releases its final August consumer sentiment index.

% CHANGE

Y-T-D

1-YR CHG

5-YR AVG

10-YR AVG

DJIA

4.33

18.39

14.36

12.65

NASDAQ

15.10

26.70

23.45

23.59

S&P 500

7.52

17.86

14.56

12.69

REAL YIELD

8/24 RATE

1 YR AGO

5 YRS AGO

10 YRS AGO

10 YR TIPS

0.73

0.44

0.69

1.64

Sources: wsj.com, bigcharts.com, treasury.gov - 8/24/185,7,8,9 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.

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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.

CITATIONS:

1 - businessinsider.com/stock-bull-market-longest-on-record-4-main-reasons-for-longevity-2018-8 [8/22/18]

2 - marketwatch.com/story/housing-is-another-brick-in-the-wall-of-worry-stock-analyst-says-2018-08-24 [8/24/18]

3 - investing.com/economic-calendar/ [8/23/18]

4 - marketwatch.com/story/us-oil-futures-climb-more-than-5-for-the-week-2018-08-24 [8/24/18]
5 - markets.wsj.com/us [8/24/18]
6 - cnbc.com/2018/08/24/us-stocks-china-trade-talks-end-powell-to-speak-at-jackson-hole.html [8/24/18]

7-bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F24%2F17&x=0&y=0 [8/24/18]

7-bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F24%2F17&x=0&y=0 [8/24/18]

7-bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F24%2F17&x=0&y=0 [8/24/18]< br>7-bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F23%2F13&x=0&y=0[8/24/18]<br>7-bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F23%2F13&x=0&y=0 [8/24/18]< br>7-bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F23%2F13&x=0&y=0[8/24/18]<br>7-bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=8%2F25%2F08&x=0&y=0 [8/24/18]

7-bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=8%2F25%2F08&x=0&y=0 [8/24/18]

7-bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=8%2F25%2F08&x=0&y=0 [8/24/18]
8 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [8/24/18]
9 - treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [8/24/18]

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