This Week’s Market Snapshot With John Loeffler

Trade policy remained the primary concern for financial market participants. However, expectations that the Federal Reserve will lower short-term interest rates buoyed the stock market indices. Bond yields fell.

Fed Chair Powell said that officials don’t know how or when trade negotiations and other issues will be resolved, but “we are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective.”

MARKET SNAPSHOT: Each week John Loeffler with Loeffler Wealth Management in Freeport brings us the latest economic outlook for financial planning. Here’s this week’s edition.
http://www.freeportnewsnetwork.com/news-broadcasts/this-weeks-market-snapshot-with-john-loeffler-2/

Loeffler Wealth Management is located at 311 E South St. You can reach them at (815) 326-9037

Posted by Today In The Port on Wednesday, June 12, 2019

The May Employment Report was disappointing but hardly a disaster. Nonfarm payrolls rose by 75,000 (median forecast: +185,000), with a net downward revision of 75,000 to the two previous months. Seasonal adjustment issues likely shifted some of May’s strength into April (reported +224,000), but the underlying trend in job growth appears to have slowed. Manufacturing and construction showed modest gains in May, while retail employment continued to fall (likely reflecting the shift toward online sales). The unemployment rate held steady at 3.6%, but for the key age cohort (those aged 25-54) it fell to 2.9%. Average hourly earnings rose 0.2% (+3.1% y/y), up 0.3% for production workers (+3.4% y/y).

Next week, unless postponed or canceled, a 5% tariff on imports from Mexico is set to go into effect on Monday. We are in the “quiet period” ahead of the June 18-19 Federal Open Market Committee, so we won’t get any comments from senior Fed officials. There are three important data releases. Lower gasoline prices (after seasonal adjustment) should limit the increase in the Consumer Price Index, although core inflation is expected to remain mild. Unit motor vehicle sales rebounded in May, which should drive the headline retail sales figure higher. Industrial production is expected to have remained soft.

Indices

  Last Last Week YTD return %
DJIA 25720.66 25169.88 10.26%
NASDAQ 7615.56 7567.72 14.77%
S&P 500 2843.49 2788.86 13.43%
MSCI EAFE 1854.18 1825.98 7.81%
Russell 2000 1503.54 1485.53 11.49%

Consumer Money Rates

  Last 1 year ago
Prime Rate 5.50 4.75
Fed Funds 2.37 1.69
30-year mortgage 3.91 4.68

Currencies

  Last 1 year ago
Dollars per British Pound 1.269 1.342
Dollars per Euro 1.128 1.180
Japanese Yen per Dollar 108.40 109.70
Canadian Dollars per Dollar 1.336 1.297
Mexican Peso per Dollar 19.688 20.474

Commodities

  Last 1 year ago
Crude Oil 52.59 65.95
Gold 1342.70 1303.00

Bond Rates

  Last 1 month ago
2-year treasury 1.87 2.26
10-year treasury 2.12 2.45
10-year municipal (TEY) 2.54 2.74

Treasury Yield Curve – 06/07/2019

As of close of business 06/06/2019

S&P Sector Performance (YTD) – 06/07/2019

As of close of business 06/06/2019

Economic Calendar

June 11  — Small Business Optimism Index (May)
 — Producer Price Index (May)
June 12  — Consumer Price Index (May)
June 13  — Initial Claims (week ending June 8)
 — Import Prices (May)
June 14  — Retail Sales (May)
 — Industrial Production (May)
 — UM Consumer Sentiment Index (mid-June)
June 18  — Building Permit, Housing Starts (May)
June 19  — FOMC Policy Decision
July 4  — Independence Day Holiday (markets closed)
July 5  — Employment Report (June)
July 31  — FOMC Policy Decision
September 18  — FOMC Policy Decision

All expressions of opinion reflect the judgment of the Research Department of Raymond James & Associates, Inc. and are subject to change. There is no assurance any of the forecasts mentioned will occur or that any trends mentioned will continue in the future. Investing involves risks including the possible loss of capital. Past performance is not a guarantee of future results. International investing is subject to additional risks such as currency fluctuations, different financial accounting standards by country, and possible political and economic risks, which may be greater in emerging markets. While interest on municipal bonds is generally exempt from federal income tax, it may be subject to the federal alternative minimum tax, and state or local taxes. In addition, certain municipal bonds (such as Build America Bonds) are issued without a federal tax exemption, which subjects the related interest income to federal income tax. Municipal bonds may be subject to capital gains taxes if sold or redeemed at a profit. Taxable Equivalent Yield (TEY) assumes a 35% tax rate.

The Dow Jones Industrial Average is an unmanaged index of 30 widely held stocks. The NASDAQ Composite Index is an unmanaged index of all common stocks listed on the NASDAQ National Stock Market. The S&P 500 is an unmanaged index of 500 widely held stocks. The MSCI EAFE (Europe, Australia, Far East) index is an unmanaged index that is generally considered representative of the international stock market. The Russell 2000 index is an unmanaged index of small cap securities which generally involve greater risks. An investment cannot be made directly in these indexes. The performance noted does not include fees or charges, which would reduce an investor’s returns. U.S. government bonds and treasury bills are guaranteed by the US government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.

Commodities trading is generally considered speculative because of the significant potential for investment loss. Markets for commodities are likely to be volatile and there may be sharp price fluctuations even during periods when prices overall are rising. Specific sector investing can be subject to different and greater risks than more diversified investments. Gross Domestic Product (GDP) is the annual total market value of all final goods and services produced domestically by the U.S. The federal funds rate (“Fed Funds”) is the interest rate at which banks and credit unions lend reserve balances to other depository institutions overnight. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Material prepared by Raymond James for use by financial advisors. Data source: Bloomberg, as of close of business June 6, 2019.

You can reach Loeffler Wealth Management online at http://lwmil.com/

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