Weekly Update

The Weekly Update

Week of October 15, 2018
By Christopher T. Much, CFP®, AIF®

Volatility was back in full force last week. The three major domestic indexes posted several days of losses before experiencing wide swings on Friday. By week’s end, the Cboe Volatility Index (VIX), which investors use to help measure fear in the markets, had increased by approximately 70%. The VIX also reached its highest point since February.

Despite a number of equities posting last-minute gains on Friday, all three domestic indexes had sizable losses for the week. In fact, they posted their worst weekly performance since March. The S&P 500 dropped 4.10%, the Dow declined 4.19%, and the NASDAQ gave back 3.74%. International stocks in the MSCI EAFE also lost ground, decreasing 3.96%.

What drove market performance last week?
As is typically the case, a number of details affected investor sentiment and behavior. The following topics were among the perspectives impacting …

The Weekly Update

Week of October 8, 2018
By Christopher T. Much, CFP®, AIF®

Although new data continued to show strength in the U.S. economy, markets stumbled across the globe last week. The S&P 500 lost 0.98%, the Dow dropped 0.04%, and the NASDAQ declined 3.21%. International stocks in the MSCI EAFE struggled, posting a 2.35% loss.

While U.S. and international stocks followed similar paths last week, data is beginning to show that our economic outlooks may be very different for the moment.

U.S. Strength in a Growing International Divide
The latest labor report helped underscore some of the differences between the U.S. economy and the rest of the world. While the data missed the mark for new jobs added, September marked the 96th-straight month of job growthand the lowest unemployment level since 1969. The report pushed interest rates higher, which contributed to last week’s equity losses.

However, when describing our economy, Federal Reserve Chair …

The Weekly Update

Week of October 1, 2018
By Christopher T. Much, CFP®, AIF®

Friday, September 28, was the last trading day in 2018’s 3rd quarter, and the S&P 500 posted its strongest quarterly return in nearly 5 years. The Dow also showed impressive returns by beating expectations for the quarter, while the NASDAQ notched record highs against 2017 numbers. For the quarter, the S&P jumped 7.2%, the Dow increased 9.3%, and the NASDAQ moved up 7.1%.

Weekly numbers, however, revealed mixed performances: the S&P 500 slipped 0.54%, the Dow fell 1.07%, and the NASDAQ gained 0.74%. Internationally, the MSCI EAFE dropped 1.07%.

As we learn more about the 3rd¬ quarter, some details from last week offer perspectives on where we stand today.

What We Learned About the 3rd Quarter Last Week

1. Consumer outlook suggests positive trends continue.
A few early reports have given us a sense of positive trends in consumer activity during the …

The Weekly Update

Week of September 24, 2018
By Christopher T. Much, CFP®, AIF®

Last week brought new tariffs and data, and another look at changes coming to equity classifications. Overall, the S&P 500 gained 0.85% and the Dow was up 2.25%, while the NASDAQ dropped 0.29%. International stocks in the MSCI EAFE had sizable growth, posting a 2.89% increase.

A Look Back: Last Week’s Tariffs and Mixed Housing Data

For months, fears of a global trade war have dominated headlines. Last week, China and the U.S. launched new tariffs on each other’s products, but the latest round of this trade skirmish had an interesting effect. Rather than feeling concerned, both analysts and investors interpreted the tariffs to be lower than what they expected. As concerns about the global trade war calmed, both the S&P 500 and Dow reached new record highs.

In addition, we received some important economic information last week, including key …

The Weekly Update

Week of September 17, 2018
By Christopher T. Much, CFP®, AIF®

Last week, the East Coast prepared for Hurricane Florence, which roared through the Carolinas and Georgia. As investors kept their eyes on the weather and its potential for destruction, estimates emerged of up to $27 billion in hurricane damage. This potential for damage contributed to insurance companies in the S&P 500 declining last week. While the hurricane likely won’t have a large effect on our economy, its destruction could influence data for months to come.

Meanwhile, last week brought another milestone in our economy: the 10th anniversary of Lehman Brothers’ bankruptcy.

For 158 years, the Wall Street firm weathered the markets’ changes. By 2008, however, various challenges, including excessive risk taking, led to its demise. The firm’s unexpected bankruptcy announcement shocked investors and triggered market panic, leading what was a simmering financial crisis to become the Great Recession. A …

The Weekly Update

Week of September 10, 2018
By Christopher T. Much, CFP®, AIF®

Domestic markets fell last week due to negative trade news and declining tech stocks, with the S&P 500 and Dow both breaking their multi-week winning streaks. Meanwhile, the NASDAQ posted losses for 4 days in a row for the first time since April and experienced its worst September start since 2008. Overall, the S&P 500 lost 1.03%, the Dow dropped 0.19%, and the NASDAQ gave back 2.55% for the week. International stocks in the MSCI EAFE also declined, losing 2.89%.

The Cboe Volatility Index (VIX), which can help gauge market fears, increased 15.8% last week. This increase matches what often occurs during September, when volatility returns after waning during the summer months. In fact, since 2007, volatility has been above average in September.

Of course, the change from one month or season to another isn’t enough to trigger market …

The Weekly Update

Week of September 3, 2018
By Christopher T. Much, CFP®, AIF®

Trade continued to dominate the news last week and cause market volatility as investors monitored discussions of the North American Free Trade Agreement (NAFTA) and tension with China. While Mexico and the U.S. reached a new trade deal early in the week, talks with Canada stalled on Friday, August 31. Reports also came out that President Trump may be adding tariffs on another $200 billion in Chinese goods. Domestic markets increased for the week and ended August in positive territory. The S&P 500 and Dow each had their best August since 2014—while the NASDAQ’s 5.7% growth was its best performance for the month since 2000. On Wednesday, the S&P 500 reached a new record high. For the week, the S&P 500 gained 0.93%, the Dow added 0.68%, and the NASDAQ increased 2.06%. International stocks in the MSCI …

The Weekly Update

Week of August 27, 2018
By Christopher T. Much, CFP®, AIF®

Last week marked a noteworthy milestone in our economy: On Wednesday, August 22, the bull market entered its 3,453rd day, the longest such run in U.S. history. In the past 9 plus years, domestic indexes have come quite a way since the dark days of the financial crisis. The S&P 500 is now more than 4 times the level that it was when the bull market began on March 9, 2009.

In fact, both the S&P 500 and NASDAQ closed last week with new record highs. The S&P 500 added 0.86%, the Dow increased 0.47%%, and the NASDAQ gained 1.66%. International stocks in the MSCI EAFE also grew, increasing 1.52% for the week.

This domestic growth occurred against a backdrop of geopolitical events. Investors considered new tariffs between China and the U.S., as well as legal developments potentially related …

The Weekly Update

Week of August 20, 2018
By Christopher T. Much, CFP®, AIF®

Challenges in emerging markets affected both U.S. and global stock performance last week, with the S&P 500 experiencing several down days. By market close on Friday, however, two of the three major domestics posted gains for the week. The S&P 500 added 0.59%, the Dow increased 1.41%, and the NASDAQ lost 0.29%. Meanwhile, the MSCI EAFE international stocks slipped 1.18%.

As several reports deepened our understanding of the economy’s underlying health, investors balanced the news with updates on Turkey and trade disputes. Here are some key highlights of the various developments:

Economy: Mixed Picture
The latest unemployment data beat expectations, indicating continuing strength as the labor market is near full employment. However, new home construction missed its 7.4% projected growth, increasing only 0.9% in July—following June’s 12.3% decline. Nevertheless, more positive news emerged: Thanks to tax cuts, a solid labor …

The Weekly Update

Week of August 13, 2018
By Christopher T. Much, CFP®, AIF®

Stocks ended the week in mixed territory as trouble with Turkey’s currency affected U.S. equity performance on Friday, August 10. For the week, the S&P lost 0.25%, the Dow declined 0.59%, and the NASDAQ increased 0.35%. International stocks in the MSCI EAFE stumbled, giving back 1.57%.

Although last week brought relatively few economic updates, we did learn that the labor market continues to improve, and consumer prices are on the rise. While this news may have affected market performance, the challenges facing Turkey’s economy had an outsize impact on global stocks.

What happened to the Turkish lira?
The Turkish lira dropped 14% to 6.46 per dollar, the weakest on record with the largest drop in more than 17 years. The lira ended the week at a record low against the U.S. dollar. Tension between the U.S. and Turkey played a …