Growth Report – Monday, March 26, 2018

TRADE WAR POSSIBILITY WEIGHS ON STOCKS
Last week, the U.S. imposed excise taxes on steel and aluminum imported from select countries and announced that up to $60 billion of Chinese imports would also soon face tariffs. These protectionist moves weakened bullish sentiment on Wall Street. The S&P 500 fell steadily Thursday and Friday and had its worst week since 2016, slipping 5.95% to 2,588.26; the Dow Industrials sank 5.67% on the week to 23,533.20. The Nasdaq Composite settled at 6,992.67, down 6.54% for the week.1,2

FED MAKES ITS FIRST INTEREST RATE MOVE OF 2018
After Federal Reserve officials voted to increase the target range on the federal funds rate by 0.25% to the 1.50-1.75% level Thursday, their dot-plot forecast showed no change in the pace of tightening planned for this year. Three hikes are projected for 2019 and two more in 2020. In succession, the increases envisioned for 2018-20 could leave rates near 3.4% by the final quarter of 2020.3

EXISTING HOME SALES INCREASE
New National Association of Realtors data shows that the sales pace improved 3.0% in February. That left resales 1.1% higher, year-over-year. The same cannot be said for new home purchases: they fell 0.6% last month according to the Census Bureau, leaving the seasonally adjusted annual sales rate at its weakest level since October.4,5

MEANWHILE, OIL SURGES
WTI crude staged a major rally last week, jumping up 5.6% to close Friday at $65.74 a barrel on the NYMEX. With equities under pressure, gold also gained more allure: prices rose 0.8% across five days to $1,352.90 on the COMEX.2,6

THIS WEEK: Monday, Paychex and Red Hat report earnings. On Tuesday, the Conference Board presents its March consumer confidence index; the Street also considers earnings from Lululemon Athletica, Restoration Hardware, Shoe Carnival, and Sonic. Wednesday, investors await the third Q4 GDP estimate, the February pending home sales index from the NAR, and earnings announcements from Blackberry, GameStop, Hudson’s Bay Co., and Walgreens Boots Alliance. February personal spending numbers, the final March University of Michigan consumer sentiment index, and Q4 results from Constellation Brands appear Thursday. Nothing major is scheduled for Friday.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -4.80 +13.93 +12.43 +8.75
NASDAQ +1.29 +20.20 +23.10 +20.05
S&P 500 -3.19 +10.33 +13.25 +9.17
REAL YIELD 3/23 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.75% 0.46% -0.60% 1.24%

Sources: wsj.com, bigcharts.com, treasury.gov – 3/23/181,2,7,8,9
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.

WEEKLY QUOTE

“Knowledge is the eye of desire and can become the pilot of the soul.”

– Will Durant

WEEKLY TIP

If it feels like your federal student loan debt is holding you back from saving enough for the future, think about switching to an income-based repayment plan, which could cap your loan payments at no more than 10% of your income and free up more money you could contribute to retirement accounts.

WEEKLY RIDDLE

There are 43 hikers walking toward a desert peak. On the way, 6 decide to hike another peak, 12 head back, and 25 make it to the peak. What happens to the rest of them?

Last week’s riddle:
It has two rings. It moves upon request. If a mixture is not right, it simply sits and rests. What is it?

Last week’s answer:
A piston.

Citations.
1 – nytimes.com/2018/03/23/business/trade-tariffs-markets-stocks-bonds.html [3/23/18]
2 – markets.wsj.com/us [3/23/18]
3 – marketwatch.com/story/fed-lifts-rates-in-powells-first-meeting-says-outlook-has-strengthened-2018-03-21 [3/21/18]
4 – tradingeconomics.com/united-states/existing-home-sales [3/23/18]
5 – tradingeconomics.com/united-states/new-home-sales [3/23/18]
6 – quotes.wsj.com/futures/CRUDE%20OIL%20-%20ELECTRONIC [3/23/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F23%2F17&x=0&y=0 [3/23/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F23%2F17&x=0&y=0 [3/23/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F23%2F17&x=0&y=0 [3/23/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F22%2F13&x=0&y=0 [3/23/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F22%2F13&x=0&y=0 [3/23/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F22%2F13&x=0&y=0 [3/23/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=3%2F24%2F08&x=0&y=0 [3/23/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=3%2F24%2F08&x=0&y=0 [3/23/18]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=3%2F24%2F08&x=0&y=0 [3/23/18]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [3/23/18]
9 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [3/23/18]

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. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, 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 an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. 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. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. 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. This material was prepared by MarketingLibrary.Net Inc., for Mark Lund, Mark is known as a Wealth Advisor, The 401k Advisor, Investor Coach, The Financial Advisor, The Financial Planner and author of The Effective Investor. Mark offers investment advisory services through Stonecreek Wealth Advisors, Inc. a fiduciary, independent, fee-only, Registered Investment Advisor firm providing investment and retirement planning for individuals and 401k consulting for small businesses. Cities served but not limited to are: Park City, Salt Lake City, Murray City, West Jordan City, Sandy City, Draper City, South Jordan City, Provo City, Orem City, Lehi City, Highland City, Alpine City, and American Fork City in Utah.

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