Growth Report – Monday, June 25, 2018

TARIFF TALK INTENSIFIES
Major economic powers proposed additional import taxes last week, as investors wondered if a global trade war was now underway. Monday evening, President Trump stated that he had instructed U.S. Trade Representative Robert Lighthizer to identify another $200 billion of Chinese products to subject to a new 10% import duty. Shortly before the trading week began, the European Union proclaimed it would place import taxes on $3.3 billion of U.S. products, in retaliation to recently imposed metals tariffs. Friday, President Trump mulled imposing a 20% tax on autos arriving from the E.U. unless it lifts such import duties.1,2

EXISTING HOME SALES WEAKEN SLIGHTLY
A National Association of Realtors report says that sales tapered off 0.4% in May. While the inventory of homes listed grew 2.8% in the fifth month of the year, the median price of an existing home hit an all-time peak of $264,800. The sales pace was 3.0% slower than in May 2017.3

HOUSING STARTS RISE, BUT PERMITS FALL
While home sales were nearly flat last month, groundbreaking increased 5.0% according to the Census Bureau. Its latest report on U.S. residential construction also noted a 4.6% drop in building permits, far exceeding the decline seen in April.4

BLUE CHIPS SHED 2%
To be precise, the Dow Jones Industrial Average lost 2.03% last week, sinking to 24,580.89 at Friday’s close even with a 119-point Friday gain. Faring better, the Nasdaq Composite retreated 0.69% to 7,692.82 in the same time frame, while the S&P 500 declined 0.89% to 2,754.88.5

THIS WEEK: Investors react to May new home sales data and Q2 earnings from Carnival on Monday. The Conference Board’s June consumer confidence index appears Tuesday, along with the latest S&P CoreLogic Case-Shiller home price index and earnings from Lennar and Sonic. On Wednesday, Wall Street considers the NAR’s May index of housing contract activity, May durable goods orders, and earnings from Bed Bath & Beyond, General Mills, Paychex, and Rite Aid. Thursday, the third estimate of Q1 economic growth arrives, along with the latest initial claims figures and earnings announcements from Accenture, ConAgra Brands, KB Home, Nike, and Walgreens Boots Alliance. May personal spending data, the May PCE price index, and the final June University of Michigan consumer sentiment index emerge Friday, plus earnings from Constellation Brands.

% CHANGE Y-T-D 1-YR CHG 5-YR AVG 10-YR AVG
DJIA -0.56 +14.88 +13.22 +10.76
NASDAQ +11.44 +23.35 +25.83 +22.25
S&P 500 +3.04 +13.16 +14.60 +10.90
REAL YIELD 6/22 RATE 1 YR AGO 5 YRS AGO 10 YRS AGO
10 YR TIPS 0.78% 0.46% 0.59% 1.75%

Sources: wsj.com, bigcharts.com, treasury.gov – 6/22/185,6,7,8
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.

WEEKLY QUOTE

“Silent gratitude isn’t very much use to anyone.”

– Gertrude Stein

WEEKLY TIP

Business owners can risk neglecting their retirement planning as they get caught up in the daily activity of their companies. Be sure to look into a SEP IRA, SIMPLE IRA, Solo 401(k), or other retirement plans if you are growing a small business.

WEEKLY RIDDLE

You have three coins that add up to $0.31. Two of them are not quarters. What kind of coins do you have?

Last week’s riddle:
It inhibits sight, makes the air colder, and it will come back for you before the day is done. What is it?

Last week’s answer:
Night.

Citations.
1 – npr.org/2018/06/18/621227483/trump-asks-for-200-billion-more-in-tariffs-to-impose-on-china [6/18/18]
2 – fortune.com/2018/06/22/trump-tariffs-european-cars/ [6/22/18]
3 – briefing.com/Investor/Calendars/Economic/Releases/exist.htm [6/22/18]
4 – investing.com/economic-calendar/ [6/19/18]
5 – markets.wsj.com/us [6/22/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F22%2F17&x=0&y=0 [6/22/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F22%2F17&x=0&y=0 [6/22/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F22%2F17&x=0&y=0 [6/22/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F21%2F13&x=0&y=0 [6/22/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F21%2F13&x=0&y=0 [6/22/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F21%2F13&x=0&y=0 [6/22/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=6%2F23%2F08&x=0&y=0 [6/22/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=6%2F23%2F08&x=0&y=0 [6/22/18]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=6%2F23%2F08&x=0&y=0 [6/22/18]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [6/22/18]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [6/22/18]

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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