Monthly Market Update
July 10, 2017
Presented By:  Todd Day, Portfolio Manager

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Hear Todd's Halftime Report!


Halftime Report 2017
Will the 2nd Half be as Good 
as the 1st?

The first half of 2017 is now in the books and the major averages have enjoyed healthy gains amid all of the political and geopolitical concerns.  At the start of 2017, the major averages came roaring out of the gate as firming economic data, here and abroad, healthy earnings and revenue growth for companies, and soaring consumer confidence helped push stocks to all-time highs.

Optimism over pro-growth initiatives, less regulation, healthcare reform and massive infrastructure spending fueled an almost panic buying scenario as investors feared missing out on the rally.  The leading sectors were technology stocks, fueled by the likes of Facebook, Amazon, Netflix and Google and healthcare stocks on expectations of the aforementioned healthcare reform.  The worst performing sector was the energy sector as oil prices continued to fall despite so-called agreements among OPEC and non-OPEC producers to cut production as the global supply glut continued to mount. 

The Dow, S&P 500, NASDAQ and Russell 2000 all set multiple new highs almost day after day, but in March, Republican leaders pulled their health-care bill from a vote.  That withdrawal triggered doubts about the rest of the administration's policy push, and caused traders and investors to re-assess their expectations for a near-term pop.  A post election equity rally - the so-called "reflation trade" - had been driven by hopes that President Trump would be able to follow through on his promised tax & spending changes, as well as, healthcare reform  and infrastructure projects, seen as highly likely to stimulate the U.S. economy.

The NASDAQ experienced an 18-hour bear market before proceeding on higher, but a mid-June swoon broke its 7-month winning streak and is now trading at a 2-month low. 

In Europe, perhaps the most out of favor region of all global equity markets - corporate profits are growing for the first time in 6 years and the economies of the EU are also improving faster than the U.S.  International equities enjoyed better returns than here in the U.S., despite all of the geopolitical issues and falling oil prices.  

The Federal Reserve raised short term interest rates 2 times in the first half and they signaled more to come, and we learned that they are now considering reducing their balance sheet later in 2017.  Now, you would think that if the FED is raising rates (tightening monetary policy), then rates would go up, but NO!  In fact, U.S. Treasury yields fell to levels not seen since before the election - this also bears watching, as the bond market is sending some mixed signals about the economy. 


We started 2017 with firming economic data, especially the "soft" data, consumer sentiment and small business optimism, but auto sales fell off a cliff, housing data deteriorated, retail sales were horrible, and manufacturing slumped.  Although consumers grew weary about the political environment, conditions in the real economy like low gas prices, rising stock market valuations and a strong labor market were major confidence boosters.


In a nut shell, the biggest story-line for stocks was in the retail sector.
Retailers large and small have been beset by a plague of problems (shopping habits and spending changes), most importantly was the influence of Amazon. Retail giants such as Sears, Macy's and a host of others just kept getting "Amazoned".  Amazon comprised over 65% of the growth in U.S. online retail sales in 2016, and they separately estimate it was more than 27% of the increase in the "total" retail market.

Think about that - one company was a quarter of all growth in retail sales.
How do you compete against that?


Heading into the second half of 2017, I'll be keeping my eye on several things that could be market moving.  Obviously, political and geopolitical issues will be first and foremost.  Will also be watching how the FED proceeds with higher rates and the impact on stocks and bonds.  They have told us they are going to take away the punch bowl from the party, so now it is our responsibility to keep dancing, but closer to the exit and with a sharp eye on the tea leaves.

So, I hope you are enjoying your summer, stay safe in your travels and stay tuned and we'll keep you posted.

Finally, I like to remind you that if you have any questions about any of these issues and how they impact your portfolio, please let us know.  And if you are not currently a client and wish to have a portfolio review, please reach out to us. 

"Truth is ever to be found in simplicity, and not in the multiplicity and confusion of things."
- Isaac Newton
Savory Thai Turkey Lettuce Wraps

A fresh take on the classic wrap!

*    2 medium bell peppers, seeded and chopped

*    1 tablespoon vegetable oil

*    3 garlic cloves, chopped

*    1 pound ground turkey

*    2 tablespoons fish sauce

*    1/4 cup fresh cilantro, chopped

*    1/4 cup fresh mint leaves, chopped

*    3 tablespoons lime juice

*    1/2 teaspoon sugar

*    Lettuce cups

*    Sriracha Hot Sauce, for serving


1.   Prepare a 12-inch skillet with 1 tablespoon vegetable oil on 
medium-high heat.

2.   Add bell peppers, and sauté for 3 minutes.

3.  Add garlic, and cook for 30 seconds.

4.  Add ground turkey and fish sauce to peppers, and cook for 5 minutes, breaking into crumbles.

5.  Remove from heat, and add cilantro, mint leaves, lime juice, and sugar.

6.  Serve turkey and peppers mixture in lettuce cups.

7.  Garnish with Sriracha hot sauce (optional).


Recipe adapted from Good Housekeeping

Understand How Offer in Compromise Works
Sometimes, taxpayers owe more money in taxes than they can afford to pay to the IRS. When this happens, you have the option to file an Offer in Compromise, which allows you to pay less than you owe. If you opt to pursue this route, here are some specific details about Offer in Compromise you should know:

Affording the full debt amount

If you can afford to pay your full debt, you probably will not qualify for Offer in Compromise. Instead, you should pursue other options, such as setting up a payment plan with the IRS.
Filing all required tax materials
In order to apply for an Offer in Compromise, you must have filed all necessary tax paperwork with the IRS.

Making an initial payment toward your debt

The IRS may require you to pay an amount toward your owed taxes when you apply for Offer in Compromise. Any payments will apply toward your debt
You can find out if you qualify to receive your tax debt by using the IRS Offer in Compromise Pre-Qualifier Tool . Other details may apply, and you can find more information on the IRS website .
 * This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
Tip courtesy of

Exercise to Improve Your Strength - and Game
Golf may not be the most strenuous sport, but that doesn't mean you should let your athleticism slip. As a golfer, you need endurance and a strong core when facing long, difficult courses. You also need power for maximizing your swing. Making sure to regularly exercise by working on your strength and conditioning will help your game improve. One effective exercise is The Box Step. Easily done at home, this exercise builds strength by engaging your quads, hamstrings, glutes, and hips.
The Box Step
To do:

1. Set a box or stack platforms at 12 - 14 inches high.

2. Step up on the box with your right foot, remaining in control of your body.

3. Lift your left knee, pause, and then return your left leg to the starting position. Keep your movements fully controlled and with a soft landing.

4. Rest, then repeat and rotate legs.

Tip courtesy of Golf Digest

Know the Signs of Sleep Apnea

Sleep apnea is a serious health condition that causes interrupted breathing cycles when people are sleeping - and it can lead to a host of problems.  Medical ailments such as high blood pressure, diabetes, and heart failure can all result from sleep apnea. To identify if you may be suffering from sleep apnea, check out these common risk factors and symptoms.
Common Risk Factors
Overall, men are more at risk for sleep apnea. Some additional risk factors include if you:

*  Are overweight

*   Have a large neck that is 17" or greater in men or 16" or greater in women

*   Have a deviated septum

*   Have large tonsils or a large tongue

Common Symptoms
You are possibly experiencing the effects of sleep apnea if you do the following:

*   Snore loudly

*   Wake up choking or gasping

*   Stay tired or low on energy during the day

*   Get restless sleep

*   Experience forgetfulness and mood changes

Tip courtesy of WebMD

Control Mosquitos With These Natural Repellents
Controlling mosquitos can quickly become like a summertime hobby. While many commercial products are available to help, they often contain the chemical DEET, which research links to a variety of health complications, including damaged brain cells. Fortunately, nature provides its own ingredients to keep mosquitos at bay. Here are some common natural repellants you can use this summer:

Catnip: Though your cat loves catnip, mosquitos don't. Some studies show that catnip is 10 times more effective at repelling mosquitos than DEET.

Garlic: Good news for garlic lovers! Mosquitos hate it. The more garlic you consume, the more you'll taste like it and thus deter those biting insects.

Black Pepper: When used as an extract, black pepper has shown to ward off mosquitos. You can also try using it as an essential oil.

Want to make your own repellent?

1.   Buy the following essential oils:


* Catnip 

* Citronella 

* Lavender

* Neem  

* Black pepper


2.   Mix 6 drops of each into roughly 30 milliliters of a moisturizer or natural oil. Make sure it's unscented.

3.   Cover your skin with the oil mixture before going outside.


 Remember to test for skin allergies on any ingredients before ongoing use.

Tip courtesy of
Share the Wealth of Knowledge!

Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.


Diversification does not guarantee profit nor is it guaranteed to protect assets

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.


The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.


The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.


The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.


The Housing Market Index (HMI) is a weighted average of separate diffusion indices based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. Each resulting index is then seasonally adjusted and weighted to produce the HMI.


The Pending Home Sales Index, a leading indicator of housing activity,  measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos and co-ops.  The PHSI looks at the monthly relationship between existing-home sale contracts and transaction closings over the last four years. The results are weighted to produce the index.


The Chicago Board Options Exchange Market Volatility Index (VIX) is a weighted measure of the implied S&P 500 volatility. VIX is quoted in percentage points and translates, roughly, to the expected movement in the S&P 500 index over the upcoming 30-day period, which is then annualized.


The BLS Consumer Price Indexes (CPI) produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. Survey responses are seasonally adjusted and weighted to produce a composite index.


The Conference Board Leading Economic Index (LEI) is a composite economic index formed by averages of several individual leading economic indicators, which are weighted to produce the complete index.


Google Finance is the source for any reference to the performance of an index between two specific periods.


Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.


Past performance does not guarantee future results.


You cannot invest directly in an index.


Consult your financial professional before making any investment decision.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.


These are the views of Horizon Financial Services, LLC, and should not be construed as investment advice. Neither Horizon Financial Services, LLC nor its Investment Advisor Representatives or Associates gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information. 

John Brais, Owner & Founder
Investment Advisor Representative
Certified Retirement Financial Advisor
Horizon Financial Services, LLC
3880 Vest Mill Road, Suite 100
Winston Salem, NC 27103
(336) 659-7060


Investment advisory services are offered through Horizon Financial Services, LLC, a North Carolina State Registered Investment Advisor.  Insurance products are offered through 

New Horizon Financial Services, Inc.  The aforementioned are affiliated companies.