Weekly Market Update
May 22, 2017
Presented By:  Todd Day, Portfolio Manager


Are the Markets Flashing 
a Warning Sign?

 Despite a new all-time high for the S&P 500 on Monday, stocks closed lower on the week thanks to the one-day sell-off that was spurred by the latest political headlines, rising concerns on the FED holding off in June and growing concerns over the timing and effectiveness of tax reform.  But, it only took one day for the markets to look past what's going on in DC and keep focused on much better earnings  growth and improving economic data.  

But - I'll tell you, I am old enough to remember when bear markets lasted longer than 18 hours.   Quite amazing, actually.  


Last week we finally got some good news from retail earnings.  First and foremost, Home Depot reported another strong quarter and raised their outlook.  This is a second derivative or barometer of the housing markets, so, still solid. 

And Walmart beat on earnings as online sales surged.  Despite shoppers turning to Walmart online - here is an incredible stat for you - their stores are located within 10 miles of nearly 90% of the U.S. population. 

Target reported a smaller drop in sales than expected.  If you dig deeper though, food sales were weak and the timing on expenses drove earnings and left guidance unchanged.  There's less here than meets the eye.

Equipment maker, John Deere, shocked the markets by beating across the board and raising profit forecast. 

Other retailers not avoiding the first quarter slump in retail were Dick's Sporting Goods and TJ Maxx.  TJ Maxx was surprising; they normally defy the industry trends.  


Remember how the soft data was much stronger than the hard data?  Not any more, at least in manufacturing.  Industrial production was much stronger than we were looking for and the Philly FED survey came in much better than expected, and the strong bounce in business investment could point to solid growth in Q2. 

Home builder sentiment rose in May to the second-highest level since the recession, but their optimism didn't translate in a strong housing starts and permits numbers, which were lower than expected. 

And, Jobless claims just keep falling and continuing claims are at multi-decade lows. 

Finally, the index of leading economic indicators remains very solid, at a 0.3 percent gain in April with March also revised to 0.3 percent. Unemployment claims, consumer expectations and factory hours are strong positives in this report, one that points to solid growth for the nation's economy in the months ahead.


Across the ponds, European stocks continue to rise and last week we noted that the FTSE 100 surpassed 7500 for the first time ever, setting a new high.  Data out of the region for the 2nd quarter points to additional acceleration in growth compared to the 1st quarter. 

The emerging markets were rocked on Thursday as news of political scandal from Brazil's newly installed President sent Brazil's stock market and other emerging stock markets down hard.  


Earning season continues but at a much slower pace. 

On the economic front, we will get several regional FED reports, as well as, some more housing data.  I think the most important piece of news this week will be the release of the FED's May meeting notes.  Will they give us more clues as to the chance of another rate hike in June?  

Remember, a lot has happened since the FED met the first of May, and FED futures continue to decrease the odds, so we'll see.  We'll also get the first revision to Q1's GDP. 

As the case has been for some time now, political and geopolitical events are going to be in the headlines, but it is going to be interesting to watch the markets to see if they can maintain the resiliency we have seen - like I say, the rear view mirror is always clearer than the windshield.

Stay tuned and we'll keep you posted.

"Leave the beaten track behind occasionally 
and dive into the woods.
Every time you do, you will be certain to find something you have never seen before."
- Alexander Graham Bell
Sausage-Stuffed Zucchini Boats

Perfect as a main dish or to pair with pasta!

4 small zucchini

2 teaspoons olive oil

1 small onion, chopped

2 links sweet Italian sausage, casing removed

1/4 teaspoon salt

1 1/4 cup marinara sauce

1 cup mozzarella, shredded

 Parsley, chopped



1.   Cut zucchini lengthwise.

2. Scrape out insides from the zucchini, creating a 1/4-inch shell.

3. Chop zucchini insides into pieces.

4. Heat olive oil in a 10-inch skillet on medium high.

5. Add chopped zucchini, Italian sausage, onion, and salt to the skillet.

6. Cook together for 8 minutes, breaking up pieces as you go along.

7. Spread marinara into a 3-quart baking dish.

8. Arrange the zucchini shells on top of sauce with hollow sides up.

9. Fill the shells with your cooked sausage mixture.

10.Top each zucchini with shredded mozzarella.

11. Cover dish with foil and bake for 30 minutes at 450°.

12.  Uncover foil and bake for another 5 minutes.

13.  Garnish with parsley.

14.  Serve either as a main dish or paired with pasta.



Recipe adapted from Good Housekeeping


Details About Filing Your Taxes Late
Sometimes, being able to file your taxes on time can just be plain impossible. Whatever reason may cause you to file late, you have obligations you need to address as a result of your delayed filing status. Here are some important questions to think about.
If you expect to receive a refund, will the IRS penalize you for filing late?
No. The IRS doesn't penalize taxpayers who expect to receive a refund.
What fees will you get if you file late?
Late filers may be stuck with two penalties:

Filing your taxes late: The minimum penalty for filing more than 60 days after the due date or extended due date is $205. You could receive a penalty of 5% of your unpaid taxes each month - and the maximum penalty is 25%. If you owe less than $205 in taxes, then you simply pay 100% of that tax.


Paying your taxes late: You also receive more fees when you pay your taxes late. Generally, this monthly fee is 0.5% of your unpaid taxes - and can grow to become as high as 25% of the unpaid taxes.

You also accrue interest on these fees; so the longer you wait, the more fees you may pay. Other filing details may apply, so be sure to check out further guidance on the IRS website .

Tip courtesy of IRS.gov

Get Out of That Ugly Lie
We all have off-days where the ball just seems to land in the most difficult spots. If you're stuck in a spot where you can't address the ball in any normal way, you need to know how to creatively escape these bad breaks. So, the next time your ball lands next to a tree or bush, you can take specific steps with your stance and approach to help you save your shot.

Stand with your back facing the target

When doing so, hold the club in your right hand (opposite for lefties), and point the club face at your target. You should have your club arm out to the side. This stance gives you the motion and space you need for swinging and hinging the club.

Hinge the ball up and down by using your wrist

You'll want to pop your ball onto the fairway. With this stance and motion, you have the speed you need to advance the ball back to the position you need for a standard shot.
While this move may seem risky, it can help you get back on track without taking an unplayable lie penalty or missing the shot and not being able to advance the ball. Instead, you'll create an open path to the green for your next shot by making full contact with the ball and pitching it out to the clear.
Tip courtesy of Golf Tips Magazine

Soothe Hand Pain From Arthritis

Living with arthritis can be a debilitating experience. When your cartilage wears away, you have no buffer left between your bones and your joints. And if you have arthritic hands, you can experience swelling and inflammation that result in stiffness and pain, making moving and using your hands challenging. Here are a few tips to help you manage hand pain from arthritis.

Make a fist: Hold your left hand up straight and slowly create a fist. You'll want your thumb to be on the outside of your hand. Be sure not to squeeze your hand, as this can cause more pain. Once you create a fist, slowly open your hand and straighten your fingers. Do this exercise 10 times, and repeat with your right hand.

Make an "o": Point your left hand straight up and curve your fingers inward. Your goal is to make the shape of an "o" with your hand, where the fingertips touch. Once you create the "o" position, hold it for a few seconds before uncurling your fingers. You can do this for each hand, repeating multiple times a day.



Do a finger lift: Lay your hand palm down and flat on a table. From this position, slowly lift each finger, starting with your thumb. Once you lift the finger up, hold it for one or two seconds, and then gently lower it. Repeat this exercise for each finger and for the right hand.


Tip courtesy of Heathline

Three Green Uses for Lemons
The acidity in lemon juice can serve a variety of cooking, cleaning, and gardening functions around your home. Due to its disinfectant qualities, you can swap your other chemical-based supplies for lemon juice, which provides an all-natural remedy for a variety of needs. Here are three ways to use lemons at home.
1. Clean Cutting Boards
Cutting boards can host a variety of germs and smells that regular washing often won't erase. Lemon, however, can help you cut any odors and bacteria. Wash your cutting boards as normal,  then apply lemon juice and let it stand for 20 - 30 minutes. From there, rinse the juice off the board and allow it to dry.
2. Lighten Your Nails
Our finger- and toenails naturally yellow as we grow older. Fortunately, lemon can help reverse the effects. Simply combine 1 cup of water with juice from 1 lemon in a bowl, and soak your nails for a few minutes, rinsing when you're done.
3. Use for Laundry in Place of Bleach
Bleach is quite toxic - yet, it's a common laundry cleaner to help us remove stains and keep whites bright. You can replace bleach by swapping it for lemon juice. To do so, add 1/2 cup of lemon juice to your laundry before you wash.

Tip courtesy of Care2.com
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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.


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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.


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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.


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