Trade Tensions Affect Stocks
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BI-WEEKLY UPDATE - AUGUST 14, 2019
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The Week on Wall Street
Stocks spent much of last week rebounding from a Monday drop that reflected nervousness about the U.S.-China trade fight. By Thursday's closing bell, the S&P 500 had regained all its Monday losses - but it descended again on Friday.
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China Devalues Its Currency
Last Monday, stocks fell 3% in reaction to the overnight weakening of the Chinese yuan. A weaker yuan makes Chinese exports cheaper for buyers who pay for them in dollars.
Critics quickly accused China of manipulating its currency to strike back at the U.S. The federal government plans to impose tariffs on nearly all Chinese products next month, likely making those goods more expensive to American consumers; a weaker yuan could counter the effect of those import taxes.[3][4]
Earnings Season Update
Ninety percent of S&P 500 firms have now reported second-quarter results. Their collective sales and profits have surprised to the upside.
Stock market analytics firm FactSet says that overall earnings have beaten estimates by 5.7%. Seventy-five percent of firms have reported actual earnings per share surpassing estimates, which is better than the five-year average.[5]
Final Thought
We are seeing a significant bond rally this summer, even with interest rates at very low levels. (When bond prices rise, bond yields tend to fall.) At the moment, about a quarter of the global bond market is invested in government notes with negative interest rates. The 10-year Treasury stands in contrast. Friday, it was yielding 1.74%.[6][7]
THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The July Consumer Price Index appears, reporting the country's monthly and annual rate of inflation.
Thursday: July retail sales numbers from the Census Bureau.
Friday: The initial August University of Michigan Consumer Sentiment Index presents the latest snapshot of household confidence in the economy.
Source: Econoday / MarketWatch Calendar, August 9, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
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September 2: Office Closed
Our office, and the stock market, will be closed on Labor Day.
October 19: Client Event
This fall's semi-annual client breakfast seminar will focus on cyber security. More information to follow!
November 8 from 9-10 am: Workshop
Join us for the Retire on Purpose workshop.
You will receive actionable tips on what you can start doing today to enrich your life in retirement. A great experience for those about to retire or who have recently retired!
Register yourself and your guests today by clicking here: Retire on Purpose Workshop.
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Interest Rate Cuts & You
On August 1, 2019, Fed Chair Jerome Powell and the Federal Reserve lowered the benchmark rate for the first time in over a decade. This didn't exactly happen out of nowhere. Interest rates haven't dropped since 2008, so financial professionals and investors have been anticipating this event for some time.
What Does The Cut Mean for You?
Remember: rate cuts and other economic factors are taken into account when developing your financial strategy. It's a bit like driving to a vacation destination: when plotting out your trip, it's wise to take factors like slow traffic, construction detours, and other "unknowns" into account. Arriving at your goal means anticipating the unanticipated. That's why we're here.
Reach Out Anytime
We're always available to talk about your goals and how economic events may or may not change the road map of your financial strategy. Feel free to give us a call or set up an appointment anytime.
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"Love yourself for who you are, and trust me, if you are happy from within, you are the most beautiful person, and your smile is your best asset."
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Ileana D'Cruz
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- A bunch of kale
- Olive oil
- Seasoning, depending on preference (salt, ranch powder, nutritional yeast, chili powder, etc.)
Directions:
These healthy alternatives to potato chips are (almost) as good as the real thing. Plus, they're super simple to make and will please even the pickiest of eaters. Eating your veggies has never been so delicious.
- Preheat the oven to 350° F.
- Discard the kale stalks and tear apart the leaves into chip-sized pieces. Wash and dry thoroughly.
- Drizzle the kale with olive oil and add whatever seasonings you prefer.
- Bake for 10 to 15 minutes. The leaves should be brown, but not burnt.
Recipe adapted from Allrecipes[8]
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Low-Impact Exercises for Healthy Joints
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Protecting your joints is important for healthy movement throughout your life, and there are many ways to stay active without causing injury to your knees, hips, or ankles. Here are some of our favorite, low-impact exercises:
- Swimming - Not only is swimming a low-impact exercise, it's also a full-body workout. Hop in the pool and do some laps or just splash around for fun. Either way, it's great for exercising and staying cool in this hot August weather.
- Kickboxing - It sounds intense, but kickboxing is actually a low-impact exercise that's easy on your joints. If possible, modify your workout to focus more on the cardio movements of the sport and not the combat aspect.
- TRX Exercises - The TRX strap is the strap you often see hanging from a bar at the gym. This simple accessory makes it easy to do lunges, pullups, pushups, and squats, without putting pressure on your joints.
- Cycling - Cycling, either indoors or outdoors, is a great exercise and easy on your knees. Find a spin class near you, or get outside and explore a local bike path.
Tip adapted from Healthline
[11]
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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!
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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.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
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 Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
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 indices 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.
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 Platinum Advisor Strategies, LLC, and not necessarily those of the named representative,
Broker dealer or Investment Advisor and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor 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.
By clicking on these links, you will leave our server, as the links are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.
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[1] www.wsj.com/market-data
[2] quotes.wsj.com/index/XX/990300/historical-prices
[3] www.bloomberg.com/news/articles/2019-08-04/asia-stocks-set-to-drop-with-trade-back-in-focus-markets-wrap
[4] www.bloomberg.com/news/articles/2019-08-05/china-hits-back-at-trump-with-weaker-yuan-halt-on-crop-imports
[5] insight.factset.com/earnings-season-update-august-9-2019
[6] www.cnbc.com/2019/08/07/how-bonds-with-negative-yields-work-and-why-this-growing-phenomenon-is-so-bad-for-the-economy.html
[7] www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=yield
[8] www.allrecipes.com/recipe/176957/baked-kale-chips
[9] www.irs.gov/newsroom/taxpayers-should-include-tax-plans-in-their-wedding-plans
[10] www.golfinfluence.com/skill/golf-swing-plane/
[11] www.healthline.com/health/fitness-exercises/low-impact-exercises
[12] www.lowes.com/cd_6+Tips+to+Make+Your+Dishwasher+Energy+Efficient_1280349359_
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