Market Update News
October 9, 2017
Presented By:  Todd Day, Portfolio Manager


Off to the Races!

Despite October's dubious honor of being the most volatile month of the year for the markets, just take a look at where we are - S&P 500, Dow, NASDAQ, NYSE, Mid-Cap 400, Russell 2000 and the Global Dow hit all-time highs last week as geopolitical tensions waned and the hopes for tax reform heats up. 

For the week, and for most of October, financials have been the leading sector with materials, consumer discretionary and technology not far behind.  Energy continues to be the lagging sector. 

U.S. stocks have been pushed higher since the 2016 Presidential election by a number of fundamental forces, including healthy economic data and robust earnings.  Immediately after the election, another force drove stocks higher - the prospect of tax reform.  While that enthusiasm has since retreated, it is beginning to resurface and is impacting returns in a similar fashion. 

Small company stocks outperformed their large cap counterparts following the election and in recent weeks.  The main reason for this would be that small company stocks would tend to benefit the most from corporate tax reform - but until that reform is realized, we need to remember that equity markets can still perform on fundamentals alone - given no major political or geopolitical shocks. 
So - for right now - it's off to the races!


Not all the economic data has hurricane written all over it, but the jobs report was all about the hurricanes.

We saw multi-year highs in the ISM manufacturing and services data.  The manufacturing data was at the highest in 13 years and the services number was the best in 12 years. 

Not the jobs numbers.  The Department of Labor can't quantify September's hurricane effects on payrolls or the unemployment rate, but they appear to be very dramatic nonetheless.  Nonfarm payrolls were negative in September and, at minus 33,000.  But the big surprise in this report was the sudden indications of excessive labor market tightness as the unemployment rate fell 2 tenths to 4.2% and average hourly earnings spiked 0.5% with the year-over-year rate jumping 4 tenths to 2.9%.  This report on the surface -- and needing confirmation from the October employment report to follow next month -- appears to change the dynamics for the labor market and suggests that the Federal Reserve, the decline in September payrolls aside, has fallen behind the inflation curve.


Across the pond, the European stock rally stalled as the tensions over the unrest in the Spanish region of Catalonia, where they are seeking their independence.  Still, stocks in Germany  pushed to new highs.  We also got some good economic data out of the Eurozone region as manufacturing figures are the highest they have been in 6 years. 

Across the other pond, many Asian markets were on holiday most of the week, but the Nikkei did hit the highest level since 2015.  On the economic front, China's PMI data expanded for the twelfth straight month.  


Earning season returns this week and we will kick it off by hearing from a number of the big banks. 

The economic calendar is quiet until we get to Friday when we will get consumer level inflation (CPI), retail sales and consumer sentiment.  We might see a little bounce in the CPI as gas prices were rising last month thanks to Hurricane Harvey's impact.  Retail sales could also show some hurricane related impact as well as sentiment numbers.  As with last week's job report, analysts will be quick to dismiss this "hurricane impacted" data as "transitory". 

As of this writing, before the bell, stocks are looking to keep forging ahead  so, stay tuned and we'll keep you posted. 

"The best and most beautiful things in the world cannot be seen 
or even touched-they must be felt with the heart."
- Helen Keller
Easiest-Ever Spinach Lasagna

Serves 8

1 lb. part-skim ricotta cheese
10 oz. frozen chopped spinach, thawed and squeezed dry
2 cups shredded mozzarella cheese, divided
1 large egg
ΒΌ tsp. salt
1 (32 oz.) jar marinara sauce
1 (9 oz.) box no-boil lasagna noodles
Stir together ricotta, spinach, 1 cup mozzarella, egg, and salt. In a slow cooker, layer marinara sauce, lasagna noodles, and ricotta mixture, starting and ending with marinara sauce and breaking noodles to fit. Top with 1 cup mozzarella. Cover slow cooker, and cook on low for about 4 hours or until noodles are tender.

Recipe adapted from Good Housekeeping

Starting a New Business?
If you are planning to start a business, be sure to visit The IRS website has answers to questions on payroll and income taxes, credits, and deductions, plus more.
New business owners may find the following four IRS tax tips helpful:
Business Structure : An early choice to make is to decide on the type of structure for the business. The type of business chosen will determine which tax forms to file.
Business Taxes : Taxpayers may need to make estimated tax payments. If so, use IRS Direct Pay to make them.
Employer Identification Number (EIN) : Generally, businesses may need to get an EIN for federal tax purposes. If needed, it's easy to apply for it online.
Accounting Method : An accounting method is a set of rules used to determine when to report income and expenses. Taxpayers must use a consistent method.
Get all the basics of starting a business on at the Small Business and Self-Employed Tax Center .
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

When & How to Release
  • The release in a golf swing is important because this movement generates up to seven times more clubhead speed than usual if it is executed correctly. The release of cocked wrists upon impact with the ball is a natural motion that results from a proper setup, address, backswing, and downswing.
    To obtain the feeling of your arms rotating and your wrists unhinging for the release, use a drill to practice.
  • Cock your wrists to 90 degrees at the top of the backswing. Your body will be in a coiled position, ready to generate power on the downswing. Your knees and hips will move into the downswing as your arms come to parallel with the ground.
  •  Straighten your right arm during the downswing and allow your arms, hands, and clubface to rotate, bringing you back to the address position as you strike the ball. Hold your wrists in a cocked position until impact. Accelerate the clubhead through the ball with maximum speed at impact. This clubhead speed will generate the power during the downswing.
  •  Unhinge the right wrist as late as possible into impact for the greatest swing speed, resulting in greater distance on the shot. Tension in your arms and hands will prevent this late release. This movement should occur naturally without manipulating the clubhead with the hands. Allow your right arm to cross over your left after impact. Hit through the ball as your wrists release for a strong follow-through.
Tip courtesy of Golf Week Magazine

Back to School Means Busier Roads
Students of all ages are back at school and it is more important than ever to slow down and pay attention on the road, particularly in the mornings and afternoons. According to the National Safety Council, most of the children who lose their lives in bus-related incidents are 4 to 7 years old, and they're walking. They are either hit by the bus, or by a motorist illegally passing a stopped bus.
Here are several tips improve safety while students, particularly the younger ones, are traveling to and from school.
  • Don't block a crosswalk, forcing pedestrians to go around you.
  • Always stop for a school patrol officer or crossing guard holding up a stop sign.
  • Never pass a vehicle stopped for pedestrians.
  • If you're driving behind a bus, allow a greater following distance than if you were driving behind a car.
  • The area 10 feet around a school bus is the most dangerous for children; stop far enough back to allow them space to safely enter and exit the bus.
  • When passing a bicyclist, proceed in the same direction slowly, and leave 3 feet between your car and the cyclist.
  • When turning left and a bicyclist is approaching in the opposite direction, wait for the rider to pass.
  • Watch for bike riders turning in front of you without looking or signaling; children especially have a tendency to do this.
By exercising a little extra care and caution, drivers and pedestrians can co-exist safely in school zones.
Find more information on the NSC website .

Tips courtesy of NSC

Try Window Inserts Before Replacing Drafty Old Windows
Do you have older windows in your home? When you walk by them, do they feel hot to the touch, or do you feel the heat pouring through them when you walk by? When it's cold outside, is the room noticeably cooler near the windows? If so, you are losing your preferred indoor temperature more through those windows than anywhere else in your home.
Replacing windows can be very expensive. Before you install all new windows in your home, think about giving window inserts a try. Produced by a variety of companies, a window insert is just that - a window-shaped pane of clear, see-through plastic that fit snugly in your window frames to provide an extra barrier of insulation. The net effect is to help keep the temperature outside from becoming the temperature inside.
Window inserts not only might keep you and your family more comfortable, they might also save you money each month on your utility bill.
To learn more about window inserts and how they might reduce your utility bill, talk with a specialist at a home improvement store or go online and do a search for "window inserts."
Tip courtesy of Green Living Ideas

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