Special Report: Quarterly Update
WEEKLY UPDATE - JULY 16, 2018
In This Issue
Last week, trade tensions with China lessened somewhat, while the 2 nd quarter corporate earnings season started with mixed results. Against this backdrop, domestic stocks experienced sizable growth. By market's close on Friday, July 13, the S&P 500 was above 2,800 for the first time since February 1. Meanwhile, the Dow was above 25,000, and the NASDAQ had hit a new record.[1] For the week, the S&P 500 gained 1.50%, the Dow added 2.30%, and the NASDAQ was up 1.79%.[2] International stocks in the MSCI EAFE increased as well by 0.16%.[3]
We are now two weeks into July, which means the 1 st half of 2018 is behind us. As we analyze what may be ahead in the markets, we'll also strive to understand what has happened so far this year.  

2nd Quarter Update: Key Details to Know

  • Domestic indexes had mixed results.
    • At the end of the 1 st quarter, the NASDAQ was up by 2.3%, while both the S&P 500 and Dow were in negative territory for the year. [4] Fast-forward to the 2 nd quarter's end, and the Dow was still down with a 1.8% loss between January and June. During the same time period, the S&P 500 gained 1.7% and the NASDAQ added 8.8%. [5]   

  • Trade tension persisted. 
    • Global trade was a major topic throughout the 2 nd quarter. In April, the U.S. proposed $50 billion of tariffs on Chinese products - and China announced its own tariffs in response. [6] The trade tension also extended to Canada, the EU, and Mexico as the U.S. added tariffs to steel and aluminum imports from these countries. [7] While this situation attracted significant news coverage, investors were able to put much of their focus on economic details - such as corporate earnings - instead. [8] 

  • Interest rates rose. 
    • In June, the Federal Reserve increased interest rates by 0.25%, which marks the 2 nd rate hike so far this year. The Fed gave an optimistic view of the economy and said that two more increases could be ahead in 2018. [9]

  • The labor market stayed strong. 
    • In May, unemployment hit its lowest level since 2000. [10] June's labor report showed unemployment increasing to 4% but for a positive reason: more people reentering the job market. The latest report also showed better-than-expected job growth. [11] Wage increases missed expectations and still have room to expand more quickly. [12] At the same time, their steady pace should help keep inflation in check and interest rate increases continue gradually. [13]

    Looking Ahead  

    More 2 nd-quarter data is still to come. Gross Domestic Product may have increased by as much as 5% annually between April and June. That growth rate would be over twice what we experienced in the 1 st quarter. [14] We are also at the very beginning of 2 nd-quarter corporate earnings season, and analysts predict earnings growth of 20%. [15] 

    Moving into the 3 rd quarter, trade will likely continue to be a hot topic, but it's far from being the only detail worth following. As we gain more information about what happened in the 2 nd quarter, we will combine those perspectives with the performance we're experiencing now. In the meantime, if you have any questions, we're here to talk.  

    ECONOMIC CALENDAR
    Monday: Retail Sales
    Tuesday: Industrial Production, Housing Market Index
    Wednesday: Housing Starts
    Thursday: Jobless Claims




    Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5-year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on  Morningstar.com and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly .
     

    "Rich people have small TVs and big libraries,  
    and poor people have small libraries and big TVs."  

    - Zig Ziglar

    Skillet Cookie Sundaes
    Serves 8

    Ingredients:  

    Graham Cracker Layer
    • 6 tablespoons unsalted butter, melted and cooled
    • ¼ cup granulated sugar
    • 1½ cups graham cracker crumbs (from 12 sheets)
    • ¾ cup semisweet chocolate chips
    Cookie Dough Layer
    • 1 cup loosely packed dark brown sugar
    • ¾ cup (1½ sticks) unsalted butter, melted and cooled
    • 1 tablespoon pure vanilla extract
    • 1 large egg plus 1 egg yolk
    • 1½ cups all-purpose flour
    • ¾ teaspoon baking powder
    • ½ teaspoon kosher salt
    • ½ cup sweetened shredded coconut
    • ⅓ cup semisweet chocolate chips
    • Ice cream, for serving
    Directions:  

     

    Preheat oven to 350°F.

    Graham Cracker Layer: Put melted butter and granulated sugar in a medium bowl and mix together. Mix in graham cracker crumbs until moistened. Press the mixture into the bottom of either a 10" cast iron skillet or eight 5" miniature skillets. Spread chocolate chips over the graham cracker crust.  

    Cookie Dough Layer: Whisk brown sugar and melted butter together in a large bowl. Add vanilla, egg, and egg yolk. Mix until combined. Put in flour, baking powder, and salt. Also mix until it is fully combined. Add coconut and chocolate chips and stir.

    Spread the cookie dough evenly over the graham cracker crust. Bake until the cookie dough gets gooey in the middle and golden brown on the edges, 25-30 minutes. Take out of the oven and let it cool slightly. Serve with ice cream and toppings.
     

     

    Recipe adapted from Good Housekeeping [16]

       

    IRS Provides Small Businesses with Tax Videos*
    The Top Golf Fundamental: The Grip
     
    The simple truth: Good shots in golf depend on proper club grip. 

    Although top golf coaches sometimes give elaborate instructions on the best grips, Michael Jacobs makes it easy. Jacobs is an instructor at Rock Hill Country Club in Manorville, New York, and is listed among the 50 top golf teachers in America by Golf Digest.  

    "Stick out your left (weaker) hand and hold the club like you would a heavy suitcase," Jacobs wrote in his book, Elements of the Swing.

    "If you picked up a suitcase, you wouldn't take the handle diagonally across your palm. You'd let it rest in the creases of your fingers where they attach to your palm."

    Golfers should then place their right (dominant) hand on the grip with their palm up and with the handle running along the top crease in the palm. Curl fingers around the underside. Rest the little finger of the right hand on either the left forefinger or between the forefinger and middle finger.

    "Not every 'classic' golf tip you hear is necessarily still relevant now, but this one is still true. There's no reason not to have a great grip. If you start with a bad one, you're going to have to make compensations in your swing from the beginning."
     
     
    Tip adapted from Golf Digest[18]
    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.

    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 .  


    [4]  www.cnbc.com/2018/03/29/us-stock-futures-dow-data-tech-and-politics-on-the-agenda.html

    [5] www.cnbc.com/2018/06/29/us-futures-point-to-triple-digit-rally-at-the-open-despite-gloomy-mark.html

    [6]      www.bloomberg.com/news/articles/2018-07-06/the-trade-war-is-on-timeline-of-how-we-got-here-and-what-s-next



    [10] www.npr.org/sections/thetwo-way/2018/06/01/615917917/unemployment-rate-drops-to-3-8-percent-lowest-since-2000

    [11] wsj-us.econoday.com/byshoweventfull.asp?fid=485657&cust=wsj-us&year=2018&lid=0&prev=/byweek.asp#top

    [12] 
    www.bloomberg.com/news/articles/2018-07-06/u-s-jobs-report-shows-room-to-run-as-trade-war-threatens-gains


    [13] www.reuters.com/article/us-usa-economy/u-s-job-growth-underscores-economys-strength-tariffs-a-threat-idUSKBN1JW0EI

    [14] 
    www.reuters.com/article/us-usa-economy/u-s-job-growth-underscores-economys-strength-tariffs-a-threat-idUSKBN1JW0EI


    [15] www.cnbc.com/2018/07/13/us-stock-index-futures-banks-earnings-and-trade-woes-in-focus.html

    [16]      www.goodhousekeeping.com/food-recipes/dessert/a47671/skillet-cookie-sundaes-recipe/

    [17]  www.irs.gov/newsroom/irs-video-portal-is-one-stop-shop-featuring-tax-information-for-small-businesses

    [18]  www.golfdigest.com/story/fix-your-grip-by-the-weekend

    [19]  www.webmd.com/diet/features/6-reasons-to-drink-water#1

    [20]  www.earthshare.org/2009/05/sunscreen-risks.html


    Visit My Site
    David P. Little & Tyler D. Little
    Little & Associates Wealth Management
    5209 Heritage Ave. Ste. 500
    Colleyville, TX 76034
    817-494-9000
    [email protected]
    http://www.laawm.com

    Securities & investment advisory services offered through 
     Prospera Financial Services, Inc. Member FINRA/SIPC

    Copyright © 2018. All Rights Reserved.