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Unemployment is defined as the part of the labor force that is without a job and has been seeking employment within the last four weeks.
The Markets
The stock market tends to be a leading economic indicator.

Last week offered some insight to economics and stock market behavior. The U.S. unemployment rate reached its lowest level since 1969 and wages moved higher, yet major U.S. stock indices lost value.

Why didn’t stock markets move higher? 

The answer is stock prices tend to be leading indicators. They reflect investors’ expectations for the future. Last week, investors may have been thinking like this:

When unemployment is low, companies cannot always hire enough workers…
To hire more workers, companies raise wages… 
Higher wages give workers more spendable income… 
More spendable income produces higher demand for goods and services… 
Higher demand for goods and services leads to higher prices… 
Higher prices (inflation) cause the Federal Reserve to increase the Fed funds rate… 
An increase in the Fed funds rate pushes interest rates higher…
Higher interest rates make borrowing more expensive… 
Higher borrowing costs may slow business spending… 
Slower business spending may cause profits to fall… 
Falling profits may cause investors to sell shares… 
When investors sell shares, stock prices may drop. 

In general, “…while it usually takes at least 12 months for any increase or decrease in interest rates to be felt in a widespread economic way, the market's response to a change (or news of a potential change) is often more immediate,” explained Mary Hall on Investopedia.com.

At the end of last week, 10-year Treasuries yielded 3.2 percent. Daniel Kruger of The Wall Street Journal reported, “U.S. government bond yields rose to their highest level in years Friday as investors reconsidered the strength of the U.S. economy while selling off stocks that could be hurt by higher borrowing costs.”

One way to manage stock market volatility is to have a well-allocated and diversified portfolio.
WHAT DO YOU THINK? 
Athletes who grew up playing pick-up games of baseball, kickball, basketball, street hockey, and other sports with neighborhood kids may have had some advantages they didn’t recognize. 

A Brazilian research study, cited by Freakonomics Radio’s show Here’s Why You’re Not An Elite Athlete (Ep. 351), found children who played sports in unstructured environments showed more tactical creativity and tactical intelligence than children who played in structured environments.

In addition, playing multiple sports may be more beneficial than specializing in a single sport, at least when it comes to soccer.

A study by Manuel Hornig, Friedhelm Aust, and Arne Güllich reviewed the training of soccer players in Germany. Practice and play in the development of German top-level professional football players, which was published in the European Journal Of Sports Science, reported athletes who went on to play for the German national team played more pick-up sports as children, and played more types of sports in adolescence, than players who did not make the German team.

“The trick is not just to get lots of children playing, but also to let them develop creatively. In many countries they do so by teaching themselves…Such opportunities are disappearing in rich countries,” reported The Economist.

Maybe we should rethink our tactics.


Weekly Focus – Think About It 
“One man practicing sportsmanship is far better than 50 preaching it.”
--Knute Rockne, University of Notre Dame football coach
7 Ways The Fed's Decisions On Interest Rates Affect You

When the Federal Reserve raises interest rates, you feel it. “The Federal Reserve has its fingers in your pocketbook to a greater degree than the IRS,” says Michael Reese, a certified financial planner in Traverse City, Michigan. On Wednesday, the Fed raised rates for the third time in 2018, and another rate hike is expected this year.
The committee sets monetary policy, primarily by raising or lowering the Fed’s target for the federal funds rate, which is used as the benchmark for a range of consumer interest rates.

Here are seven ways the Fed affects your pocketbook.

1. The Fed Influences Prices
The Fed’s actions have an indirect impact on the prices you pay at the grocery store, gas pump and other retail outlets. That’s because the cost and availability of money affect people’s willingness to pay for goods and services. When money is cheap and plentiful, there’s more demand and prices tend to rise.

2. The Fed Affects Jobs And Wages
At every meeting, monetary policymakers consider labor market data as they make decisions aimed at achieving maximum employment. They look at numbers such as:
Payroll changes.
Labor force participation rate.
Duration of unemployment.
The Fed indirectly affects the job market. When it raises the federal funds rate, it tends to slow the economy. That leads to fewer people being hired. They also have less leeway to demand pay raises. This lack of power to bargain for higher wages is seen as a way to fight inflation.

3. Fed Affects Credit Card Rates
“What the Federal Reserve does normally affects short-term interest rates, so that affects the rates that people pay on credit cards,” Faucher says. When the Fed sends credit card rates higher, it costs more to borrow. So people tend to borrow less, and buy less. That slows the economy and puts the brakes on inflation.

4. Fed Nudges CD Yields
If you rely on interest from certificates of deposit for income, you’re probably not happy that the Fed kept interest rates at rock bottom for so long. “Retirees want to live on the interest on their CDs,” Reese says. “The Fed determines whether they can do that or not.” CD rates largely follow the short-term interest rates that track the federal funds rate.

5. Fed Drives Auto Loan Rates
The federal funds rate chiefly influences short-term interest rates, because it’s a rate on money lent overnight between banks. But it also trickles through to medium-term fixed loans, such as auto loans. “The rate the Fed sets ends up affecting almost everything in our economy,” Reese says. Whether the lender is a credit union, bank or other institution, it will price auto loans relative to the prime rate, which moves up and down in sync with the federal funds rate.

6. Little Influence On Mortgages
Mortgage rates respond to market forces, specifically, to the needs of bond investors. The Federal Reserve exerts an indirect influence on mortgages. Sometimes mortgage rates go up when the Fed increases short-term rates, as the central bank’s action sets the tone for most other interest rates. But sometimes mortgage rates fall after the Fed raises the federal funds rate.

7. Touching Home Equity Lines
Your home equity line of credit, or HELOC, is linked to the prime rate. When the Fed raises its target rate, HELOC rates follow. Because credit card interest rates will go up, too, it still could be to your advantage to consolidate credit card debt into a lower-rate HELOC if you have the self-discipline to pay off the debt as quickly as you can.
The sooner you pay off variable-rate debt, the better, because many investors and economists expect the Fed to keep gradually increasing the federal funds rate.
October Facts Edition - Did you know?
October's birthstones are the tourmaline and opal.
* Securities offered through LPL Financial Member FINRA/SIPC.
* This newsletter was prepared by Peak Advisor Alliance. Peak Advisor Alliance is not affiliated with the named broker/dealer. 
You cannot invest directly in this index.
* The Standard & Poor's 500 (S&P 500) is an unmanaged index. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* 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.
* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.
* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! 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.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Stock investing involves risk including loss of principal.
his information in not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
* The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basked of consumer goods and services.
* Harmonized Indexes of Consumer Prices are measures of consumer price inflation that have been standardized across multiple countries based on European Union definitions. A monthly report compiles HICP trends for 16 economies, alongside conventional Consumer Price Indexes (CPI) as measured by national governments.
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Sources:
https://www.bankrate.com/finance/mortgages/fed-affects-banks-rates-prices-and-jobs-1.
https://www.10news.com/news/making-it-in-san-diego/interest-rate-hike-s-impact-on-
your-money
https://www.conference-board.org/data/bcicountry.cfm?cid=1
https://www.barrons.com/articles/dow-tumbles-180-points-jobs-report-inflation-gauge
-1538774927?mod=hp_DAY_3 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-08-18_Barrons-Dow_Tumbles_180_Points_Because_the_Jobs_Report_is_Really_an_Inflation_Gauge
-Footnote_2.pdf)
https://www.investopedia.com/investing/how-interest-rates-affect-stock-market/
https://finance.yahoo.com/quote/^TNX?p=^TNX
https://www.wsj.com/articles/bond-yields-reach-new-highs-on-growth-outlook-153877469
6 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-08
-18_WSJ-Bond_Yields_Reach_New_Highs_on_Growth_Outlook-Footnote_5.pdf)
https://www.researchgate.net/publication/45492811_The_effect_of_deliberate_play_on_
tactical_performance_in_basketball
http://freakonomics.com/podcast/sports-ep-3/
https://www.tandfonline.com/doi/abs/10.1080/17461391.2014.982204
https://www.economist.com/international/2018/06/09/what-makes-a-country-good-at-football (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/10-08-18_TheEconomist-What_Makes_a_Country_Good_at_Football-Footnote_9.pdf)
http://www.keepinspiring.me/100-most-inspirational-sports-quotes-of-all-time/ (Number 89)
http://voicebaltica.com/latvian-unemployment-rate-fell-8-7-2017/employ/