Weekly Market Update
August 28, 2017
Presented By:  Todd Day, Portfolio Manager


From Cheers to Fears

Stocks finished higher on the week despite all of the political noise in what was one of the slowest weeks, as measured by volume, of the year.  The first of the week, stocks soared on renewed hopes of tax reform, but comments from the President regarding a government shutdown put an end to that rally. 

The highly anticipated global economic forum did not disappoint - although we didn't learn anything new from FED Chair Yellen, she did reiterate that the economic outlook was continuing to improve, but there were concerns over inflation remaining low.  She also reiterated that the same risk to the global economic outlook hadn't changed.  


Retailer's earnings were once again in focus and we got more positive surprises.  I think it is important to note that many of their earnings expectations had been slashed so severely, that the bar wasn't that high to cross.   Sears, Abercrombie & Fitch and Dollar Tree were among retail stocks rallying on better-than-expected earnings.  Sears did announce they would be closing 28 more stores in the coming months. 

The biggest disappointment was Lowes.  Lowes was, well, unimpressive. They won't ever become a leader in the supply chain so their life's purpose just to keep "market honest".   They missed on the top and bottom lines.  This report shows they are no Home Depot....


The biggest takeaway from last week's economic data was the continued weakness in the housing data.  Both, new and existing home sales were down. For existing home sales, it was the lowest it has been for 11 months  as the National Association of Realtors (NAR) warn that prices are rising just too fast.
For most of us, I don't think we have a problem with our home price rising. 

We did get some good news on the manufacturing front.  The Richmond FED manufacturing index came in better than expected, as well as the Kansas City FED manufacturing index. PMI services index jumped to a 28 month high. 

Across the pond, stocks also finished higher on the week after struggling for direction all month.  Once again, we continue to get better economic data for the Euro region.  Comments from ECB chief, Mario Draghi, helped push the Euro even higher, which has become a concern for the ECB.  It is worthy of noting that the strength in the Euro is starting to erode some of the European equity returns. 


This should be another low volume week as most market participants are still on the beaches, but they'll return next week.  Earnings season is mostly over so don't look for any big impacts from earnings surprises.  

On the economic calendar, Friday's jobs report will be the highlight for the week, followed by personal income and spending, manufacturing PMIs, and the 1st revision of Q2 GDP.  We will also get the latest read on the personal consumption expenditure (PCE), which is the FEDS preferred measure on inflation.  This may offer clues on the likelihood of another rate hike from the FED, but I do not expect them to move the rest of the year.  

T he political and geopolitical noise will once again keep us on our toes,
so stay tuned and we'll keep you posted.  

Optimism is the faith that leads to achievement;
nothing can be done without hope.

-        Helen Keller
Cappuccino Icebox Cake

        • 8 ounces cream cheese, softened
        • 1 1/2 cup heavy cream, chilled
        • 1/4 cup cocoa, unsweetened
        • 1 tablespoon espresso beans, very finely ground
        • 1 teaspoon vanilla extract
        • 1/2 cup sugar
        • 1 box chocolate wafer cookies
        • Chocolate sauce or melted chocolate



1.      Combine cream cheese, cream, cocoa, espresso, and vanilla, and beat with mixer on medium high until you form soft peaks.


2.      Add sugar, beating gradually until creating more soft peaks.


3.      Use plastic wrap to line an 8.5" x 4.5" loaf pan.


4.      Place a layer of cookies onto bottom and sides of pan.


5.      Spread half of cream mixture into an even layer in the pan.


6.      Add two more layers of cookies.


7.      Spread a layer of cream onto the cookies.


8.      Add another layer of cookies, and repeat process until you use the full cream mixture.


9.      Cover with plastic wrap, and refrigerate overnight.


To Serve:

10.  Remove pan from refrigerator, and take off plastic cover. Place a long serving platter on top of the pan, and invert the loaf onto it.


11.  Drizzle chocolate sauce (or melted chocolate) onto the cake, and serve. Cake will store for up to 2 days in the refrigerator, covered.

Recipe adapted from Good Housekeeping 

Reporting Income From Vacation Property
Taxpayers who own summer rental properties have specific responsibilities when reporting income. They also have certain expenses that may deduct from their tax returns. Here are some tips for reporting income from rental properties:
Report Income and Expenses
If you rent your home, you may have to file multiple forms.
  • Schedule E: File Schedule E with your tax return when you report rental income.
  • Net Investment Income Tax: Determine whether your claims fall under the Net Investment Income Tax liability.
  • Schedule A: File Schedule A to report deductible expenses for personal use on the rental property.
When to File
If you rent your dwelling for fewer than 15 days a year, you do not need to claim the income on your tax return. For rentals that exceed this time frame , you need to report all income and expenses to the IRS.
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 IRS.gov

Use Words and Rhythm to Drop the Ball in the Cup

Sometimes, golfers just can't find the right rhythm when putting. Without smooth rhythm, jerky and abrupt movements drag the putter face's orientation at impact, and ultimately, the ball's speed. When the putt is longer, the challenges compound and require extra effort to drop the ball in the hole.

Fortunately, you can fix your putt by practicing your swing to the rhythm of three syllables: "perfect pace."
  • Take putter back: As you swing back, say the word per-fect in your mind, and align your swing to its 2-syllable rhythm. 
  • Swing putter through: When you swing forward, think the word pace in your mind. Align your swing to its 1-syllable rhythm.
No matter if you're practicing a short or long stroke, this exercise will help your swing support the right rhythm to drop your ball in the cup. Always remember: Focus on the process, not the outcome.

Tip courtesy of GolfDigest

Improve Your Sleep Quality

As people age, sleeping soundly can become more challenging, and interrupted sleep can be common. Waking up multiple times a night may be the result of physical discomforts, such as needing to use the bathroom or having joint pain. Fortunately, you can take some steps to help you enjoy a better night's sleep. Here are ways to improve your sleep quality, so you can slumber soundly all night.
  • Review your medications with your doctor: Sometimes, medications can affect our sleeping habits. If you are taking prescription drugs, you may want to talk with your doctor about any side effects that may affect your sleep patterns.
  • Limit drinking fluids before bedtime: Going to bed with a full bladder is a recipe for disrupted sleep. You can help avoid midnight bathroom trips by not drinking anything at least 2 hours before bedtime.
  • Shorten daytime napping: We can control our sleep cycles by better managing how long we nap during the day. Aim for naps that are 10 - 15 minutes, and stop napping altogether if you find that they keep you alert in the later evening.

Tip courtesy of Mayo Clinic

Cloth or Paper Towels?

For those wanting to choose the best eco-friendly towel for the cleaning job, a common conundrum is whether to use cloth or paper towels. Well, the answer isn't cut and dry. While you can reuse cloth towels rather than throw each one away, cleaning them does require energy consumption (electricity, water, etc). And if you don't properly store them, they can harbor bacteria. Meanwhile, paper towels require cutting down trees. Because they are disposable, the U.S. wastes 3,000 tons of paper towel each year.

Support your green living with a hybrid cleaning approach that also uses recycled paper towels.

When to Use Cloth Towels
  • Wiping dry clean dishes
  • Cleaning up spilled water
  • Clearing crumbs and dust from counters and shelves
  • Drying washed hands
When to Use Recycled Paper Towels
  • Cleaning up spilled messes that could spread germs or disease, such as raw eggs (salmonella).
  • Soaking up cooking greases from foods, such as bacon
  • Wiping surfaces that could carry germs, such as diaper-changing stations
  • Cleaning items that could be toxic, like used paintbrushes

Tip courtesy of Care2.com

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