Weekly Market Update
July 24, 2017
Presented By:  Todd Day, Portfolio Manager


Aging Bull Market?

The NASDAQ finally ended its winning streak on Friday after being higher for 10 straight days.  This was the longest winning streak since February of 2015.  It was still a winning week for the S&P 500 and NASDAQ.  The Dow was held back by Goldman Sachs, IBM, Home Depot and GE.

It was also another record-setting week for the S&P and NASDAQ, which have now had 27 and 41 record closes this year respectively.  One point I would make about the record-setting run for the S&P 500 is that the average return on the days the S&P has set a new high this year, the average gain was less than .5% and this does not indicate euphoria.   

Analysts see earnings as the catalyst for now, with another possible boost coming from Washington if Congress begins to work on tax reform in September.


Bank of America and Goldman Sachs both topped estimates boosted by higher rates, but some of the internals from this earnings report were very concerning to analysts.  Morgan Stanley has turned in the best results of all the major banks. 

Home Depot, Whirlpool and Lowes thought they couldn't be  Amazoned BUT - Sears announced that they would start selling Alexa controlled appliances on Amazon and shares in HD, LOW & WHR were hammered.   And everyone thought Sears was left for dead, I guess if you can't beat them, join them.

Harley Davidson beat on the top and bottom lines, but then cut 2017 motorcycle shipments by 6-8% and the stock was taken to the shed. 

Yet another company gets Amazoned.  Blue Apron, which is one of the "ingredient/recipe meal kit" companies made their IPO debut, but it's been all downhill from there after Amazon filed a trademark for a meal kit service.   The filing has the word mark "We do the prep. You be the chef."   One analyst downgraded Blue Apron to "you should have never gone public". 


As the summer has progressed, economic data has turned mixed to down, and last week was another example.  The Empire State Manufacturing survey lost some of its strength in June following a robust report in May and the Philly FED survey shows modest growth in June, below May's strong reading and expectations, but still in growth territory. 

Home-builder sentiment fell to an 8-month low as higher lumber costs, due to President Trump's tariffs on Canadian imports, as one factor pushing sentiment down.  Despite their sentiment falling, housing starts and building permits were better than expected. 

Finally, we did get a good number from the index of leading indicators, and it is not pointing to recession at this time.   


Across the pond, stocks took a push higher as the Euro rose sharply verse the U.S. Dollar, which helped stocks while pushing the Dollar to about a 10-month low.  The ECB did not raise rates and maintained they would remain in favor of further monetary accommodation.  Investors were concerned they would discuss tapering their purchases, but they said they would only discuss it later in the year.  E CB President, Mario Draghi did say the incoming economic data for the EU region was pointing to solid broad-based growth ahead.  

This will be a busy week ahead and a lot of event risks that could impact stocks and bonds, causing a lot of apprehension for investors.  First, we have 180 S&P companies  reporting this week, including Google, 3M, Cat, MCD, AT&T, Coke, Facebook, Verizon, Amazon and Exxon. 

Next on deck will be the FED meeting Tuesday and Wednesday with a rate announcement Wednesday at 2.  We don't expect them to make a change in rates.  

Probably, more interest will be focused on the White House risk, this week, as more noise about Russian meddling, Trump's son-in-law, Trump Jr., and former Trump campaign director, Paul Manafort all under some sort of scrutiny.  We'll see if traders and investors will tune out the noise and keep bidding this market higher. 
We have a good dose of economic data, including the first read on Q2 GDP, new & existing home sales, durable goods orders and consumer sentiment.

So, it's going to be a busy week ahead, stay safe in your travels and tune in next week for a wrap-up of July and a preview of August. 
"I think a hero is an extraordinary individual 
who finds the strength
to persevere and endure in spite of overwhelming obstacles."

-        Christopher Reeve
Peanutty Edamame and Noodle Salad


*    24 ounces shirataki noodles, rinsed and drained

*    3 cups edamame, shelled

*    2 cups corn

*    1/2 cup peanut butter

*    1/2 cup rice vinegar

*    1 tablespoons Sriracha hot sauce, plus an additional amount for serving

*    2 tablespoons water

*    1/2 teaspoon salt

*    3 cups carrots, shredded

*    1 pint grape tomatoes, halved

*    1 medium Granny Smith apple, quartered and sliced thinly

*    1/2 cup fresh cilantro, chopped


1.  Bring a large pot of water to boil.

2.  Toss in the shirataki noodles, edamame, and corn. Boil for 2 minutes, and then rinse and drain the noodles.

3.  Whisk the peanut butter, hot sauce, rice vinegar, water, and salt in a 

large bowl.

4.  Add carrots, tomatoes, apple slices, cilantro, and noodle mixture into 

the bowl.

5.  Toss the items together until completely combined.

6.  Serve with the Sriracha hot sauce.


Recipe adapted from Good Housekeeping

Manage Your Tax Liabilities With an Installment Agreement
When you owe substantial tax funds, an installment agreement can help you settle your debt with the IRS. Here's some insight into how the agreement works.
How do you enter an Installment Agreement?
You must first file all your required tax returns and supporting documents. From there, you can apply online to enter an installment agreement through the IRS Online Payment Agreement tool.
How do the payments work?
If the IRS approves your installment agreement, you will make a required payment each month until you settle your debt.
Who is eligible?
Individuals and businesses can both enter an Installment Agreement, if approved.

*    Individuals: Owe $50,000 or less, including combined taxes, penalties, 

and interest.

*   Businesses: Owe $25,000 or less in the current or previous filing year, including combined taxes, penalties, and interest.

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

Practice Your Rhythm With the Driver
Losing control of your ball? Not solidly hitting? More than likely, you're hitting the ball with a backswing that's faster than your downswing. To improve your shot, you need to find your rhythm so you gain speed without sacrificing contact. In short, you need to finish your backswing.
Rather than impact the ball in a weak position that relies on your hands and arms, you need to wind up your power from behind the ball. The goal is to make sure your swing remains smooth and deliberate.
Fine-Tune Your Drive
To practice finding your rhythm, focus on your swing's speed and control with the following technique:
Step 1: Tee up three balls in a row.
Step 2: Hit the first ball.
Step 3: Step up immediately to the next ball, and hit it without pausing.
Step 4: Step up again, and immediately hit the next ball.
Step 5: Repeat the sequence, without taking breaks in-between each swing.
This back-to-back practice will help you stay in balance without over-swinging, and internalize  your rhythm and flow. Concentrating on this feeling will enable you to hit more shots in the center of the clubface and maximize your speed.

Tip courtesy of Golf Digest

Improve Your Bone Health With These Exercises
As we age, our bone health can decrease and result in osteoporosis. And the condition is widespread: In the U.S., 54 million Americans suffer from low bone density or osteoporosis. [i] While encouraging strong bones earlier in life is important for avoiding osteoporosis, you can take steps today to improve your bone health. Here are some helpful exercise tips for you to keep in mind:

Engage in weight-bearing exercises: When we stand, the force of gravity on our legs and feet encourages our bodies to build more cells, thus strengthening our bones. Of course, consult your doctor to ensure any exercises support your specific health condition.


Dance more: When you dance, you increase your pulse and remain on your feet. Dancing provides a well-rounded workout and strengthens your heart, muscles, and bones.


* Improve your balance: Falling and shattering bones is a real problem with osteoporosis. You can help avoid this catastrophe by exercising in ways that focus on improving your balance, such as Tai Chi.

Tip courtesy of WebMD

Minimize Water Consumption by Reusing Rain Water
Using rainwater for daily household chores can help cut down on your water bill and conserve how much tap water you consume. Generally, rain water is clean and safe to use for both indoor and outdoor water needs. Rainwater that hasn't run down your house's roof typically has less chemicals than the treated water you purchase in your utilities. To help reduce your utility water consumption, here are some ways to reuse rain water at home:

Water your yard and gardens: Rain barrels are a popular way to collect rainwater for watering lawns and gardens, and you can also connect them to an irrigation system. Planting garden beds along your driveway's edge or at the bottom of a hill can also use rain's natural flow to keep the plants watered.


* Flush your toilet: In America, toilets use nearly 27% of our home water usage. You can swap some of this consumption by rerouting rainwater to your toilet. To do so, install piping that connects rainwater to your toilet's plumbing.


* Wash automobiles and equipment: When you don't treat the rainwater, it's also great to use for washing vehicles and equipment like garden tools.


Tip courtesy of Care2.com

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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

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 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 indexes 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.


The Housing Market Index (HMI) is a weighted average of separate diffusion indices based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. Each resulting index is then seasonally adjusted and weighted to produce the HMI.


The Pending Home Sales Index, a leading indicator of housing activity,  measures housing contract activity, and is based on signed real estate contracts for existing single-family homes, condos and co-ops.  The PHSI looks at the monthly relationship between existing-home sale contracts and transaction closings over the last four years. The results are weighted to produce the index.


The Chicago Board Options Exchange Market Volatility Index (VIX) is a weighted measure of the implied S&P 500 volatility. VIX is quoted in percentage points and translates, roughly, to the expected movement in the S&P 500 index over the upcoming 30-day period, which is then annualized.


The BLS Consumer Price Indexes (CPI) produces monthly data on changes in the prices paid by urban consumers for a representative basket of goods and services. Survey responses are seasonally adjusted and weighted to produce a composite index.


The Conference Board Leading Economic Index (LEI) is a composite economic index formed by averages of several individual leading economic indicators, which are weighted to produce the complete index.


Google 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.

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 Horizon Financial Services, LLC, and should not be construed as investment advice. Neither Horizon Financial Services, LLC nor its Investment Advisor Representatives or Associates 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. 

John Brais, Owner & Founder
Investment Advisor Representative
Certified Retirement Financial Advisor
Horizon Financial Services, LLC
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Winston Salem, NC 27103
(336) 659-7060


Investment advisory services are offered through Horizon Financial Services, LLC, a North Carolina State Registered Investment Advisor.  Insurance products are offered through 

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