Weekly Market Update
June 12, 2017
Presented By:  Todd Day, Portfolio Manager



Recently, I have written about "The Teflon Market" & "New Highs Yet Again", and before the opening bell on Friday, I was once again pondering what to say about more new highs.  On Friday, shortly after the opening bell, the S&P 500, the Dow, NASDAQ and Russell 2000 all hit new intra-day highs. 

But something changed - and it changed quickly! 

The NASDAQ proceeded to sell off nearly 2% for the day.  Now, it is still up more than 15% year-to-date, so you think, no big deal, but something changed.  
Remember last week's market update where I said - "You HAVE to think there will be some correction, the question is when, what causes it and how much do we correct.  Those are the million dollar questions...."

A lot happened last week that could have rocked the markets - the British elections, the ECB and the Comey testimony, but the markets yawned right through it and pushed the major indices higher. Bull markets may trick gravity for a while, but eventually they cannot defy common sense. 

The markets have been concerned Congress and the White House will be too preoccupied with the noise to push tax reform and other stimulus programs through.  Could this be the impetus?  We will have to see how the next several days/weeks unfold before we can figure that out, but what we want to see is a renewed discussion on elements of tax reform and other stimulus programs. 


It was a quiet week, thank goodness, for economic data. 

The latest Job openings and labor turnover report (JOLTS), and the ISM non-manufacturing employment gauge and temporary hiring figures all suggest a robust labor market.  But, payroll gains are slowing when employers want to hire?   This is a sign of supply constraints limiting job creation, rather than weaker demand.  The U.S. seems to be running out of homes and workers.


Across the pond, stocks were mostly down across the Eurozone except for London's FTSE.  Think about it, you had the London terrorist attack followed by British Prime Minister Theresa May gambling her political position from a position of strength, or  so she thought. What has transpired is a "shocking" election result that lands the U.K. in what is known as a "hung parliament". What that means is that no party has gained an outright majority, and coalitions must now be worked out in order for a new government to be formed.  What you get - fresh new highs!  Go figure...

Oh, and I don't really know if any election result anywhere on the planet can still be called "shocking".

We also saw that the ECB leaves rates unchanged, but they did drop the reference to lowering rates, and that's a positive for the EU's economy.

Across the other pond, stocks finished mostly lower on the week despite some decent data. 


First and foremost on my watch list this week is going to be the "tech selloff".  Following Apple's downgrade on Sunday evening, will investors continue to ring the register on the tech names or will there be cause for pause. 

Secondly, the FED - It's widely expected they will raise rates.  What they say about future rate hikes and what they say about reducing their balance sheet will be what analysts and the markets focus on. 

Lastly, it would be nice to go a week without political or geopolitical turmoil - I know, but we can always wish.

Stay wary, alert and very, very nimble!
"Go to the edge of the cliff and jump off. Build your wings on the way down."

- Ray Bradbury
Spanish Garlic Shrimp

A zesty take on a seafood favorite!

2 tablespoons olive oil
1 cup bell pepper, chopped
1 cup onion, chopped
1/2 cup chicken broth
2 tablespoons garlic, minced
2 tablespoons lemon juice
 2 tablespoons sherry or water, with 2 tablespoons flour added
1/4 teaspoon paprika
1/2 lb. large shrimp, peeled


1.   Heat olive oil in large nonstick pan on medium-high.
2.   Mix in onion and bell peppers, and sauté for 4 minutes.
3.   Add remaining ingredients, but don't include the shrimp.
4.  Bring ingredients to simmer, cooking for 2 minutes.
5.  Toss shrimp into the pan and cook for about 2 minutes (or until shrimp are no longer transparent), stirring constantly.
6.  Serve shrimp dish over saffron, risotto or yellow rice.

Recipe adapted from Good Housekeeping 
Tips for Safeguarding Your Passwords

As we do more and more of our daily activities online, including filing taxes, we become more vulnerable to security compromises, such as breached data and identity theft. A key item that can put you at risk is the vulnerability of your passwords. Here are tips for taking better steps to safeguard your passwords to protect your important data.
1. Create long passwords
Breaking into a long password is more difficult to do than one with just a few characters and numbers. As such, you should create passwords that have a minimum of 8 characters.
2. Use combinations of characters and capitalization  characters
Sometimes companies will control what types of characters you can use. When you have the freedom to choose a variety of characters, you can create a secure password using a combination of the following:

*   letters
* symbols
You should also vary using capitalized and lowercase letters. Be sure to include at the minimum one uppercase and one lowercase letter.
3. Avoid personal information
While details such as your children's name or pet can be memorable, they make guessing your password easy for criminals. Avoid using any personally identifying information in your chosen password.
Other details 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.

Fix Your Slice: Avoid Parallax

Slicing the ball is all too common for golfers. And when they try to use their instincts to overcome the challenge, they often hit the ball even farther right. One way to fix your slice is to avoid parallax.

Though golfers focus on the target, many actually align to the left. Because of parallax, golfers swing further left, try to pull the ball to hit their target, and end up opening their clubface to the incorrect path at impact. The result? A slice.
You can overcome parallax by having an intermediate target.
To do so:

1.   Stand behind the ball.

2.   Look down your target line by 3- to 5 feet and choose a spot.

3.   Square your club face to your chosen spot.

4.   Make your body perpendicular to the face.

5.   Put trust into your aim and start your ball just to the right of your     intermediate target.

6.   Close your clubface at impact by hitting from the inside.

The result from this exercise is a draw, and should put your ball correctly on target.
  Tip courtesy of GolfDigest
Tips for Managing a Cough

Trying to keep a cough at bay can be incredibly challenging and debilitating, no matter how intense the cough is. You can usually manage a cough from things like seasonal allergies and common colds at home. Here are some key ways to control your cough and find some relief.

*   Consume enough water: If you have mucous when you cough, you probably have postnasal drip. You can thin the mucous by drinking more water. Doing so also helps you moisten your mucous membranes, which can further help you control your cough.


*   Drink warm tea with honey: Some clinical research suggests that drinking hot tea with honey will help soothe your throat from coughing.


*   Use a humidifier: If your home is particularly dry, having a humidifier running can help you add important moisture back into the air. You'll want to make sure you clean it out regularly, though, as they can breed fungus, mold, and bacteria, and pump these back into the air.

Tip courtesy of WebMD

Don't Dump These Items Down the Drain
Pouring leftover items down the drain can be tempting, since it's easy to dump and watch the flow go down. But flushing things down to the toilet and pouring liquids into sinks, can introduce a slew of toxins into our streams and waterways.  You can help the environment by avoiding dumping these common items down the drain:
Greasy foods to avoid in your sink drains

*   Meat fats

*   Cooking oils

*   Butter or margarine

*   Sauces

*   Dairy products

Other items to avoid in your sink drains and toilets

*   Coffee grinds

*   Prescription pills

*   Flushable cat litter

*   Motor oils or transmission fluids

*   Nail polish and polish remover

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.


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