Portfolio Advisory Council, LLC presents:
 

 

THE WEEKLY ECONOMIC UPDATE

 

September 21, 2020 

 
 
QUOTE OF THE WEEK

"When we lose the right to be different, we lose the privilege to be free."

CHARLES EVAN HUGHES, 
Former Chief Justice of Supreme Court

"The great thing in the world is not so much where we stand, as in what direction we are moving."

OLIVER WENDELL HOLMES JR., 
Supreme Court Justice


THE WEEK ON WALL STREET

Stocks slipped as the technology sector remained under pressure and a mid-week announcement by the Federal Reserve failed to inspire investors.

The Dow Jones Industrial Average declined 0.03%, while the Standard & Poor's 500 fell 0.64%. The Nasdaq Composite index dropped 0.56% for the week. The MSCI EAFE index, which tracks developed overseas stock markets, rose 0.75%.1,2,3

Technology Pulls Stocks Lower

As has been the case in recent weeks, technology stocks led the market higher, then lower in an otherwise turbulent week of trading.

Merger and acquisition activity announced at the start of the week generated a rush back into technology stocks, sparking a rebound from the previous week's drop. Stocks continued to advance until Wednesday, when investors began to digest comments from the Fed's Federal Open Market Committee meeting. The Fed delivered a message that coupled assurances of continued low rates with concerns about the health of the economic recovery.4

The Fed Stays the Course

In the last Federal Open Market Committee (FOMC) meeting before the November election, the Fed signaled that interest rates would not be increased "until labor market conditions have reached levels consistent with the committee's assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time."
4

Most Fed officials do not see this happening until 2023.

While the Fed maintained its view on the importance of fiscal stimulus to help American workers and businesses, it did improve its outlook for unemployment in its latest economic outlook. The Fed now expects unemployment would average around 7-8% in the final three months of the year, down from its June prediction of around 9-10%.5
 
 

BY THE NUMBER$

AS LONG AS RATES STAY LOW - The average interest rate that the US government pays on its interest-bearing debt as of 8/31/20 was 1.795%, down from 2.331% as of 12/31/15. That means our government can borrow 29.9% more money today than it borrowed 5 years ago and still have the same out-of-pocket interest expense cost (source: Treasury Department).  
 
BACK IN BUSINESS - US ports received ships carrying 2.06 million containers loaded with cargo during the month of August 2020. That's the largest number ever recorded. (source: National Retail Federation Global Port Tracker).
 
MONDAY NIGHT TV - The first "Monday Night Football" game was played on 9/21/70 or 50 years ago today. The Cleveland Browns beat the New York Jets 31-21. The TV broadcast team included Keith Jackson, Howard Cosell and Don Meredith. Jackson was replaced a year later by Frank Gifford (source: Sports Illustrated). 6
 
 
THE WEEK AHEAD: KEY ECONOMIC DATA

Tuesday: Existing Home Sales.

Thursday: Jobless Claims. New Home Sales.

Friday: Durable Goods Orders.

Source: Econoday, September 18, 2020

The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.
 

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS

Tuesday: Nike (NKE), Autozone (AZO), Fedex (FDX).

Wednesday: General Mills (GIS).

Thursday: Costco Wholesale (COST), Darden Restaurants (DRI), Carnival Corp. (CCL).

Source: Zacks, September 18, 2020

Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Investing involves risks, and investment decisions should be based on your own goals, time horizon, and tolerance for risk. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.
 
 
 
 
THE WEEKLY RIDDLE
 
A family has a mother, father, and four daughters. Each daughter has one brother. How many people are in the family?
 
LAST WEEK'S RIDDLE: A plastic bottle filled with cola weighs one liter. What do you need to add to it to make it weigh less than two ounces?
ANSWER: Add a hole to it.
 
 


Portfolio Advisory Council, LLC
A Registered Investment Advisory Since 1986
             
Investment advisory services offered through Portfolio Advisory Council, LLC, and an SEC Registered Investment Adviser.
 
We cannot accept trade orders through e-mail. Important letters, e-mail, or fax messages should be confirmed by calling 713.574.6015.  This email service may not be monitored every day, or after normal business hours.  

James W. Hamilton, CFS, AIF
713.574.6025
 
W. Thomas Sutton  CFP(R), ChFC, CLU
713.574.6020
 
Philip B. Moran, MBA, ChFC, CFP(R), AIF
713.574.6030
 
John C. Husbands

Visit us at www.pac1000.com 



This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. The information herein has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is a market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor's 500 (S&P 500) is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the "NYSE") and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world's largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions - the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. MarketingPro, Inc. is not affiliated with any person or firm that may be providing this information to you. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.


CITATIONS:

1. The Wall Street Journal, September 18, 2020
2. The Wall Street Journal, September 18, 2020
3. The Wall Street Journal, September 18, 2020
4. The Wall Street Journal, September 16, 2020

5. The Wall Street Journal, September 16, 2020
6. 
Reproduction Prohibited without Express Permission - Copyright © 2011 Michael A. Higley

CHART CITATIONS:
The Wall Street Journal, September 18, 2020
The Wall Street Journal, September 18, 2020

treasury.gov, September 18, 2020