Weekly Market Review - July 12, 2018

Weekly Market Review - July 12, 2018

by Chad Hassinger on Jul 12, 2018

Finance

By Bradley J. Rathe, AIF®
Chief Investment Officer

"Art, freedom and creativity will change society faster than politics." Victor Pinchuk

Weekly look back:
  1. Both ISM Manufacturing and ISM Services were reported last week and both advanced more than expected which is a good sign for ongoing economic strength.
  2. In the jobs report last week the unemployment rate rose to 4% as people are coming back into the workforce. Conversely, the payrolls were very strong at 213k.  Hourly earnings are still not moving up as quick as most hope with only a .2% increase.
  3. Recently, according to Lipper data, you have seen sizable mutual fund outflows especially from International equity funds.  Many times this is a good indicator of a bottom for that market.
Weekly look ahead:
  1. Quantitative Easing is coming to an end and the Federal Reserve is starting to unwind its balance sheet. Currently it is at $4.2 Trillion dollars and the change will be announced this week.
  2. We have both Consumer and Producer inflation data this week and expectations are for continued moderate inflation.  The worry is for future inflation data as tariffs were initiated on July 6th and the worry on any future tariffs that are implemented.
  3. Consumer Credit is going to be released this week.  Increasing revolving credit as we have seen is normally a good indicator for future consumer spending however with the increasing debt levels is becoming a bigger concern.
World Macro highlights for this week: 

Wednesday: PPI
Thursday: CPI, Fed Balance Sheet
Friday: Consumer Sentiment, Import and Export Price

2018 Yearly Index Returns as of 7/06/2018

S&P 500 

4.07%

Europe Equity

-1.04%

Emerging Equity

-7.21%

US 10 Yr

+.41 bp

US Small Cap Stocks

11.02%

 

Graph Of The Week

Economic strength and a solid jobs numbers continue to keep Sentiment high.

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