Weekly Market Review - June 12, 2018

Chad Hassinger |
Categories
Finance

By Bradley J. Rathe
Chief Investment Officer

June 12, 2018

"Education is the most powerful weapon which you can use to change the world." Nelson Mandela

Weekly look back:
  1. Geopolitics are back in focus with G7 over the weekend and President Trumps meeting with the North Korean Leader.  Equity markets have been ignoring these types of risks lately.
  2. Productivity was less than expected and costs were more than expected.   This is the exact opposite of a normal healthy economy where we want to see increased productivity at similar or lower costs.
  3. Along with slow retail sales consumer credit has been lower than anticipated as well.  Lowering of consumer debt is overall considered a good thing however consumer spending is a large part of GDP so having weakness in this area is something we monitor closely.
Weekly look ahead:
  1. Central Banks will be the focus this week with the FOMC, BOJ and the ECB all giving rate announcements.  It is expected the Fed will raise rates by .25% to 2.00%.
  2. Inflation readings for both the Consumer (CPI) and the Producer (PPI) continue to be steady and are still running right at or slightly above the Federal Reserve goal of 2%, just enough to keep them from raising rates too quickly and stalling the economy.
  3. Retail Sales is anticipated to show ongoing moderate growth.  Macro data from housing to manufacturing has been strong, conversely consumer spending has been a laggard so far but we expect it to increase as the year progresses.
World Macro highlights for this week: 

Tuesday: CPI
Wednesday: PPI, FOMC meeting and Forecasts
Thursday: Retail Sales, ECB Announcement, Import and Export Prices

2018 Yearly Index Returns as of 5/18/2018

S&P 500 

4.64%

Europe Equity

-0.87%

Emerging Equity

-1.58%

US 10 Yr

+.58 bp

US Small Cap Stocks

9.48%

 

Graph Of The Week

Confidence is crucial for ongoing macro economic growth.  It has stayed elevated even with increased geopolitical risks which is a good sign for future growth.

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Unless otherwise expressly indicated, the opinions or views expressed in this article are the author's own and do not reflect, and may differ from, the opinions or views of Strategic Financial Group, LLC or others within Strategic Financial Group, LLC, including its officers, managers, owners, employees or other service providers.