Weekly Market Review - June 26, 2018

Weekly Market Review - June 26, 2018

by Chad Hassinger on Jun 26, 2018

Finance

By Bradley J. Rathe, AIF®
Chief Investment Officer

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

Weekly look back:
  1. Housing has been a pillar of strength for the economy since the last recession ended and currently it continues.   However, permits, normally the look into the future, have started to fall as interest rates have risen.
  2. The Philadelphia Fed Business outlook survey fell considerably to 19.9 down from an unsustainable high of 34.4.  New orders fell as well but still points to moderate growth going forward.
  3. Tariff talk is the main driver for market volatility.  Is this just posturing or is there more too it?  This will be the critical question over the next few weeks and currently seems to be about the only factor holding the market back.
Weekly look ahead:
  1. First Quarter final GDP is expected to give a final figure of 2.2%.  Conversely to the moderate growth in the first quarter; second quarter growth is expected to pick up materially.
  2. Durable goods are expected to fall as Industrials are starting to pull back from investing because of the uncertainty around trade.
  3. Core PCE (Personal Consumption Expenditures), the Federal Reserve's favorite inflation gauge, is expected to stay moderate.  The Federal Reserve is expected to raise rates two more times unless uncertainty continues to rise.
World Macro highlights for this week: 

Wednesday: Durable Goods, Pending Home Sales
Thursday: GDP
Friday: Personal Income and Spending, PCE Core Prices, Sentiment

2018 Yearly Index Returns as of 6/22/2018

S&P 500 

3.84%

Europe Equity

-4.46%

Emerging Equity

-6.02%

US 10 Yr

+.50 bp

US Small Cap Stocks

10.33%

 

Graph Of The Week

Higher mortgage rates have not dampened the strength of the housing market yet.

Thumbnail