Weekly Economic Update

Economic Update 12-27-2017

Economic releases last week consisted of very strong results in housing and manufacturing, as well as the broad measure of leading economic indicators, mixed results from personal income/spending and durable goods orders and slightly worse sentiment and jobless claims.

U.S. equities gained with tax reform efforts wrapping up, which boosted pre-Holiday sentiment.  Foreign equities outperformed with help from a weaker dollar.  Bonds generally lost ground as interest rates gained across the curve.  Commodities also rose slightly, along with the price of crude oil.

U.S. stocks gained on the week as tax reform made its final strides through the legislative process, slated to take effect Jan. 1, although most volume occurred earlier in the week.  From a sector standpoint, energy experienced sharp gains in keeping with higher prices for crude oil.  Utilities lagged with negative returns on the week, with higher interest rates and perhaps various aspects of the new tax bill which do not favor the utilities sector.  Interestingly, a sharp drop in the price of Bitcoin over the past week, nearing a third of its value, did not appear to carry over to other financial markets. Continue reading

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Weekly Economic Update

Economic Update 12-18-2017

  • Economic activity for the week centered on the Federal Reserve, which raised short-term interest rates another quarter-percent, as expected.  Retail sales gained more sharply than expected, while industrial results were mixed and inflation came in weaker than consensus though several measures.  Labor force gains remain robust.
  • U.S. equities gain for the week, with positive sentiment related to tax reform.  Foreign markets were mixed on net, falling behind U.S. stocks for the week with little change in the dollar.  Bonds on net made slight gains, with the treasury yield curve flattening further.  Commodities were generally little changed with crude oil experiencing a quieter week.

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Fed Note

Fed Note:

The December FOMC meeting was considered one in the ‘important’ category, in that additional materials were released, a press conference was scheduled afterward, as well as it being the last of the year.  Based on economic and inflation data released over the past few weeks, odds of a rate hike had moved to nearly 99%, and the Fed didn’t disappoint.  For the third time this year, the rate on fed funds were raised by +0.25% to a new range of 1.25-1.50%.

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Weekly Economic Update

Economic Update 12-12-2017

  • Economic releases were mixed on the week, with weaker results in non-manufacturing ISM, factory orders and lower sentiment.  On the other hand, labor markets continued to perform, with jobless claims running at cyclical low levels and the monthly employment situation report coming in stronger than expected.
  • U.S. stocks gained for the week, as did developed foreign markets despite the tempering influence of a stronger dollar.  Bonds were generally flat, while commodities also fell due to the dollar’s strength coupled with other specific factors.

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Weekly Economic Update

Economic Update 12-04-2017

  • Economic data released last week included an upward revision in 3rdquarter GDP, a dip in the ISM manufacturing index, a recovery in various housing metrics and higher levels of consumer confidence.
  • U.S. equity markets rose sharply during the week, outperforming foreign stocks, which lost ground.  Bonds were little changed on net with interest rates mixed across the yield curve.  Commodity prices fell, with declines in several key segments, including oil and metals.

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Weekly Economic Update

Economic Update 11-27-2017

  • On a shortened Thanksgiving week, the few economic reports that surfaced were mixed, with slightly weaker durable goods orders, while existing home sales and jobless claims were positive, and the index of leading economic indicators was quite strong.
  • Global equity markets fared positively, with U.S. small caps and foreign stocks faring well on the heels of a weaker dollar.  Bonds ended up with slight gains as interest rates ticked downward slightly, with foreign bonds faring better.  Commodity indexes were higher as crude oil rose to its highest price in over two years.

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Weekly Economic Update

Economic Update 11-20-2017

 

  • Economic data for the week was highlighted by stronger retail sales, mixed-but-still-strong manufacturing and industrial production results, along with slightly higher inflation.  Homebuilder sentiment improved, while jobless claims remained very low.
  • U.S. equity markets were mixed with small caps outperforming large caps.  Emerging market stocks similarly outperformed developed market equities.  Bonds achieved positive gains, while foreign bonds were helped by a weaker dollar.  Commodities lost a bit of ground with crude oil prices ending flat for the week.

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Weekly Economic Update

Economic Update 11-13-2017

  • In a very light week for economic data, highlights included continued strong job openings data, while claims ticked upward due to temporary weather impacts.  Consumer sentiment also ticked downward a bit.
  • U.S. and foreign equity markets lost ground for the first week in several as sentiment soured, although emerging markets gained.  Bonds were also down across the board, although a weaker dollar helped foreign stocks and bonds somewhat.  Commodities gained as energy prices again moved higher.

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Weekly Economic Updates

Economic Update 11-06-2017

  • Economic news for the week was dominated by a Fed meeting that resulted in no policy change, mixed manufacturing results, stronger optimism and a below-par employment situation report—several releases continue to demonstrate the effects of recent hurricanes.
  • Equities continued their run of success, with gains in the U.S. and foreign markets, on the back of strong earnings and economic growth.  Bonds also fared well as rates decreased.  Commodities gained on the week, in keeping with higher oil demand and lower production.

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LSA Trade Dates

LSA Revisions – November 2017

Mutual Fund & ETF Model Revisions – (Inclusive of the NTF Models):  Please make sure to login to the LSA website to review all revisions and the investment rationale.

LSA Trade Dates This Week, and Investment Rationale:

ETF and ETF TACTICAL models – targeted trade date – Tuesday, November 7th

Private Client Blended – targeted trade date – Wednesday, November 8th

Private Client Traditional – targeted trade date – Thursday, November 9th

Private Client – targeted trade date – Friday, November 10th

**** Private Client Tax Efficient will NOT trade during Capital Gains season ***

Model Revisions Posting This Week:

Monday, November 6th: Bear Market Entry, Cautious Bear Plus, Private Client Less Than $100k, Private Client Income – targeted trade date – Monday, November 13th

Tuesday, November 7th: American Funds, Fidelity, Vanguard– targeted trade date – Tuesday, November 14th

Wednesday, November 8th: SRI: Socially Responsible – targeted trade date – Wednesday, November 15th

Thursday, November 9th: DFA and DFA Blended – targeted trade date – Thursday, November 16th

Friday, November 10th: Jackson National Elite Access and VOYA Select Advantage – targeted trade date – Thursday, November 17th

*As a reminder, the Revision Explanation Presentation/Video is posted in the “News & Announcements,” section on the LSA Beta home page and will be posted at the end of the business day on the targeted posted date.

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Fed Note

Fed Note:

The November FOMC meeting was anticipated to be a minor affair, in that no actions were expected in terms of policy change, nor was there a press conference scheduled afterward.  This played out exactly as such.

The formal statement reflected the status quo, with the committee describing economic activity as rising at a ‘solid rate’ (while acknowledging the hurricane disruptions).  Also noted were growth in household spending as well as business fixed investment.  Core inflation was described as ‘soft’, excluding the effects of gasoline price increases related to the hurricanes.  All-in-all, little changed, but the assessment was generally positive, pointing to a continuation of current policy, which could likely be another rate hike in December.

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LSA Model Revisions

LSA MODEL PORTFOLIO REVISION TRADE SCHEDULE

LSA will begin making revisions to many of the model portfolios over the next several weeks. Please note the date that the revisions will be posted to the website.

***ALL trade dates will be ONE WEEK later than the post date.

REVISIONS POSTED:

Tuesday, October 31st: ETF and ETF TACTICAL models

Wednesday, November 1st: Private Client Blended

Thursday, November 2nd: Private Client Traditional

Friday, November 3rd: Private Client

Monday, November 6th: Bear Market Entry, Cautious Bear Plus, Private Client Less Than $100k, Private Client Income

**** Private Client Tax Efficient will NOT trade during Capital Gains season ***

Tuesday, November 7th: American Funds, Fidelity, Vanguard

Wednesday, November 8th: SRI: Socially Responsible

Thursday, November 9th: DFA and DFA Blended

Friday, November 10th: Jackson National Elite Access and VOYA Select Advantage

** The revision explanation will be posted to the LSA website tomorrow.

If you have any questions, please contact us and we’ll be happy to help.

The LSA Team

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