Last week, stocks started the abbreviated trading week on a down note, but things turned around heading into Thursday and Friday, pushing the major benchmarks to record highs. Equity prices closed higher on Friday, June 2, following a non-farm payrolls report that showed a weaker-than-expected 138,000 jobs were created in May (versus consensus of 185,000). Logic holds that stock prices would move lower on such news. However, the (negative) new jobs portion of the report was counterbalanced by lower unemployment and (almost undetectable) wage inflation. In essence, news is mixed and markets are maintaining their resilience.

Click here to read more

 

Last Friday, stocks reached record highs (again) on a better-than-expected nonfarm payrolls report. The 10-year Treasury yield also rose for most of the week following reassurance by the Federal Reserve that it remains on pace with planned interest rate hikes. Friday’s employment report was expected to show 185,000 new jobs added in the month of April but, surprisingly, the numbers came in at 211,000 jobs for the period. This favorable outcome was enough to offset economic concerns prompted by a weaker than expected GDP report. Washington was in on the action with an agreement to fund the Federal Government through September, and a victory in the House to repeal-and-replace the Affordable Care Act. Other items on President Trump’s agenda seem to be gaining traction; market-friendly tax reform and infrastructure spending could bolster the economy and begin adding to the GDP.

Click here to read more

No matter where you turn, everyone is predicting the next market top. So-called ‘experts’, CNBC, cab drivers and the list goes on.  Particularly, when watching pundits who report on market conditions, you hear the banal repetition of “we’ve run too far, too fast” and “valuations are too high” or the ever popular, “rising interest rates will end the equity party”.  When it comes to gaining listeners and selling advertising, the media knows that fear sells. As an investor, you must have a healthy skepticism, because occasionally, some good information can be gleaned from the media.  Nevertheless, their job is making money for the networks at your expense.  Suppose we remove the noise (media) and consider what the market is saying; interest rates relative to stock prices and what indications (if any) alert us to a market top.

Click here to read more

 

 

America was highly attuned to the U.S. political backdrop last week as Donald J. Trump was sworn in as the nation’s 45th president. Investors are betting that President Trump will deliver on some of his pro-growth policies.  He is focused on several things, taxes being at the top of that list.  Still, financial markets were rattled (only slightly) by his comments that some parts of the tax plan are “too complicated” and the U.S. dollar is “too strong.”  Nevertheless, 8 of the 11 sectors in the S&P 500 Index traded higher last week.

Click here to read more

There are many benefits to marriage, but one you may not yet have considered is the flexibility married couples enjoy when deciding how and when to claim Social Security. Even though the basic rules apply to everyone, a couple has more options than a single person because each member of a couple1 can claim at different dates, and may be eligible for spousal benefits.

Click here to read more

Fidelity Viewpoints

Heading into the holiday weekend, stocks rose slightly on Friday amid low volume, the Dow managed its seventh consecutive weekly gain. Only three days of trading remain in 2016 and investors are optimistic for a solid finish without sizeable deterioration.  In recent weeks, however, the market has moved into what we call a bullish pennant formation. This setup usually resolves in prices moving higher but our medium-term indicators are overbought and seem to be flashing a sign of caution.  A pause or pullback should not be ruled out at this point.  Perhaps the most asked question is what is driving this market?

Click here to read more

For much of the last decade, inflation has been low by historical standards. But, recently, wage growth and higher prices have sent signs that inflation may be making a comeback, serving as a reminder of the risks that come when the buying power of a dollar falls. Such risks always exist, even when they don’t seem so obvious.For much of the last decade, inflation has been low by historical standards. But, recently, wage growth and higher prices have sent signs that inflation may be making a comeback, serving as a reminder of the risks that come when the buying power of a dollar falls. Such risks always exist, even when they don’t seem so obvious.

Click here to read more

Fidelity Viewpoints

Stocks had one of their best performances in years, with increases of 5.4% for the Dow, and 3.8% for both the Nasdaq and S&P 500, following the election of Donald Trump as U.S. President. Widespread pre-election forecasts from investment banks were nearly universal for sizeable losses following a Trump victory; built on the premise that tariffs and scrapped trade deals would hurt the U.S. economy. While futures sold off hard during the election and into the early hours of the following day, losses were quickly erased. Pundits from everywhere were puzzled by the outcome and the so-called “Trump Trade”. Nevertheless, the surprise Republican sweep as well as toned-down rhetoric on the part of both candidates, appeared to be behind the market’s bullish tone. Perhaps the largest disappointment among investors is the unevenness of sector participation.

Click here to read more

Election 2016 is in the rear-view mirror and, unexpectedly, Donald Trump was successful in his bid for the White House. This election was unique in many ways; unusually consequential in that it challenged the Washington status quo.  Additionally, it seems that America is trying to say something about the condition of our balance sheet.  In many ways, we should not be surprised by the outcome of this election.  In her concession speech, Hillary Clinton said “Last night I congratulated Donald Trump and offered to work with him on behalf of our country. We owe him an open mind and the chance to lead. Our constitutional democracy enshrines the peaceful transfer of power, and we don’t just respect that, we cherish it.”

Click here to read more