Given the desire to travel and live well, the first few years of retirement may be expensive ones. Before and during those years, be mindful of economic and market cycles. They could affect your portfolio, and, by extension, your plans.
BLUE CHIPS HIT ALL-TIME HIGHS
Donald Trump’s unexpected presidential election win did not rattle Wall Street. Instead, bulls saw the prospect of greater federal outlays and less business regulation in the near future. The Dow Jones Industrial Average closed at a new record Friday: 18,847.66. The Dow 30 had its finest week since 2011, gaining 5.36%. As for the S&P 500, it advanced 3.80% in five days to 2,164.45. Settling at 5,237.11 Friday, the Nasdaq Composite rose 3.78% on the week.1,2
FED’s FISCHER: TIME FOR GRADUAL TIGHTENING
Stating that the central bank “appears reasonably close to achieving both inflation and employment components of its mandate,” Federal Reserve vice chairman Stanley Fischer noted Friday that “the case for (raising interest rates) gradually is quite strong, keeping in mind that the future is uncertain and that monetary policy is not a preset course.” Some analysts believe sizable infrastructure spending under a Trump administration could spur inflation. On Friday, Fed fund futures contracts implied an 81% chance of a hike at the central bank’s December meeting.3
CONSUMER SENTIMENT ROSE BEFORE ELECTION
Displaying a reading of 91.6, the University of Michigan’s preliminary November household sentiment index climbed 4.4 points off its final October mark. Analysts polled by Bloomberg forecast an initial November reading of 87.9 for the gauge.4
CRUDE, GOLD PRICES DECLINE
As Wall Street rallied, key commodities had a tough week. Oil and gold were among them. The yellow metal settled at $1,227.40 an ounce on the COMEX Friday, leaving it down 3.75% at the end of this second week of the month. Oil ended the week at $43.12 a barrel on the NYMEX; it has sunk 7.78% so far in November.5
Advance Auto Parts and Smart & Final present Q3 results Monday. October retail sales numbers arrive Tuesday, plus earnings from Agilent Technologies, Aramark, Beazer Homes, Dick’s Sporting Goods, Diebold, and Home Depot. Wednesday, investors consider earnings from Cisco, L Brands, Lowe’s, NetApp, and Target, plus the October Producer Price Index. Thursday, Federal Reserve chair Janet Yellen testifies on the economic outlook in Congress, the October Consumer Price Index is released, October groundbreaking and building permit numbers are announced, and America’s Car-Mart, Applied Materials, Best Buy, Bon-Ton, Gap, Intuit, J.M. Smucker, Ross Stores, Spectrum Brands, Staples, Stein Mart, Walmart, and Williams-Sonoma offer earnings. Abercrombie & Fitch and Foot Locker announce Q3 results Friday.
Sources: wsj.com, bigcharts.com, treasury.gov – 11/11/162,6,7,8
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends. 10-year TIPS real yield = projected return at maturity given expected inflation.
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This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.
1 – reuters.com/article/us-usa-stocks-idUSKBN13619K [11/11/16]
2 – markets.wsj.com/us [11/11/16]
3 – usatoday.com/story/money/2016/11/11/fischer-case-gradual-rate-hikes-quite-strong/93618568/ [11/11/16]
4 – bloomberg.com/news/articles/2016-11-11/u-s-consumer-sentiment-hits-five-month-high-before-election [11/11/16]
5 – money.cnn.com/data/commodities/ [11/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F10%2F15&x=0&y=0 [11/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F10%2F15&x=0&y=0 [11/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F10%2F15&x=0&y=0 [11/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F10%2F11&x=0&y=0 [11/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F10%2F11&x=0&y=0 [11/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F10%2F11&x=0&y=0 [11/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=11%2F10%2F06&x=0&y=0 [11/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=11%2F10%2F06&x=0&y=0 [11/11/16]
6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=11%2F10%2F06&x=0&y=0 [11/11/16]
7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [11/11/16]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [11/11/16]
Topics: Weekly Economic Update