Patience is a virtue...man is it hard to have at times!
We are seeing a number of "signs" from a technical perspective that are demonstrating warnings and caution. I know it seems like this message has been played and replayed over and over and over again and believe me, I wish I could change the tune! The number one comment I received in the wake of the 2008-2009 crash was "Someone should have seen this coming!" Well, they did, but getting investors to listen and heed the warnings is a horse of a different color.
We have begun again to see the technical indicators for the S&P 500 and DJIA capitulate. They have both retreated below their 50 days moving average and have been unable to rise back above it for any sustainable length of time. The volume is not present to sustain a rally. The relative strength levels are also dropping and unable to rally higher for any sustainable time period.
Buying pressure is at 103 and when compared to the lowest point in the last 10 years of 85, it stands to confirm that the buying is simply not strong at all. The only saving grace right now is that the sellers have yet to show up. We can plainly see this in the selling pressure being at a measly 267 currently when compared to the high point of 919 in 2008.
The Fed and Central banks have had a lot to do with the artificial levels we are now seeing in the markets, but eventually, that too will pass and we will see the natural trend take it's course. There is no doubt we will see it coming and take the appropriate action to protect clients the way we always have. It's unfortunate that a great many investors won't.
Till we speak again, enjoy your last of the heat waves!
How Much Will Hurricane Matthew Cost?
WEEKLY UPDATE - OCTOBER 17, 2016
Though stocks rose Friday after statements from Federal Reserve officials, the major indexes ended the week lower amid choppy trading. For the week, the S&P 500 lost 0.96%, the Dow fell 0.56%, the NASDAQ dropped 1.48%, and the MSCI EAFE declined 1.40%.
Counting the Cost of Hurricanes
Whenever disaster strikes, people often wonder: What's all this going to cost? Though the human toll of injury and death may be incalculable, experts have gotten pretty good at estimating the economic costs of lost production and physical damage due to major storms.
According to one economist, about two-thirds of the economic losses of a hurricane are related to property damage while one third come from economic losses. The insurance costs of property damage due to Matthew's wind and storm surge are currently estimated to be between $4 billion and $6 billion, though those figures may rise as claims start rolling in. The chart below shows storm damage estimates for four major hurricanes since 1979. We can see that Hurricane Sandy and Hurricane Katrina dwarf Matthew in terms of overall damage.
However, Matthew is estimated to have a higher percentage of losses due to wind damage, which could have implications for insurance companies. Damage from storm-caused wind and surge is generally covered under standard homeowner's and business policies, though they are often subject to high deductibles.
One estimate of Matthew's overall cost, including evacuations, lost revenue, and other important factors, puts the total cost at over $10 billion. Though that figure is a drop in the bucket of the overall U.S. economy, the localized effect of closed businesses, damaged roads, and flooding in affected areas could be devastating. Flood damage is not usually covered, and many hurricane victims don't have specialized flood insurance.
How much do disasters like Hurricane Matthew affect larger economic questions like Federal Reserve policy? We don't know how the Fed considers natural disasters, but it's likely that regional Feds like the Federal Reserve Bank of Atlanta include disaster-related figures in their reports.
Recent comments by Fed officials have left us with a cloudy picture about future interest rates. While it's clear that many Fed officials believe economic conditions are strong enough to warrant a December rate hike, Fed Chair Janet Yellen isn't so certain. In a Friday speech, she gave us some insight into the Fed's reluctance to move on interest rates, saying that anomalies in economic trends leave her inclined to run a "high-pressure economy" to reverse more of the economic damage before it becomes permanent.
Monday:Empire State Manufacturing Survey, Industrial Production
Tuesday:Consumer Price Index, Housing Market Index, Treasury International Capital
Wednesday:Housing Starts, EIA Petroleum Status Report, Beige Book
Thursday:Jobless Claims, Philadelphia Fed Business Outlook Survey, Existing Home Sales
September retail sales rise. Retail sales rebounded 0.6% last month, boosted by auto sales, which could be good news for the holiday shopping season.
Business inventories increase in August. Stocks of goods rose, especially among U.S. retailers, suggesting businesses might be expecting healthy demand for goods this quarter.
Consumer sentiment drops to one-year low. A measure of how optimistic Americans are about their financial prospects plummeted this month, suggesting Americans are concerned about the economy ahead of elections.
Small business confidence falls in September. A measure of confidence among American small-business owners dipped last month as declines in job openings and inventory investment declined.
Understanding the Small Business Healthcare Tax Credit
The Small Business Healthcare Tax Credit helps small businesses and tax-exempt organizations afford the healthcare they provide their employees. Your business may be eligible for the credit if:
- Your business has fewer than 25 employees working full time or who work a mix of full and part time.
- The average annual wage paid to employees must be less than $50,000 (in 2015) and the employer must pay at least 50% of all employees' health insurance premium costs.
Beginning in tax year 2014, the tax credit became worth a maximum of 50% of premiums paid by small business employers and 35% of premiums paid by small tax-exempt employers. If you didn't owe any taxes during the tax year, the credit can be carried back or forward to other tax years.
To learn more about small business tax issues, please contact a qualified tax professional.
Tip courtesy of IRS.gov
3-Point Putting Drill
Dialing in your directional control and distance awareness is challenging and takes practice. Use this putting drill to practice control and drop your stroke count. Choose a breaking putt that's between 15 and 40 feet or so. Walk to about the halfway mark and place two tees six inches apart. You get one point for sending the ball between the tees, you get a second point if you can also end within three feet of the hole, and a third point for also sinking the putt.
This drill rewards accuracy, speed control, and perceptual awareness by forcing you to visualize the line the ball needs to take. Adjust the game as you improve by moving the tees, shifting your starting point or moving the tees closer together. The more you play, the better you'll get at identifying and executing the best line to the hole.
Using your marker, draw a big dot on the ball so that you can see where you're striking the ball each time. If you find that you're hitting the ball too much on the toe or heel of the ball, you can use the following drill.
Tip courtesy of Dan Martin, PGA | Golf Tips Mag
5 Minutes to Better Health
Research shows that short bursts of activity can yield great benefits to health. They get the blood pumping and can help your arteries stay elastic. One study found that just two sessions a week of a high-intensity regimen was able to lower blood pressure by 9%. Here are some ideas for quick exercises that can boost your daily activity level:
- On your daily walks, walk quickly up the hills to increase the intensity and recover on the downhill side.
- On the treadmill, increase the intensity for 60-second bursts, and then recover for several minutes.
- On a stationary bike, do all-out sprints of six seconds, and then recover for several minutes.
- Always consult your physician before starting a new fitness regime.
Tip courtesy of AARP
Get Green Power from Your Utility
Does your local utility company offer green power? Green power is energy created from renewable, more environmentally friendly resources like solar, wind, geothermal, hydropower, or biomass. Many utility companies will allow you to purchase green power for a small fee each month. The system works by selling green energy into the existing power grid and then allowing consumers to purchase the energy. Supporting green energy allows consumers to reduce their reliance on fossil fuels while encouraging the development of renewable energy sources.
To find out if green power is available in your area, check the Green Power Network at energy.gov.
Tip courtesy of the U.S. Department of Energy
Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
Diversification does not guarantee profit nor is it guaranteed to protect assets.
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The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.
The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.
The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indexes from Europe, Australia and Southeast Asia.
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The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index.
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