The little engine that could is getting very tired!
This week we have seen the sellers begin to show up, resulting in yet another failed attempt to show a second day of continuous demand in the markets. Having seen a rally yesterday and then a failed attempt today further confirms that we are still in a bear market overall-but a near-term neutral environment.
Many blame the election-and to their point, I can see where that would have some affect. However, the majority of the issue we are seeing now is that companies' earnings are lagging, and their future earnings forecasts are coming in lower than what Wall Street would like to see.
What we have yet to hear much about this month is the Fed and their approach to raising rates. We still see the December month as their next legitimate opportunity to announce a rate increase to take place in January sometime. This announcement, coupled with whoever gets elected, may be a significant catalyst for a sell-off...but then again, it may only go to fuel the tired rally to new heights, and who can know at this point?
What I do know is that before we can officially exit this secular bear market we have been in since 2000, we must see the overall valuations reduce to more-much more attractive areas in order to draw back the buyers to the party. My thoughts are that, in all likelihood, any rally we see in the short-term will not be strong enough to override the overall concerns long-term, and therefore, we are likely to see a correction before seeing a rally.
Remember to mark your calendars for the 19th! The winter gala is sure to be a lot of fun with dinner, dancing to a live big band, and so much more...don't miss out!
Till we speak again, enjoy your week.
A Quiet Week Ends With Indexes Up
WEEKLY UPDATE - OCTOBER 24, 2016
After a two-week losing streak, U.S. indexes ended in positive territory across the board. The S&P 500 increased by 0.38%, the Dow was up 0.04%, and the NASDAQ gained 0.83%. The MSCI EAFE, a measure of international developed nations' performance, increased 0.93%.
Of course, seeing positive weekly results is always good, but right now, the general market sentiment seems unsure about where it stands and where to go from here.
Why did the markets have a sluggish week?
Experts last week described the markets as lazy and docile, and we have to agree. If these five days of trading were made into a movie, it would probably put a lot of people to sleep.
On paper, last week seemed to provide plenty of opportunities for market excitement - from major companies' earnings releases to the European Central Bank's latest policy announcement. In reality, however, much of what we saw and heard led to little change and few strong reactions.
We'd point to a few key occurrences:
- Earnings reports were mostly good, but few were outstanding.
- The European Central Bank held interest rates where they are.
- The presidential election continues to hold the markets in limbo.
While last week's markets seemed more sluggish than normal, a little break from the excitement can be nice sometimes, especially when coupled with increases across all major U.S. indexes.
This week not only moves us ever closer to Election Day, but it also brings more earnings reports and ends with a key update on Friday: Gross Domestic Product. GDP gives us insight into how the economy is performing and where we stand with inflation.
Tuesday:Consumer Confidence, State Street investor Confidence Index
Wednesday:New Home Sales
Thursday:U.S. Durable Goods Orders
Friday:GDP, Consumer Sentiment
U.S. Dollar Surges: The U.S Dollar hit a seven-month high, rising 0.37% compared to a group of currencies. Right now, the exchange between the Dollar and Euro is at $1.088.
Microsoft Reaches All-Time High: After releasing an expectations-beating earnings report, Microsoft's stock prices grew, and on Friday they closed higher than their previous record, set in 1999.
Volatility Lowers: The CBOE Volatility Index (VIX), which measures fear and volatility in the markets, fell to 13.4.
Are You Subject to the AMT?
The Alternative Minimum Tax is designed to force many affluent taxpayers who qualify for certain exemptions to pay a greater share of taxes. Though the AMT was permanently indexed to inflation in 2013, many Americans are still subject to the tax.
Here are a few things you should know:
- You may be subject to the AMT if your modified adjusted gross income (MAGI) is above the AMT exemption amount for your filing status.
- The 2016 AMT exemption amounts for each filing status are:
- Single and Head of Household = $53,900
- Married Filing Joint = $83,800
- Married Filing Separate = $41,900
- Head of Household = $53,900
- The rules for calculating the AMT are more complex than those for regular income tax, so it's a good idea to work with a qualified tax professional or use the IRS e-file software. If you want to file a paper tax return, the AMT Assistant tool on IRS.gov can also help.
- If you find that you owe AMT, you usually must file Form 6251.
For more information about the AMT, see Form 6251 instructions on IRS.gov or speak with a tax specialist in your area.
Tip courtesy of TurboTax
Work On Your Putting Precision
A good short game requires precision and sensitivity to how you strike the ball with your putter. To increase your focus and improve your putting precision, try a quick drill. Set up to a short putt, but leave your putter in the bag. Instead, try to sink the ball using a wedge. This drill will force you to carefully hit the ball with the leading edge of your club; a mistake will cause you to overshoot or even loft the ball into the air.
Once you've successfully sunk several putts, return to your putter and try to apply that same sensitivity and focus. Hopefully, you'll find that you're hitting the sweet spot on your putter more often.
Tip courtesy of Dan Martin, PGA| Golf Tips Mag
More Research Links Stress With Health Problems
Doctors have long understood that stress can exacerbate many health conditions, but new research shows that stress can actually cause dangerous problems. A recent study found that the release of cortisol and adrenaline caused by stress might be linked to common health problems like the common cold, weight gain, Type 2 diabetes, depression, and heart disease.
Here are a few ways to reduce the amount of stress in your life:
- Take time each day to meditate, go on a walk, or enjoy a quiet, restorative activity.
- See your doctor regularly and make sure he or she knows about the levels of stress in your life.
- Build a support network. Research shows that caregivers with a strong network of friends and loved ones suffer less stress.
- Exercise regularly, even if you can only make time for short bursts of activity.
Tip courtesy of AARP
Check The Efficiency Of Your Furnace
Furnaces are rated according to their ability to turn energy into heat using Annual Fuel Utilization Efficiency. Old models may have an AFUE rating that is 50% or lower, meaning they burn much more fuel to heat your home. Newer, more efficient models can have AFUE ratings of 90% and higher. Many old furnace units also have pilot lights that burn 24/7, further increasing fuel consumption. If you're in the market for a new furnace, or are evaluating the efficiency of a furnace before buying, try and find one with a high AFUE to save money and lower the carbon footprint of your home.
Tip courtesy of Seattle PI
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.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.
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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Past performance does not guarantee future results.
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