Northern Star Newsletter 10/31/2016

Message from Jon

Groundhog Day...all over again!

The market is showing renewed signs of supply and retraction vs. demand and increase. We are seeing continued decline over the short-term of demand in both the NASDAQ and the NYSE. This decline is nothing we did not see coming. As a matter of fact, we should probably see even more over the next couple of weeks given the fact that we are 7 days prior to the election, and the Fed is yet to clear their throat on what they feel they need to do regarding interest rates.

Short-term, we could see the market react downward for a bit. Longer term though has favored a rate increase, and we should see the market rally...the million dollar question is whether we see the market correct in a sizable fashion beforehand or not.

Caution is the name of the game here, so caution is what we are exercising. Our short-term indicator is now at a 1-bear level while our mid-term indicator has yet to manifest any changes at this time, so we remain cautiously optimistic.

Till we speak again...I hope to see each of you at our Winter Gala on the 19th! The big swing band will be awesome!

Jon

Big Headlines Drive the Markets

WEEKLY UPDATE - OCTOBER 31, 2016

At first glance, last week's headlines may lead you to think that the markets are fluctuating more than they actually are. Yes, Hillary Clinton's emails are in the news again (more on that below), but despite that surprise, the major indexes stuck to the same range-bound performance we've seen for the past three months. The S&P 500 ended down 0.69%, the NASDAQ was off 1.28%, and MSCI EAFE lost 0.44%. The Dow Jones Industrial Index eked out a 0.09% increase.[1]

Three Key Events Last Week

1. FBI Announces Renewed Look at Hillary Clinton's Emails

What happened?

On Friday, October 28, FBI Director James Comey sent a letter to Congress alerting them that the agency would be reviewing new Hillary Clinton emails discovered during their investigation of former Congressman Anthony Weiner.[2] When news of Comey's letter broke, the major indexes responded quickly-and negatively. For example, the Dow, which had been up 75 points, reacted with a nearly 150-point swing before closing about 10 points lower.[3]

What does this mean?

The announcement threw a wrench in an already contentious and exhausting presidential race. Recently, polls showed that Clinton held a solid lead over Trump, and the markets had priced in her win.[4] But Friday's news calls this assumption into question, creating greater uncertainty for the next two weeks.

If there's one thing the markets hate, it's uncertainty. And while big headlines rarely affect long-term performance, the markets may react to them in the short run. We expect this story to stay in the news through Election Day-a day we're pretty sure every American is ready to move past.

2. Gross Domestic Product (GDP) Has Biggest Gain in Two Years

What happened?

On Friday, the government announced that GDP - essentially, the economy's scorecard-had 2.9% growth, beating the expectations of 2.5%. Not only is this rate the best we've seen in two years, but it also shows far faster economic expansion than the first two quarters of 2016, when U.S. growth averaged just over 1%.[5]

What does this mean?

The economy is growing faster than experts thought, which makes a December interest-rate increase more likely. On Friday, traders showed an 83% likelihood that the Federal Reserve would raise rates at their last meeting of the year.[6]

Keep in mind that if the Fed raises rates, they wouldn't be doing so to temper the economy's growth. Instead, they would be using this positive GDP report as further evidence that the economy is strong enough to handle a move toward more normal interest rates.

3. Durable Goods Orders Decline

What happened?

After gaining 0.3% in August and 3.6% in July, durable goods orders dipped 0.1% in September.[7] Broadly, durable goods are items that last for more than three years-from a toaster to a tractor-and orders for them help us measure business investment. September orders lowered in a number of categories, including an 8.6% drop in orders for computers.[8]

What does this mean?

The drop in durable goods orders is less concerning than it may seem on first glance. Between a strong dollar making U.S. exports more expensive and low oil prices leading energy companies to cut spending, large manufacturing companies have often had to cut their budgets.[9] However, many economists believe these factors should be lessening, which can allow durable goods spending to rebound.[10]

ECONOMIC CALENDAR:

Monday: Personal Income and Outlays
Tuesday:Motor Vehicles Sales, FOMC Meeting Begins, PMI Manufacturing Index, ISM Mfg Index, Construction Index
Wednesday:ADP Employment Report
Thursday:Jobless Claims, Productivity and Costs, Factory Orders, PMI Services Index, ISM Non-Mfg Index
Friday:Employment Situation, International Trade

Don't Forget to Contribute to Retirement Accounts!

The end of 2016 is coming, and you need to make contributions to your 401(k) or other workplace retirement plan by December 31 for the contributions to count for 2016. You still have until April 15, 2017 to make contributions to an IRA for 2016.

Low- and moderate-income workers can also take advantage of the Retirement Savings Contribution credit, which rewards them for making contributions to IRAs, 401(k)s, and similar retirement plans. The maximum credit is $1,000 per taxpayer, though other deductions and credits will reduce the benefit.

With this credit, eligible taxpayers deduct retirement contributions from their Adjusted Gross Income, as usual. On top of that, they can deduct an additional percentage of their contribution, as outlined in this chart:

*Single, married filing separately, or qualifying widow(er)

Though anyone over 18 can apply for the credit, full-time students and those claimed as dependents are not eligible.

Tip courtesy of IRS.gov[12]

Drill For Better Balance

Developing a good kinesthetic awareness of your body in space is key to playing a solid round. Focus drills help clear your mind and encourage your body to "feel" its way through each swing. Trying to force a certain result can lead to inconsistent play and frustration.

One of the most important components of a good swing is balance, and incorporating a focus drill before you play can help you get loose and avoid distracting thoughts during your swing. Try the following drill to boost focus and balance before your next round of golf:

Without using a ball, set your feet together and take a couple of full, easy swings. Keep trying until you can easily hold your balance. Then, lift your left foot, and do the exercise again, balancing on your right foot. Harder, isn't it? Now try the other foot. Your goal should be to get a feel for the swing's motion and learn to adjust your body to stay balanced. To make the drill even harder, close your eyes while swinging.

Tip courtesy of Dan Martin, PGA| Golf Tips Mag[13]

Two Ways to Help You Swallow Pills

Many Americans struggle to swallow pills - an estimated 40%, according to a 2014 study. These problems can cause patients to skip doses of medicine or stop taking medication entirely. If you find it difficult to take pills, try these two methods developed by German researchers:

"Pop-Bottle Method": This method helps with swallowing large tablets. Fill a narrow-necked water or soda pop bottle with water. Place the pill on your tongue and clamp your lips around the mouth of the bottle. Tilt your head back and drink from the bottle, washing the pill down your throat. Keep your lips tight and don't allow air to get in while you swallow.

"Lean-Forward Method": This method helps with swallowing large capsules. Place the capsule on your tongue, take a sip of water, and lean your head forward and down as you swallow.

Still having trouble? Ask your doctor if it's possible to switch to smaller or oval-shaped pills, which may be easier to swallow than large round tablets.

Tip courtesy of AARP[14]

Freshen Your Air Naturally

Many of us enjoy the scent of candles, home fragrances, and air fresheners; unfortunately, they often contain nasty chemicals and additives that can harm your air quality and leave residue on surfaces. If you want to add some lovely smells to your home, try these natural tips:

Remove unpleasant odors by boiling a pot of water and white vinegar. The vinegar smell fades quickly and will help remove odors from the air.
Give the air a citrusy scent by simmering orange, lemon, or lime peels in water.
Simmer cinnamon sticks and other kitchen spices to give the air a spicy kick.
Create your own scents with high-quality essential oils. Add a couple of drops to clean cloths and leave them around the house.

Tip courtesy of About Home[15]

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.

The S&P U.S. Investment Grade Corporate Bond Index contains U.S.- and foreign-issued investment-grade corporate bonds denominated in U.S. dollars.

The SPUSCIG launched on April 09, 2013. All information for an index prior to its Launch Date is back-tested, based on the methodology that was in effect on the Launch Date. Back-tested performance, which is hypothetical and not actual performance, is subject to inherent limitations because it reflects application of an Index methodology and selection of index constituents in hindsight. No theoretical approach can take into account all of the factors in the markets in general and the impact of decisions that might have been made during the actual operation of an index. Actual returns may differ from, and be lower than, back-tested returns.

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.

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Google Finance is the source for any reference to the performance of an index between two specific periods.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

You cannot invest directly in an index.

Consult your financial professional before making any investment decision.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

These are the views of Platinum Advisor Marketing Strategies, LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

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Big Headlines Drive the Markets

Don't Forget to Contribute to Retirement Accounts!

Drill For Better Balance

Two Ways to Help You Swallow Pills

Freshen Your Air Naturally

Phase 1 – Where You Are

Phase 2 – Your Retirement Planning Needs

Phase 3 – Finalizing Goals and Details

Phase 4 – Putting Your Retirement Investments into Action

Phase 5 – Keeping Your Plan Effective into the Future