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The Northern Star Newsletter 10/3/19 - Benchmarks End Week Lower

4

Message from Jon

4th Quarter Expectations (Maybe)

You have got to admit that the market conditions have been anything but "normal" for about the past 18-24 months. We have seen a bear-market decline of 20% from October thru December of 2018, only to rebound by March of 2019.1 This has not happened in the past several years.2

We then saw a decline in May, resulting in enough of a drop that many of the technical indicators were beginning to show bearish signs again in the wee hours of June. We saw a repeat of the same unfold in August to September.

This market condition started off looking very attractive so long as you didn't look behind you-and then it got choppy and rough along the way. The trade war has been the overall consuming conversation, with interest rates and recession sprinkled here and there.3 In my opinion, we are likely to remain choppy for the time being into year's end. We may not see a resolution to the trade war any time soon, which leaves us with little to feel good about from an investor standpoint going into Q4.

We are making subtle shifts to portfolios that reflect our attitudes toward risk and what the next 6-12 months may bring, and we will continue to do so. Over the past 20 months or so, market traction has been anything but easy to gain and very easily lost, as the graph shows.

 

 

 

We saw on Jan 29th of 2018, the S&P 500 showed a closing value of 2,870. On August 29th of 2019, the closing value was 2,877, and on Sept 30th it had a closing value of 2,976. That's a 3.621% gain over a 19-month period of time! Welcome to a classic bear-market behavior pattern, in my opinion. There's a lot of motion, commotion, and noise but very little in the way of actual progress.  Helps to explain why a mixture of stocks and bonds are appealing.

This is a head scratcher for sure with frustration mixed in for good measure. Will this likely change in the near term? Not much if any, in my opinion.

Till we speak again, enjoy the weather!

Jon

 

Sources:

  1. https://www.forbes.com/sites/johntobey/2019/01/05/bear-markets-concerns-become-reality-now-what/#52d28f55f73e
  2. https://www.cnbc.com/2019/03/21/stock-markets-fourth-quarter-crash-and-comeback-draws-comparisons-on-wall-street-to-87-95.html
  3. https://www.china-briefing.com/news/the-us-china-trade-war-a-timeline/


Benchmarks End Week Lower

WEEKLY UPDATE - SEPTEMBER 30, 2019


The Week on Wall Street
Stocks retreated last week. Traders worried that the formal impeachment inquiry of President Donald Trump might distract White House officials from their pursuit of a trade deal with China, and shift the focus of Congress away from consideration of the United States-Mexico-Canada Agreement (USMCA). Also, news broke Friday that the White House was considering restricting levels of U.S. investment in Chinese firms.


The Dow Jones Industrial Average lost less than the Nasdaq Composite and S&P 500. Blue chips declined 0.43% week-over-week, while the S&P fell 1.01% and the Nasdaq dipped 2.19%. The MSCI EAFE index, tracking developed overseas stock markets, lost 0.89%.[1][2][3]

Incomes Grow, Spending Slows
Data released Friday by the Bureau of Economic Analysis showed household incomes rising 0.4% in August. Consumer spending improved just 0.1%, however; that was the smallest personal spending advance in six months.

Another BEA report noted that "real" consumer spending (that is, consumer spending adjusted for inflation) rose 4.6% during the second quarter.[4][5]

A Slip in Consumer Confidence
The Conference Board's Consumer Confidence Index fell to 125.1 for September. That compares to a reading of 134.2 in August. Lynn Franco, the CB's director of economic indicators, wrote that "the escalation in trade and tariff tensions in late August appears to have rattled consumers. However, this pattern of uncertainty and volatility has persisted for much of the year and it appears confidence is plateauing."

In contrast, the University of Michigan's Consumer Sentiment Index ended September at 93.2, an improvement from a final August mark of 89.8.[6][7]

What's Ahead
On October 10, the Social Security Administration is scheduled to announce the 2020 cost of living adjustment (COLA) for Social Security retirement benefits. Earlier this month, Bureau of Labor Statistics yearly inflation data pointed to a possible 2020 COLA in the range of 1.6%-1.7%.[8]

THE WEEK AHEAD: KEY ECONOMIC DATA
Tuesday: The Institute for Supply Management presents its September Purchasing Managers Index for the factory sector, a barometer of U.S. manufacturing health.
Wednesday: ADP, the payroll processor, releases its September National Employment Report.
Thursday: ISM's non-manufacturing PMI arrives, reporting on the state of the U.S. service sector.
Friday: The Department of Labor's September jobs report appears, and Federal Reserve Chairman Jerome Powell gives a keynote speech at a Fed event in Washington D.C.

Source: Econoday, September 27, 2019
The Econoday economic calendar lists upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Wednesday: Lennar (LEN), Paychex (PAYX)
Thursday: Constellation Brands (STZ), Costco (COST), PepsiCo (PEP)

Source: Zacks, September 27, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.

Gray

Quote Of The Week

Fountain Pen


"Singing in the shower is all fun and games until you get shampoo in your mouth. Then, it's a soap opera."

-Unknown

Recipe Of The Week

Fork and Knife

Slow Cooker Ziti


Usually, this classic comfort meal is baked, but you can make a more-delicious ziti in the slow cooker, while you set it and forget it. This warm recipe makes the perfect family dinner and can be portioned out for leftovers throughout the week. 

[8 servings]

Ingredients:
  • 1 lb. of ground beef or ground turkey
  • 1 onion, chopped 
  • 1½ tsp. garlic, minced 
  • Salt and pepper, to taste
  • 1 tsp. dried basil
  • 1 tsp. dried parsley
  • 1 tsp. oregano
  • 28-oz. can tomatoes, diced
  • 2½ cups pasta sauce
  • 2½ cups water or chicken broth
  • 4 cups ziti pasta
  • 1¼ cups shredded mozzarella cheese

Directions:

  1. Cook the meat in a skillet with the garlic, salt, and pepper.
     
  2. Add the cooked meat, basil, parsley, oregano, tomatoes, and pasta sauce to a 4-quart or larger slow cooker and stir.
     
  3. Cook on low for 6 hours or high for 3 hours.
     
  4. At the end of the cook, turn the slow cooker to high and add the pasta. Stir to combine, and continue cooking for another 15 to 20 minutes, until the pasta is soft.
     
  5. Sprinkle with cheese and cook for another 5 minutes, until the cheese is melted. 

Recipe adapted from The Recipe Rebel[9]
 

 

Gray


Tax Tips

Document

Be on the Lookout for Tax Deduction Carryovers


There are many tax deductions and credits that taxpayers should be aware of, but what if you can't reap the full benefits of a deduction in the given filing year? Some deductions and credits may be eligible to roll over into future years. These tax carryovers could save you money on your tax return. 

Some deductions or credits may not be fully used in one tax year and are eligible to be carried over into future years, including:

  • When you have a net operating loss
     
  • When your total expense for a permitted deduction exceeds the amount you're allowed to deduct in a given year
     
  • When a credit you qualify for exceeds the amount of tax you owe in a year
     
  • Adoption tax credits
     
  • Foreign tax credits
     
  • Credits for energy efficiency

Track these (or have your software do it), so you don't forget them from one year to the next.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.



Tip adapted from Credit Karma[10]


Golf Tip

Golfer

Backyard Chipping Drills

Take advantage of the last few weeks of great weather outside before winter comes, and practice your chipping right in the backyard. You don't need to go to the country club to practice this important shot. 

One of our favorite drills helps you eliminate the "flick" many golfers do when chipping. All you need to set up is about 10 balls and a chipping mat, if you have one (if not, doing the drill on the grass works as well). Simply set up your shot as you normally would, with your front grip (left arm for right-handed golfers, right arm for left-handed golfers) nice and low on the club. Then, you are going to use a pendulum motion to hit the ball and keep your arm completely straight throughout the whole swing, including the follow through. This "tick-tock" motion will teach you not to keep your wrist completely straight. Don't focus on getting rid of the ball; just focus on that motion. 


Tip adapted from The Lady Golf Teacher[11]

Healthy Lifestyle

Medical Cross

Know Your Numbers


According to The American Heart Association, adults should know their key health numbers, including total cholesterol, HDL (good cholesterol), blood pressure, blood sugar, and body mass index. These core data points can help health care providers determine whether an individual is at risk for cardiovascular disease, a heart attack, stroke, diabetes, high blood pressure, and other concerns. 

If you're not sure what your "numbers" are, schedule a visit with your doctor to monitor them and understand why each is important. Here's a quick definition of each metric:

  • Cholesterol - Cholesterol is a lipoprotein found in our body's tissues and plays a role in forming and maintaining cell membranes. There is "good" cholesterol, which our body needs, and "bad" cholesterol, which puts us at a higher risk for heart disease.
     
  • Body Mass Index - Your BMI is calculated by your height and weight and can help measure if you are underweight, a healthy weight, or overweight.
     
  • Blood pressure - Blood pressure refers to the amount of force the heart must use to pump blood throughout the body. It is measured by the resulting pressure exerted onto blood vessel walls, during work and at rest.
     
  • Blood sugar - Blood sugar measures the concentration of glucose in the blood. 

Tips adapted from The American Heart Association[12]

Green Living

Leaf

Repurpose Your Furniture to Save Money and Natural Resources

The change of season is the perfect time to spruce up your home. Whip out all the fall decorations, and get ready for a new look! These tips will help you repurpose your furniture for a refreshed style. Instead of buying new pieces, take full advantage of the ones you already own!

The first go-to when repurposing furniture is to add a fresh coat of paint. Merely painting a piece can do wonders to make it look clean, modern, and frankly, give it a whole new life. In addition to painting, you can also change out the hardware on dressers and drawers to really make a piece stand out. 

Another great tip when repurposing furniture is to add some contact paper or texture to a piece. You can buy contact paper at your local craft store and use it to spruce up cabinets, as an accent to a bookcase or dresser, or just to give a colorful, new look to anything in your home. Similarly, wallpaper is really easy to install and can completely transform a room for fall. 


Tip adapted from My Repurposed Life[13]

Share the Wealth of Knowledge!

 

Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!

 

Gray 

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 indices from Europe, Australia, and Southeast Asia. 

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.

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 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.

By clicking on these links, you will leave our server, as the links are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site. 

[1] www.cnn.com/2019/09/27/investing/dow-stock-market-today-oil/index.html

[2] www.wsj.com/market-data

[3] quotes.wsj.com/index/XX/990300/historical-prices

[4] www.marketwatch.com/story/consumer-spending-barely-rises-in-august-as-americans-save-more-2019-09-27

[5] www.investing.com/economic-calendar

[6] www.conference-board.org/data/consumerconfidence.cfm

[7] www.marketwatch.com/story/consumer-sentiment-rebounds-in-september-but-americans-more-anxious-2019-09-27

[8] finance.yahoo.com/news/3-events-could-push-social-100600194.html

[9] www.thereciperebel.com/slow-cooker-baked-ziti/ 

[10] www.creditkarma.com/tax/i/tax-carry-forward/ 

[11] www.youtube.com/watch?v=Z0XpUKBf35w 

[12] www.heart.org/en/know-your-risk/know-your-numbers 

[13] www.myrepurposedlife.com/250-repurposed-projects/

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Summit Financial Group 
Summit Financial Group of Indiana
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jon@summit-fp.com
http://www.summitfinancialgroupofindiana.com


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