Markets, Financial Planning, Retirement, Economy

Weekly Kickstart (06/12/2017-06/16/2017)

6/12/17 8:00 AM

/iStock-501199714.jpgStocks edged lower last week, with the S&P 500 declining by 0.30 percent to 2,431.77. That small loss still left the benchmark index up a solid 8.62 percent 2017-to-date, and just 0.30 percent below the all-time closing high. Last week was relatively quiet in terms of economic data but there were still a handful of headlines for traders to react to, including the U.K. election, a decision on monetary policy from the European Central Bank (ECB), former FBI director James Comey’s testimony, and continued volatility in the energy arena. Despite all of this added uncertainty, stocks held up quite well last week. That highlights how any potential near-term headwinds for equities continue to be outweighed by the prospects of lower corporate taxes and lighter regulation under the new administration. Some investors, though, remain reluctant to buy stocks right now with major indices near all-time highs.

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That hesitation could be partially due to memories of the global financial crisis remaining fresh in many Americans’ minds. In fact, a new report from Legg Mason found that roughly two-thirds of surveyed investors said that the financial crisis and subsequent economic recession still have some sort of influence on their investment decisions. The impact seems to have been more severe among younger Americans, as almost 6 in 10 surveyed Millennials said that the financial crisis still “strongly” affects their investment decisions. Gen-Y respondents also appear to be more risk-averse than U.S. investors in general, with 85 percent describing themselves as either “somewhat or very conservative.” While it is encouraging that young investors are not suffering from excessive risk-seeking, these individuals must also recognize that they are the age group best positioned to capitalize on the long-term resiliency of the stock market. Moreover, consulting with a professional financial advisor can help investors of all ages find a way to participate in financial markets that still allows them to be comfortable with their overall risk exposure.

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To recap a few of the things we learned about the economy last week, the positives included that mortgage and refinance applications rose, nonfarm productivity growth during the first quarter of 2017 was revised higher, total job openings in America jumped to an all-time high, the number of unemployed Americans per job opening fell to a record low, and first-time claims for unemployment benefits remained below 300,000 for the 118th week in a row. As for the negatives, factory orders declined, gauges of U.S. services sector activity moderated, and consumer borrowing expanded at the slowest pace in six years. This week the pace of economic data picks up considerably with lots of important reports on manufacturing, housing, consumers, and inflation scheduled to be released, along with the latest announcement on monetary policy from the Federal Reserve this Wednesday.

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**A more detailed snapshot of the U.S. economy can be found here.**

What To Watch:

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Sources: Econoday, Bloomberg, CNBC, Reuters, NAPA, Legg Mason, Twitter, Advisor Perspectives, FRBSL

Post author: Charles Couch

Disclosures