Markets, Economy

Weekly Kickstart (08/21/2017-08/25/2017)

8/21/17 8:00 AM

/iStock-510081306c.jpgStocks failed to rebound last week, as the S&P 500 fell by 0.65 percent to 2,425.55. That loss still left the benchmark index up a healthy 8.34 percent year-to-date, and just 2.23 percent below the all-time closing high. Equities actually bounced sharply at the start of last week, supporting the argument that the market’s kneejerk selloff related to heightened tensions with North Korea was perhaps a bit overdone. However, stocks quickly rolled back over on Thursday after rumors hit that former Goldman Sachs executive Gary Cohn was planning on resigning from his current role as director of the White House’s National Economic Council. Since Mr. Cohn is also one of the leading candidates to replace Federal Reserve chair Janet Yellen once her term ends in February, his potential exit from the West Wing created a lot of uncertainty that was clearly not received well by the markets. Although there were of course other factors behind last week’s selloff, the real takeaway from recent price action is that stocks have become a lot more sensitive to news headlines, which means than volatility may remain elevated in the near-term. For long-term investors, though, with many years left before retirement, these periods of heightened uncertainty can sometimes create opportunities. That is especially true for investors that utilize dollar-cost averaging and regularly consult with a professional financial advisor. As always, we are here to help with any questions you may have.

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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 lifted, homebuilder confidence jumped, capacity utilization remained elevated, retail sales growth accelerated, consumer sentiment rebounded, and the number of Americans making first-time claims for unemployment benefits fell to a near-record low. As for the negatives, trade-related inflation pressures firmed, the average inventory-to-sales ratio for U.S. businesses rose, housing starts fell, building permits declined, industrial production increased by less than forecast, and gauges of regional manufacturing activity continued to send mixed signals. This week the pace of economic data slows down considerably but there are still a few important reports on manufacturing and housing scheduled to be released, along with a potentially market-moving speech from Fed chair Janet Yellen at the annual Jackson Hole Economic Policy Symposium on Friday.

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

What To Watch:


  • Nothing significant







Sources: Econoday, FRBSL

Post author: Charles Couch