Markets, Economy

Weekly Kickstart (10/23/2017-10/27/2017)

10/23/17 8:00 AM

/iStock-462756183.jpgThe market melt-up continued last week, as the S&P 500 rose by 0.86 percent to 2,575.21. That is a new all-time closing high which left the benchmark index up a solid 15.02 percent year-to-date. That gain is more than double the return that millionaire Baby Boomers recently surveyed by Fidelity expect from their investments each year. However, affluent Generation-X and Millennial investors reported that they anticipate regular annual returns of at least 16 percent. Younger respondents’ expectations are quite lofty but not too surprising since many of these individuals likely began investing during the current bull market and therefore became accustomed to above-average market returns.


Further, the nearly complete absence of volatility in the stock market this year makes the 16 percent return target seem well within reach before the end of 2017. Seasoned investors, though, are a bit skeptical that equities will continue to have it so easy during the final few months of this year. One reason for such concern is the quickly approaching deadline for Congress to pass a spending measure that keeps the government open after December 8th. Add to that the uncertainty still surrounding tax reform, monetary policy, and North Korea, and it becomes clear that there are lots of potential headwinds for equities in the near-term. For retirement-focused investors, any significant pullbacks could create opportunities, especially for individuals that are consistent participants in a tax-advantaged savings vehicle, 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.


To recap a few of the things we learned about the economy last week, the positives included that mortgage and refinance applications rose, existing home sales lifted, homebuilder confidence firmed, regional manufacturing activity improved, industrial production rebounded, capacity utilization increased, and the number of Americans making first-time claims for unemployment benefits plunged to a 44-year low. As for the negatives, cross-border inflation pressures picked up, housing starts declined, and building authorizations fell. This week the pace of economic data remains slow but there are still a few important reports on manufacturing, housing, and consumers scheduled to be released, along with the government’s first official estimate of U.S. gross domestic product (GDP) growth during the third quarter of 2017 due out on Friday.


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

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Sources: Econoday, Fidelity Investments, Twitter, Pension Partners, FRBSL

Post author: Charles Couch