Market Commentary, 06/18/18
The US market finished mixed last week, with the Dow down nearly 1%, the S&P 500 flat, and the NASDAQ up more than 1%.
Trade tensions seem to be the cause of the uncertainty in the market, especially between the US and China as the Trump administration imposed 25% tariffs on $50 billion in Chinese goods, prompting Chinese leaders to vow to retaliate with US tariffs. This unease is exasperated considering the players are the world’s two largest economies. In addition to Friday’s tariffs on China there are concerns regarding the fate of the North American Free Trade Agreement (NAFTA) and the inequality of the Canadian tariffs on the US. (Source: WSJ)
Last week the US Federal Reserve approved its third interest rate increase in the last 6 months, as expected. The Fed also indicated they could accelerate the pace of the increases for the year, resulting in four hikes this year, up from the projected three. This more aggressive stance is due to a steadily growing economy accompanied by a rise in inflationary pressure.
The increasing number of jobs in conjunction with the lowest jobless rate in 18 years has spurred sales. In fact, sales among the nation’s retailers were up 0.8% in May, which is twice as much as the economists forecast. Predictably this includes increases at gas stations due to higher gas prices, but in a surprise, brick-and-mortar department stores outpaced their internet rivals. With the benefit of tax cuts, strong employment, and acceleration in hourly wage growth, consumption growth should remain strong into the second half of the year.
Wayne Copelin, CFP®
President, Copelin Financial Advisors, Inc.
514 Brooks Street
Sugar Land, TX 77478
Phone (281) 240-2902
Fax: (281) 240-2856
Securities offered through ProEquities, Inc., a Registered Broker-Dealer and Member FINRA & SIPC Advisory Services offered through Harvest Investment Services, LLC., a Registered Investment Advisor Copelin Financial Advisors, Inc and Harvest Investment Services, LLC are independent of ProEquities, Inc.