We’re in the middle of an interesting moment for the markets, where short-term volatility and uncertainty might lead you to believe that the economy is faltering. After all, the major stock indexes lost ground this week, with the S&P 500 losing 1.94%, the Dow dropping 1.50%, the NASDAQ dipping 2.77%, and the MSCI EAFE declining 1.59%.
Of course, we never like to see the markets go down. However, we believe that when you look beneath the surface, the economy is still doing far better than what this week’s performance implies. Behind the losses and ongoing election exhaustion, we see a number of strong indicators that the economy is growing. This week, we learned that the trade deficit shrank[3], the service sector grew for the 81st consecutive month[4], and manufacturing continued its steady growth.[5] On Friday, November 4, we also got to see new data on jobs and payrolls — the last significant economic report before Election Day. What did the jobs report show us? The unemployment rate hit 4.9%—only 0.1% above the Federal Reserve’s target unemployment rate.[6] While this job creation rate was below economists’ predictions, we don’t think it is cause for concern. The growth was matched by revised August and September reports that added another 44,000 jobs.[7] Earnings increased by 0.4%, pushing them 2.8% higher than this time last year. We haven’t seen an earnings increase this large since 2009.[8] Last month showed the highest number of people who voluntarily left their jobs since 2007. This statistic matters because it can show that people are more confident they’ll be able to find new jobs.[9] Our Takeaway For years, this plow horse economy has been adding new jobs at a slow and steady pace. Now that we’ve almost reached the benchmark unemployment rate, people are finally starting to see their wages increase and new opportunities arise. Typically, better jobs mean more disposable income, which equals increased consumer spending—and economic growth. The rest of 2016 might not be a smooth ride, as the election and potential interest rate increase remain on investors’ minds. We hope you find comfort knowing that beneath this short-term volatility, we see growing economic strength. ECONOMIC CALENDAR: Monday: Gallup U.S. Consumer Spending Measure, Consumer Credit Tuesday: U.S. Presidential Election Wednesday: Wholesale Trade, EIA Petroleum Status Report Thursday: Treasury Budget Friday: Banks Closed but Markets Open, Consumer Sentiment Notes: All index returns exclude reinvested dividends, and the 5-year and 10-year returns are annualized. Sources: Yahoo! Finance and Treasury.gov. International performance is represented by the MSCI EAFE Index. Corporate bond performance is represented by the DJCBP. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. “Worrying does not empty tomorrow of its troubles; it empties today of its strength.” – Corrie ten Boom Brie Crostini Serves 4-6 Ingredients: 1 baguette or loaf of crusty bread 2 cloves garlic, halved 1/4–1/2 pound Brie, thinly sliced 1/2 cup orange or quince marmalade 2 tablespoons olive oil Kosher salt freshly ground black pepper 2 sprigs of fresh thyme, minced Directions: Recipe adapted from Kay Chun | RealSimple.com[10] Check Your Flex Spending Accounts The end of the year is less than two months away, and it’s time to check the balance on any flexible spending accounts or health savings accounts you have contributed to throughout the year. Check with your benefits provider to learn about the specifics of your program. If you don’t have a grace period and have a balance left in your account, plan to make a trip to the dentist, drug store, doctor, or optometrist. Tip courtesy of IRS.gov[11] Pull the Trigger! Ever freeze up before a swing? Most golfers have experienced an attack of nerves or had unhelpful thoughts derail their shot. The cure to pre-shot nerves is both mental and physical. A good pre-swing mental routine and a couple of warm-up exercises will help you plan your shot and stay loose. Before addressing the ball, ask yourself some strategic questions: Once you have your game plan, warm up with a few practice swings and a visualization of how you intend to play the ball. With your mind clear and your muscles loose, step up and pull the trigger on your swing. Tip courtesy of Shawn Clement, CPGA | Golf Tips Mag[12] Fight the Flu With These Healthful Foods ‘Tis the season to catch the flu, and a healthful diet can help you fight off winter colds. To ward off the flu, add these five foods to your diet: Tip courtesy of AARP[13] Reduce Phantom Energy Use Did you know that many appliances and electronic items continue to draw power even when turned off? Most appliances with internal clocks or stand-by settings, as well as chargers for electronic items, continue to use energy after you press the power button. Though the amount of energy used can seem small, it may contribute as much as 10% to your monthly power bill. The cure? Plug items into a power strip and turn off the entire strip or unplug the item from the wall when not in use. Tip courtesy of Tucson Electric Power[14] Share the Wealth of Knowledge! If you would like to opt-out of future emails, please reply to this email with UNSUBSCRIBE in the subject line. Investment advisory services offered through Brookstone Capital Management, LLC (BCM), a registered investment advisor. BCM and Carla J. Merlak are independent of each other. 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 S&P U.S. Investment Grade Corporate Bond Index contains U.S.- and foreign-issued investment-grade corporate bonds denominated in U.S. dollars. The Dow Jones Corporate Bond Index is a 96-bond index designed to represent the market performance, on a total-return basis, of investment-grade bonds issued by leading U.S. companies. Bonds are equally weighted by maturity cell, industry sector, and the overall index. The S&P/Case-Shiller Home Price Indices are the leading measures of U.S. residential real estate prices, tracking changes in the value of residential real estate. The index is made up of measures of real estate prices in 20 cities and weighted to produce the index. 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 Marketing 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. 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[1]http://finance.yahoo.com/q/hp?s=%5EGSPC&a=06&b=1&c=2016&d=06&e=8&f=2016&g=d http://finance.yahoo.com/q/hp?a=06&b=1&c=2016&d=06&e=8&f=2016&g=d&s=%5EDJI%2C+&ql=1 http://finance.yahoo.com/q/hp?a=06&b=1&c=2016&d=06&e=8&f=2016&g=d&s=%5EIXIC%2C+&ql=1 https://www.msci.com/end-of-day-data-search [2] http://www.bloomberg.com/news/articles/2016-11-03/japan-futures-tip-stock-losses-on-yen-bounce-pound-holds-gains [3] http://www.ftportfolios.com/Commentary/EconomicResearch/2016/11/4/the-trade-deficit-in-goods-and-services-came-in-at-36.4-billion-in-september [4] http://www.ftportfolios.com/Commentary/EconomicResearch/2016/11/3/the-ism-non-manufacturing-index-declined-to-54.8-in-october [5] http://www.ftportfolios.com/Commentary/EconomicResearch/2016/11/1/the-ism-manufacturing-index-rose-to-51.9-in-october [6] http://www.ftportfolios.com/Commentary/EconomicResearch/2016/11/4/nonfarm-payrolls-increased-161,000-in-october [7] http://www.ftportfolios.com/Commentary/EconomicResearch/2016/11/4/nonfarm-payrolls-increased-161,000-in-october [8] http://www.ftportfolios.com/Commentary/EconomicResearch/2016/11/4/nonfarm-payrolls-increased-161,000-in-october [9] http://www.ftportfolios.com/Commentary/EconomicResearch/2016/11/4/nonfarm-payrolls-increased-161,000-in-october [10] http://www.realsimple.com/food-recipes/browse-all-recipes/warm-garlic-brie-crostini [11] https://www.irs.gov/pub/irs-pdf/p969.pdf?_ga=1.151297401.1550323299.1477829790 [12] http://www.golftipsmag.com/instruction/strategy-troubleshooting/pull-the-trigger.html#.VIO46WTF-pw [13] http://www.aarp.org/health/healthy-living/info-12-2013/health-tips-for-new-year.2.html
Data as of 11/4/2016
1-Week
Since 1/1/16
1-Year
5-Year
10-Year
Standard & Poor’s 500
-1.94%
2.02%
-0.81%
13.28%
5.28%
DOW
-1.50%
2.66%
0.12%
9.86%
4.92%
NASDAQ
-2.77%
0.78%
-1.87%
17.57%
11.65%
U.S. Corporate Bond Index
0.18%
7.78%
7.24%
4.86%
7.28%
International
-1.59%
-4.49%
-6.93%
2.26%
-1.74%
Data as of 11/4/2016
1 mo.
6 mo.
1 yr.
5 yr.
10 yr.
Treasury Yields (CMT)
0.25%
0.52%
0.62%
1.24%
1.79%
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