Market Commentary, 09/05/17
I am happy to report that our office, our employees and their homes are all safe and survived the flood with minimal damage. Our thoughts and prayers go out to all those affected by Hurricane Harvey and the deluge it produced. It is being predicted that Harvey will be the most expensive natural disaster in American history.
Despite the hurricane, all the major indices rose last week with the Nasdaq surging 2.7%, the S&P 500 up 1.4%, and the Dow closing at 21,987, up 0.8%.
Developments last week include:
• Only 156,000 new jobs were reported in August, historically a slow month for new hires, less than the expected 180,000.
• An estimated 23% of US refinery capacity was offline because of Hurricane Harvey. As a result, gasoline prices have increased an average of $0.17 to a new average of $2.45, according to AAA.
• North Korea conducted several missile tests last week, with one flying over Hokkaido, Japan’s northern island. Additionally they tested a hydrogen bomb (the sixth since 2006). The significance being that the market doesn’t like global instability.
• In positive news, the US economy grew at a 3% annual pace in the second quarter, up 0.4% from its initial reading. This marks a significant increase in economic growth and the largest increase in over a decade; by comparison, last year’s GDP growth was only 1.8%; the 5-year average is 2.2%, and the 10-year average is 1.4%.
• President Trump visited Missouri this week to make a case for overhauling the US tax code. He called this a once-in-a-generation opportunity to reshape the increasingly complex US tax system.
In today’s market action, the Dow was down 1.07%, the S&P 500 closed down 0.76% and the Nasdaq fell 0.93%.
Likely reasons for today’s decline include:
• Escalating tension in North Korea
• Debt ceiling and budget negotiations before the end of September
• September is historically the most down month for stocks
• Hurricane Irma, now a category 5, is expected to hit the US later this week
For these reasons we maintain a cautious outlook.
Jeremiah Patterson, CFP®
Copelin Financial Advisors
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.
Source – WE Sherman & Co., LLC