Market Commentary, 09/24/18

Last week U.S. stocks closed mixed with the Dow and S&P 500 at record highs, while the Nasdaq finished down 0.3%. The Dow added 588 points, or 2.3%, to close the week at 26,744; marking the first all-time high since January 26^th. The S&P 500 gained 0.9% to close the week at a new high as well.

Early last week President Trump announced a 10% tariff on $200 billion worth of goods from China. These new tariffs are in addition to the $50 billion already implemented earlier this year. While trade concerns have moved the market in the past, it appears this tariff was already priced in and stocks moved higher. (www.bloomberg.com)

The initial jobless claims fell last week to their lowest level since November of 1969. While this is obviously impressive, keep in mind that in 1969 there were only 81 million people in the work force versus the 161 million in the work force now. Jobless claims adjusted for the size of the labor force are now at the lowest level since the Department of Labor began reporting the data in 1967.  Additionally, continuing unemployment claims fell by 55,000 to 1.65 million, the lowest level since 1973. (Source: Sherman Sheet)

The U.S. Federal Reserve Board is widely expected to approve another increase in the short-term interest rates when it concludes a two-day meeting on Wednesday. If they do approve this increase, it will be the 4^th rate hike in 10 months, and the third this year. The expected 25 basis point increase will bring the rate to the 2% – 2.25% range, the highest level in over a decade. The increase would be a sign of increased optimism that trade disputes will not derail the global economy and a confirmation of positive economic outlook in the U.S. (www.wsj.com)

The stock market gains in spite of the tariffs announced last week really speaks volumes for the strength of the economy. Both the S&P 500 and Dow reached new highs on Friday, marking the 100^th record close for the Dow since President Trump was elected. Continued positive economic news and market run-ups confirm our positive near-term outlook for the market.

Regards,
Jeremiah Patterson, CFP^®

Copelin Financial Advisors
514 Brooks Street
Sugar Land, TX 77478
Phone: 281 240-2902
Fax: 281 240-2856
jeremiah@copelinfinancial.com

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