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Weekly Vantage Point | Week of 4.18.2016

 
Stocks Rise to Four-Month High

April 18, 2016 – U.S. stocks slipped lower on Friday, but this did little to reduce strong gains for the week. Equities rallied as the first quarter earnings season moved into high gear, with investors relieved that banks reduced expenses enough to beat analysts' diminished earnings estimates. The S&P 500 ended the week just off its highest level in four months, while the Dow Jones Industrial Average added over 320 points for its best week since March 18th. In what may likely be among the worst earnings season in seven years, banks stocks ‐ hurt by energy exposure and low interest rates ‐ were expected to disappoint the most. Yet three major banks, while reporting reduced year-over-year results, posted better-than-expected top and bottom line results. Their share gains sparked a broader rally, particularly among financials, which gained 4% for the week, their best period performance since March 4th.

Among key domestic economic data last week, Labor Department officials reported an increase in import prices in March, as oil prices rebounded amid a falling US dollar, while retail sales unexpectedly declined last month. On the bright side, February retail sales were upwardly revised to an unchanged level from a previously reported decline. Another positive, weekly jobless claims fell to match the lowest level since 1973. Wrapping up the week, the New York Fed's Empire State manufacturing survey topped expectations in April, rising the most in over a year, while the Federal Reserve said industrial production slumped for a second month.

For the week, the S&P 500 gained 1.65%, the Dow Industrials advanced 1.82% and the NASDAQ Composite rallied 1.81%. Eight of the ten major sector groups posted gains last week, with Financials (+3.98%), Materials (+3.14%) and Industrials (+2.07%) up the most. Consumer Staples (-0.69%) and Telecom (-0.52%) lagged. Oil prices rose 1.61% last week, even as crude fell 2.75% on Friday, ahead of the Doha, Qatar oil producers meeting on Sunday to discuss a production freeze. The US Dollar Index ended at 94.696 on Friday, up 0.49% on the week, while the Bloomberg Commodities Index gained 1.73%. Treasuries prices fell over the week as equities gained, lifting the yield on 10-year Treasury notes by 3.5 basis points to end at 1.753%.

 
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Week’s Economic Calendar
 

Monday, April 18: Housing Market Index;

Tuesday, April 19: Housing Starts;

Wednesday, April 20: Existing Home Sales, MBA Mortgage Applications Activity;

Thursday, April 21: Jobless Claims, Philly Fed Business Outlook, Chicago Fed National Index, Leading Indicators;

Friday, April 22: Markit Economics PMI Manufacturing Index.

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Market Watch
Stocks 1-Wk MTD 3-Month YTD 1-Year
Dow Jones 1.73% 2.00% 9.48% 2.42% -20.61%
S&P 500 1.65% 1.11% 11.30% 2.47% 0.95%
NASDAQ 1.81% 1.44% 10.39% -1.03% -0.25%
Russell 3000 1.83% 1.21% 11.63% 2.16% -0.97%
MSCI EAFE 3.58% 2.02% 8.49% -1.05% -9.19%
MSCI Emerging Markets 3.68% 1.26% 19.85% 7.05% -16.30%
Bonds 1-Week MTD 3-Month YTD 1-Year
Barclays Agg Bond 0.08% 0.41% 2.46% 3.46% 2.06%
Barclays Municipal 0.05% 0.65% 1.38% 2.34% 4.53%
Barclays US Corp High Yield 1.55% 2.00% 8.50% 5.42% -2.86%
Commodities 1-Week MTD 3-Month YTD 1-Year
Bloomberg Commodity 1.73% 2.00% 9.48% 2.42% -20.65%
S&P GSCI Crude Oil 3.68% 8.79% 37.25% 12.61% -27.65%
S&P GSCI Gold -0.74% -0.08% 13.18% 16.45% 2.77%
Source: MorningStar
Chart of the Week: Further Insights on 1Q GDP Outlook; Prospects Brighten
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As the chart above shows, prospects for an exceptionally weak first quarter 2016 GDP brightened somewhat over the past week. The Federal Reserve Bank of Atlanta's GDPNow now-casting model forecast for real GDP growth (seasonally-adjusted annual rate) rose for the first quarter to 0.3% on April 13th from 0.1% on April 8. This increase was due to last Wednesday's retail sales report from the U.S. Census Bureau, as the forecast for real consumer spending growth increased from 1.6% to 1.8%.

And while that's an improvement, the Commerce Department's initial estimate of first quarter GDP due out on April 28th may still disappoint and may even show a quarter-to-quarter decline in real output. Since the April 13th GDPNow release of the above chart, the consensus forecast among economists has actually declined to 0.7%, according to a Bloomberg survey. Part of the problem, according to JPMorgan, will likely be slower inventory accumulation, as stockpiling falls from $78 billion annualized in 4Q to roughly $50 billion in 1Q. While such an inventory correction would reduce real GDP growth by 0.6% in 1Q, growth in subsequent quarters will depend on the additional adjustments required to return inventories to desired levels. Ultimately, the expected 1Q dip, while unnerving, shouldn't indicate further weakness for the rest of the year, which should help boost risk assets.

Remember your goals; in times of good and bad

There’s no question that periods of increased market volatility can be unsettling for investors. However, the decisions you make now—choosing to stay the course or move to the sidelines—can have long-lasting implications. In fact, making emotionally-based decisions in regard to short-term market events is one of the fastest ways to derail your long-term investment strategy.

That’s because it’s impossible to accurately time the financial markets. As a result, investors tend to opt out at the worst time, when markets are falling, and buy back in at higher prices when markets begin to rise. On the other hand, those who remain invested and focused on their long-term investment goals, have an opportunity to buy additional shares at lower prices when stock prices drop, which helps to generate long-term portfolio growth.

A time-tested approach to managing investments through periods of uncertainty is to focus on asset allocation:

  • An appropriate asset allocation, aligned with your goals, timeframe, and tolerance for risk allows you to concentrate on your long-term objectives instead of getting sidetracked by short-term market fluctuations.
  • Helps eliminate the potential for emotional decision-making that could have an adverse impact on your long-term investment strategy.

If you’re concerned about the impact of current market conditions on your portfolio, we encourage you to contact PlanningWorks at 512 498-7526 to review your current allocation, and discuss your long-term goals and risk tolerance.

Asset allocation, which is driven by complex mathematical models, should not be confused with the much simpler concept of diversification. Asset allocation does not guarantee profit or protect against loss.

Who Are Your Beneficiaries?

Life moves quickly.

That is why it’s important to keep beneficiary designations up-to-date and accurate after every major life event in your family. Ensure your wishes are carried out by identifying your accounts with beneficiary designations, such as:

  • Qualified Plans (401(k)s, 403(b)s, etc.)
  • Individual retirement accounts (IRAs, Roth IRAs, SEP IRAs, SIMPLE IRAs)
  • Insurance accounts (Life Insurance policies, Annuities, HSAs, Long-Term Care policies, etc.)
  • Education accounts (529 plans, Coverdells, etc.)
  • Transfer-on-death or payable-on-death accounts (bank accounts, CDs, etc.)
  • Other employer-provided benefit programs (PSPs, DB plans, Money Purchase Plans, ESOPs, etc.)

Once you identify these accounts use the Beneficiary Review Worksheet provided by TransAmerica to determine if your beneficiary designation information is accurate and current.

Please call PlanningWorks at 512 498-7526 if you need to update your beneficiary information or if you have any questions about an account. We happy to help you with any financial concerns you may have.

Weekly Vantage Point | Week of 4.11.2016

 
Stocks Weaken Most in Two Months

April 11, 2016 – The S&P 500 posted tepid gains on Friday, trimming three days of declines last week and capping the worst weekly slide in two months. Notably, the benchmark equity index experienced three consecutive days of moves of 1% or more last week,ending a 15-day stretch of relative calm, the longest such period since March 2015. Last week's pullback leaves the S&P 500 with just a modest 0.81% year-to-date gain. That is little cushion ahead of what analysts predict will be among the worst of quarterly earnings reporting seasons since the financial crisis. Around 9% of S&P 500 companies are expected to post quarterly results this week, with analysts initial forecasts projecting overall negative earnings growth of nearly 9% year-over-year.

Among key domestic economic data last week, factory orders fell 1.7% in February, following a downwardly revised 1.2% gain in January, while durable goods orders slumped 3%. On a brighter note, the Institute for Supply Management (ISM) Non-Manufacturing Index and Markit Economics' Services Purchasing Managers' Index (PMI) both posted gains for March. Mortgage applications activity rebounded and jobless claims declined. Wrapping up the week, Commerce officials reported wholesale inventories fell 0.5% in February, the steepest decline since May 2013.

For the week, the S&P 500 fell 1.15%, the Dow Industrials lost 1.21% and the NASDAQ Composite declined 1.27%. Eight of the ten major sector groups ended lower last week, with Financials (-2.82%), Consumer Discretionary (-2.03%) and Utilities (-1.97%) falling the most. Energy (+2.20%) and Healthcare (+0.90%) outperformed. Oil prices surged 8% last week after the Energy Department said U.S. oil production fell for the 10th time in 11 weeks, while crude inventories declined. The US dollar index fell 0.406% to 94.235, while the Bloomberg Commodities Index gained 1.4%. Treasuries rallied over the week, with the yield on 10-year Treasury notes declining by 5.3 basis points to end at 1.718%.

 
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Week’s Economic Calendar
 

Monday, April 11: No major releases;

Tuesday, April 12: Small Business Confidence, Import & Export Prices;

Wednesday, April 13: Retail Sales, Producer Prices, Business Inventories, Fed Beige Book;

Thursday, April 14: Consumer Prices, Jobless Claims;

Friday, April 15: Empire State Manufacturing, Industrial Production, Consumer Sentiment.

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Market Watch
Stocks 1-Wk MTD 3-Month YTD 1-Year
Dow Jones -1.21% -0.61% 7.53% 0.87% 6.35%
S&P 500 -1.15% -0.53% 7.14% 0.81% 0.51%
NASDAQ -1.27% -0.36% 4.81% -2.78% -0.83%
Russell 3000 -1.19% -0.61% 6.91% 0.36% -1.68%
MSCI EAFE 0.65% -1.50% 1.79% -4.46% -11.80%
MSCI Emerging Markets -1.09% -2.34% 10.77% 3.24% -17.98%
Bonds 1-Week MTD 3-Month YTD 1-Year
Barclays Agg Bond 0.38% 0.33% 2.72% 3.38% 1.99%
Barclays Municipal 0.55% 0.61% 1.42% 2.29% 4.51%
Barclays US Corp High Yield 0.45% 0.44% 4.12% 3.81% -3.98%
Commodities 1-Week MTD 3-Month YTD 1-Year
Bloomberg Commodity 1.40% 0.26% 3.08% 0.68% -20.21%
S&P GSCI Crude Oil 9.34% 4.92% 20.47% 8.61% -20.63%
S&P GSCI Gold 1.66% 0.66% 13.27% 17.32% 3.38%
Source: MorningStar
Chart of the Week: Weak 1Q GDP Outlook: Seasonal Trend, Not Systemic
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First-quarter economic data has continued to come in weak, prompting JPMorgan to revise its 1Q 2016 seasonally-adjusted real GDP forecast to only 0.2% on an annualized basis (down from 1.2% two weeks ago and 2.0% the week before that). Through this multi-year recovery, real GDP growth has tended to be weak in the first quarter and stronger in the second quarter, and subpar 1Q16 growth continues this pattern. Average real GDP growth in the first quarter of the six years 2010-2015 has averaged only 0.8%, while average growth in the second quarters averaged 3.1%.

Therefore, JPMorgan believes the pattern of weak first quarters is a coincidence rather than a systemic seasonal adjustment problem. They forecast the pattern of stronger 2Q16 growth to hold again this year, projecting 2.0% growth in the second quarter of 2016 and 2.25% during the second half of the year. As the chart above shows, this past week's PMI services survey, for example, posted a 51.3 reading for business activity, below its 52.4 average for the prior three months. The ISM non-manufacturing measure of activity rebounded to 59.8, 2.7-points above its average for the prior three months.

Getting the Most from Social Security

Social security is a critical component of retirement planning, and one that can be overwhelming and potentially costly if you are uninformed.

Principal Financial Group provides a great guide here to help you navigate the ins and outs of Social Security. Included in the guide is a worksheet that you can complete to help you create your retirement action plan.

If you have any questions or wish to discuss this further, please contact PlanningWorks to set-up an appointment.

Weekly Vantage Point | Week of 4.4.2016

 
Fed Rate Caution Sends Stocks Higher

April 4, 2016 – The S&P 500 advanced last week, completing its sixth weekly gain in the past seven weeks and finishing at its highest closing level of the year. The week was defined by a market-friendly speech delivered by Federal Reserve Chair Janet Yellen on Tuesday to the New York Economic Club, where she said she is in no rush to raise rates amid a sluggish global economy. Her stance that the Fed must "proceed cautiously" quashed rate hike expectations stirred by comments from several Fed district presidents that a rate hike could come as soon as April. The dovish stance helped equities conclude their largest quarterly turnarounds since the Great Depression.

In other key economic data last week, Commerce Department officials said personal incomes rose 0.2% in February, down from a larger increase the month prior, but higher than forecast, while spending rose 0.1% for a third month. Home prices continue to trend higher and the Conference Board's reading of consumer confidence increased for March. All three U.S. automakers posted March sales gains, although they missed analysts' estimates, with the overall annualized sales pace slowing to the lowest level in 13 months. The week culminated with continued gains in employment, with payrolls increasing by 215,000 in March, down slightly from an upwardly revised increase in February. Hourly earnings climbed more than expected, while the headline unemployment rate edged higher to 5% from 4.9% the month prior.

For the week, the S&P 500 rose 1.84%, the Dow Industrials gained 1.58% and the NASDAQ Composite surged 2.97%. Nine of the ten major sector groups advanced, led by Technology (+2.73%), Consumer Staples (+2.65%) and Consumer Discretionary (+2.52%). Energy (-1.26%) lagged after a Saudi Arabia official said the nation would only agree to an oil production freeze if Iran joined the agreement. WTI crude oil futures retreated by over 6.7% last week, ending at $36.79/barrel. Treasuries rallied over the week, with the yield on 10-year Treasury notes declining by 13 basis points to end at 1.771%.

 
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Week’s Economic Calendar
 

Monday, April 4: Factory Orders;

Tuesday, April 5: U.S. Trade Deficit, JOLTS, ISM Non-Mfg Index;

Wednesday, April 6: MBA Mortgage Applications, FOMC Meeting Minutes;

Thursday, April 7: Jobless Claims;

Friday, April 8: Wholesale Trade.

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Market Watch
Stocks 1-Wk MTD 3-Month YTD 1-Year
Dow Jones 1.58% 0.61% 2.11% 2.11% 6.88%
S&P 500 1.84% 0.63% 1.99% 1.99% 2.82%
NASDAQ 2.97% 0.92% -1.53% -1.53% 1.90%
Russell 3000 2.05% 0.59% 1.56% 1.56% 0.61%
MSCI EAFE -0.21% -2.14% -5.08% -5.08% -10.34%
MSCI Emerging Markets 1.74% -1.26% 4.47% 4.38% -13.05%
Bonds 1-Week MTD 3-Month YTD 1-Year
Barclays Agg Bond 0.58% -0.04% 2.99% 2.99% 1.60%
Barclays Municipal 0.50% 0.06% 1.73% 1.73% 3.95%
Barclays US Corp High Yield 0.33% -0.01% 3.34% 3.34% -3.72%
Commodities 1-Week MTD 3-Month YTD 1-Year
Bloomberg Commodity -1.65% -1.12% -0.71% -0.71% -21.84%
S&P GSCI Crude Oil -6.77% -4.04% -0.67% -0.67% -26.51%
S&P GSCI Gold 0.00% -0.98% 15.40% 15.40% 1.26%
Source: MorningStar
Chart of the Week: The Consumer Spending Conundrum; Incomes Rise, Spending Slows
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The chart above shows real consumer spending increased at a moderate 0.2% seasonally-adjusted monthly rate in February, but the January figure was revised lower to unchanged from 0.4%. This in turn reduced the tracking estimate of 1Q 2016 real consumer spending growth from 2.9% to just 1.7% (seasonally-adjusted annual rate, SAAR). January real spending on goods was revised down to minus 0.3% (from +0.7%) and spending on services was revised down to +0.1% (from +0.3%).

On the other hand, real disposable income, through the first two months of the quarter, was up a solid 3.4% (SAAR), so the slowdown in spending reflects an abrupt increase in the saving rate, from a 5% average in 4Q 2015 to 5.4% in February. Unfortunately, there is no obvious reason for the spending slump, although the sharp decline in equity prices early in the year may have discouraged spending. If this is the case, then we would expect a rebound in spending relatively soon. However, data on Friday showed unit auto sales were tracking at 16.6 million for March, down from 17.4 million the month before and the weakest pace since February 2015. Confounding matters further, auto makers spent an average of $3,110 on sales incentives per vehicle sold last month, 14% more than a year earlier and up slightly from February, according to Autodata Solutions.

Weekly Vantage Point | Week of 3.28.2016

 

 
Stocks Slip on Rate Hike Concerns

March 28, 2016 – Stocks finished lower during the Good Friday holiday-shortened week, with the S&P 500 breaking its five-week winning streak after previously recovering all of its 2016 losses. Investors' appetites began to fade after several Federal Reserve officials highlighted a case for raising interest rates sooner than generally expected. St. Louis Fed President James Bullard echoed Fed Chair Janet Yellen's call for at least two rate hikes this year, with the first coming as early as April perhaps. The hawkish view stirred US dollar strength, capping five consecutive daily gains, its longest rally since last April. Weakness on the Bloomberg Commodity Index on Wednesday and Thursday were its steepest back-to-back declines since February 2nd, prompting the first weekly declines in energy and materials shares since February 12th.

In key economic data last week, February's existing home sales declined more than forecast after reaching the second-highest level since 2007 just a month before. In contrast, new home sales rose last month, led by a 38.5% surge in the west. Western new home sales sank 32.7% in January. Weekly jobless claims crept higher last week, just above a four-decade low, while durable goods orders fell in February for its third decrease in the past four months.

For the week, the S&P 500 fell 0.65%, the Dow Industrials declined 0.49% and the NASDAQ Composite slipped 0.46%. Seven of the ten major sector groups ended lower for the four-day trading week. Energy (-2.43%), Financials (-1.86%) and Materials (-1.64%) fell the most, while Healthcare (+0.64%), Utilities (+0.58%) and Telecom (+0.54%) outperformed. WTI crude oil futures fell 4.08% last week, ending at $39.46/barrel after weekly oil supplies increased by over three times the projected increase. Treasuries fell, erasing gains that were led by the 10- and 30-year bonds as oil and U.S. stocks waned. The yield on 10-year Treasury notes gained 2.7 basis points last week to end at 1.901%.

 
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Week’s Economic Calendar
 

Monday, March 28: Trade Deficit, Personal Income & Outlays, Pending Home Sales, Dallas Fed Mfg.;

Tuesday, March 29: S&P/Case-Shiller Home Prices, Consumer Confidence;

Wednesday, March 30: ADP Private Sector Jobs;

Thursday, March 31: Weekly Jobless Claims, Chicago PMI;

Friday, April 1:Nonfarm Payrolls, PMI Mfg., ISM Mfg. Index, Consumer Sentiment, Construction Spending.

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Market Watch
Stocks 1-Wk MTD 3-Month YTD 1-Year
Dow Jones -0.49% 6.05% -0.21% 0.52% -1.14%
S&P 500 -0.65% 5.52% -0.65% 0.14% 0.95%
NASDAQ -0.46% 4.80% -5.14% -4.38% -0.92%
Russell 3000 -0.78% 5.50% -1.34% -0.48% -1.21%
MSCI EAFE -2.17% 4.45% -5.03% -4.88% -12.26%
MSCI Emerging Markets -1.69% 9.90% 1.48% 2.60% -14.70%
Bonds 1-Week MTD 3-Month YTD 1-Year
Barclays Agg Bond -0.04% 0.29% 2.36% 2.39% 1.38%
Barclays Municipal 0.05% -0.12% 1.31% 1.23% 3.41%
Barclays US Corp High Yield -0.72% 4.09% 3.41% 3.00% -3.88%
Commodities 1-Week MTD 3-Month YTD 1-Year
Bloomberg Commodity -1.86% 4.37% 1.05% 0.95% -20.86%
S&P GSCI Crude Oil -4.08% 16.92% 3.57% 6.53% -19.78%
S&P GSCI Gold -2.55% -0.88% 13.72% 15.40% 2.12%
Source: MorningStar
Chart of the Week: Global Oil Demand Still Alive; Supply & Demand May Balance in Coming Months
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After a steep pullback in global oil demand starting in the third quarter of last year, the latest data supports the view that oil growth has not imploded and resilience remains strong. World oil growth decelerated in the final quarter of 2015, especially in North America, where diesel demand fell sharply due to slumping activity in mining and oil & gas drilling. Warmer winter weather across America also contributed. However, as the above chart shows, global oil demand grew by 1.2% in Q4 2015, with gains in Emerging Markets (EM) accounting for the bulk of the increase (+2.4%). Developed markets' oil demand growth detracted by 0.01% - mostly in the U.S. and Japan.

Moreover, early data for the current quarter does not look as bad as they did a month ago – February data either improved from January, with an increase in North America, or extended strong EM gains with Chinese oil growth appearing to have rebounded. Consequently, Credit Suisse has gained more confidence in their forecast that global oil supply and demand will rebalance in the next few months.

World Golf Championships

PlanningWorks having fun with friends at the 2016 World Golf Championships!

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Weekly Vantage Point | Week of 3.21.2016

 
Dow and S&P 500 Turn Positive Year-to-Date

March 21, 2016 – Stocks advanced on Friday, pushing all three major U.S. equity indices to a fifth straight weekly gain, their longest stretch of gains in five months. The Dow Jones Industrial Average and S&P 500 each completed one of the largest turnarounds in market history, erasing all losses incurred during the worst start to a year on record. Emerging from its first correction in four years, the S&P 500 capped a 12.34% rally from its February 11 low, ending the week with a 0.28% YTD gain. The Dow Industrials likewise returned to plus column for 2016, finishing the week up 1.02% YTD. The NASDAQ Composite remains lower for the year, down 4.23%. For a second week, central bank actions supported equities, with Federal Reserve policymakers voting 9-to-1 to leave the Fed Funds interest rate unchanged at the 0.25-0.50%. Signaling a dovish outlook, Fed Chair Janet Yellen announced that the Fed reduced its year-end rate forecast to 0.875%, implying two quarter-point rate hikes in 2016, down from four increases previously estimated.

In other economic data last week, retail sales fell 0.1% in February, while sales excluding autos and gas rose 0.3%. Somewhat similarly, overall consumer prices contracted 0.2% last month, while core prices, excluding volatile food and energy prices, increased by 0.3%. Housing starts rebounded in February, up 5.2% to a 1.178 million annualized rate. The Philadelphia Fed's key manufacturing conditions survey index was strongly higher, jumping into positive territory, signaling the worst may be over for the factory sector.

For the week, the S&P 500 gained 1.37%, the Dow Jones Industrial Average advanced 2.26% and the NASDAQ Composite rose 1.02%. Nine of the ten major sectors posted gains on the week, led by Industrials (+3.41%), Energy (+2.48%) and Materials (+2.42%). Consumer Staples (+0.82%) gained the least, while weakness in biotechnology shares hurt Healthcare (-2.01%). West Texas Intermediate (WTI) crude oil futures rose for a fifth week, gaining 2.44% to finish at $39.44/barrel. Gold futures climbed last week, gaining 0.37% to $1,255.32/oz. Treasuries rebounded, pulling the yield on 10-year Treasury notes down 11.1 basis points to 1.874%.

 
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Week’s Economic Calendar
 

Monday, March 21: Chicago Fed National Activity Index, Existing Home Sales;

Tuesday, March 22: PMI Manufacturing, Richmond Fed Manufacturing;

Wednesday, March 23: New Home Sales, MBA Mortgage Applications;

Thursday, March 24: Jobless Claims, Durable Goods Orders;

Friday, March 25: Markets Closed for Good Friday Holiday; Final 4Q GDP.

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Market Watch
Stocks 1-Wk MTD 3-Month YTD 1-Year
Dow Jones 2.26% 6.57% 2.77% 1.02% -2.62%
S&P 500 1.37% 6.21% 2.79% 0.80% -0.24%
NASDAQ 1.02% 5.28% -2.27% -3.94% -2.58%
Russell 3000 1.37% 6.33% 2.23% 0.30% -2.20%
MSCI EAFE 1.01% 6.77% -1.03% -2.76% -7.58%
MSCI Emerging Markets 3.27% 11.79% 5.15% 4.37% -11.43%
Bonds 1-Week MTD 3-Month YTD 1-Year
Barclays Agg Bond 0.77% 0.33% 2.16% 2.43% 1.59%
Barclays Municipal 0.21% -0.17% 1.31% 1.18% 3.73%
Barclays US Corp High Yield 1.04% 4.84% 4.80% 3.74% -2.50%
Commodities 1-Week MTD 3-Month YTD 1-Year
Bloomberg Commodity 1.02% 6.35% 4.34% 2.86% -17.62%
S&P GSCI Crude Oil 2.62% 21.90% 14.09% 11.07% -11.79%
S&P GSCI Gold -0.41% 1.71% 17.89% 18.42% 8.97%
Source: Morningstar
Chart of the Week: March Manufacturing See Solid Start; Importantly, Led by New Orders
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The first two regional manufacturing surveys to report March data strengthened significantly during the month, turning positive for the first time this year. The headline level for the New York Fed's Empire State manufacturing survey surged 17-points to 0.62 in March, while the Philadelphia Fed's manufacturing survey leapt 15-points to 12.4. Perhaps more importantly, both surveys showed large increases for their measures of New Orders (seasonally-adjusted; see Figure 1 above). Impressively, New Orders on the Philadelphia Fed's survey rose to a positive 15.7 from negative 5.3 in February, as reported by Bloomberg. This is its first positive reading since September 2015.

A number of other manufacturing surveys will provide March data in the coming weeks, but the improvement in the two available to date signals that we are moving past the recent run of manufacturing weakness. It is likely that the largest drags from the stronger dollar and inventory correction may now be behind us.

When a Minor is Named as Beneficiary

When naming minor children or grandchildren as beneficiaries in your will, on a retirement account, or life insurance policy, it’s important to understand the complexities involved in transferring wealth to minors. Many people don’t realize that state laws commonly prohibit minors from owning or inheriting real property above a certain limit which can vary by state. It’s also extremely rare for insurers to distribute life insurance proceeds directly to minors. So how can you help ensure minor beneficiaries will be provided for, and their assets protected?

While several options are listed below, you’ll want to work with a qualified estate planning attorney to determine the strategy that best fits your family’s needs and situation, taking the age and education needs of minor children into consideration, the amount of wealth they may inherit, and the ability of the adult family members or trusted friends you name in your will to carry out your wishes.

  • Appoint both a personal and a property guardian in your will. This can be the same individual or different people, but don’t assume a personal guardian will be recognized by the courts as a child’s property guardian if not explicitly named as such in your will. Guardianship generally ends when the minor child turns 18.
  • Arrange for UTMA custodianship. An adult may be appointed as a custodian for assets left to/or gifted to a child under the Uniform Transfers to Minors Act (UTMA) until age 21. This appointment is made through the language of a will or living trust.
  • Establish a testamentary trust. Also called a “child’s trust,” a testamentary trust allows the trustee to use the inherited assets to fund education, health care, and everyday expenses for the child. Because it allows greater flexibility in the language and terms governing the trust, it can be extremely useful in preserving assets over time until the child is considered mature enough to manage substantial assets on his/her own.
  • Consider a special needs trust. A special needs trust can be established for minor or adult children with disabilities who may require care throughout their adult lives.

If you’d like to learn more about these and other options when naming minors as beneficiaries, or would like a referral to an estate planning attorney, please contact PlanningWorks.

 

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Investment Advisory services offered through, Waterloo Capital, L.P. a SEC Registered Investment Advisor. Securities offered through Calton & Associates, Inc. Member FINRA/SIPC OSJ 2701 N. Rocky Point Dr., Suite 1000, Tampa, FL 33607 (813) 605-0918 Waterloo Capital, L.P., PlanningWorks, Inc. and Calton & Associates, Inc. are separate entities.

A Registered Representative may only transact business in states where they are registered, or exempt from registration. Currently we have Representatives registered in CA, CO, FL, GA, IL, MN, MO, NE, NM, OH, PA, SC, and TX. If your resident state is not listed, please contact us at info@planningworks.biz. Under normal circumstances, securities licensing procedures for additional states may take 24-72 hours. We will not effect or attempt to effect securities transactions, or provide personalized investment advice to, or communicate directly with residents in a state in which a Representative is not registered.

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