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Market Minutes for the week of August 22nd

by Cascade

Market Minutes for the week of August 22nd: “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel.” – Maya Angelou In a speech today at the annual Jackson Hole symposium, Fed Chair Janet Yellen said that the “case for an increase in the federal funds rate has strengthened in recent months.” Does this mean as early as September? Possibly if the trends in the labor markets remain strong. Next week’s employment report will be an important one for the Fed. The Chicago Fed’s national economic activity index climbs to a 12-month high. The index rose 0.27% in July vs a gain of 0.05% in June. The Commerce Department reported that durable goods orders (U.S. non-defense, excluding aircraft) rose 4.4% in July. It is the largest gain since January and followed a revised 0.5% rise
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Market Minutes for the week of August 15th

by Cascade

Market Minutes for the week of August 15th: “Don’t cry because it’s over, smile because it happened.” – Dr. Seuss The Atlanta Fed updates its quarterly estimate of GDP as the numbers come in and thus gives us an interesting point in time view of the economy’s activity during the quarter. Last week the Atlanta Fed upped its forecast for real GDP growth in the 3rd quarter to 3.8%. The July Leading Economic Indicators Index rose by 0.4% to 124.2 after rising 0.3% in June. Hmmm. The Philadelphia Fed reports that its current August business activity index rose to 2.0 from a -2.9 in July. The Commerce Department reports that retail sales in July were flat at 0.00% vs 0.8% in June. Core sales declined by 0.3% vs +0.9% in June. Vehicle sales rebounded by 1.1%. Furniture sales rose as well but the real strength remained in online retailing where
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Blueprints: ABLE Act Accounts – Up and running in three states

by Cascade

The world changed this year for individuals with developmental disabilities. For the first time since the legislation that created Supplemental Security Income in 1972, individuals with developmental disabilities will be able to have an investment account that they can control that can hold more than $2,000 without disrupting benefits. Three states have made it possible for individuals to have ABLE Act accounts. More are sure to follow soon. Nebraska, Tennessee and Ohio are the first three to offer ABLE accounts. Legislation says that you have to use the state plan where the account owner resides, unless that state does not offer a plan. So if you live in Colorado, you can use any of the three plans available right now. Colorado, where I live, is working on getting their ABLE plan up and running soon. These accounts represent a big step towards a greater degree of independence for people with
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Market Minutes for the week of August 1st

by Cascade

Market Minutes for the week of August 1st: “I want to stay as close to the edge as I can without going over. Out on the edge, you see all kinds of things you can’t see from the center.” – Kurt Vonnegut Peter Boockvar: “The U.S. economy grew just 1.2% in the second quarter in real terms and 3.4% in nominal terms. Analysts had expected 2.5% real growth and 4.4% in nominal terms. The Commerce Department also revised first-quarter GDP growth down to just 0.8% from a previous +1.1% reading. Personal spending rebounded to a 4.2% gain from +1.6% in the first quarter … The gains stemmed from increased spending on both goods and services. However, private investment was the real drag [on GDP], falling almost 10% and taking 170 basis points from GDP. Within the private-investment sector, commercial-real-estate construction fell 7.9% and residential real estate construction fell 6%. Equipment
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Market Minutes for the week of July 18th

by Cascade

Market Minutes for the week of July 18th: “My wife made me join a bridge club. I jump off next Tuesday.” – Rodney Dangerfield Investors Intelligence’s latest weekly survey for financial-adviser sentiment found that the percentage bulls rose to 54.4% from 52.5% last week and represents the highest level since April 2015. When sentiment reaches 55%, Investors Intelligence considers it to be at the “danger level.” Those expecting a correction fell to 22.3%, the lowest level since June 2014. Peter Boockvar says the bottom line is that “We now have a buffet of extreme bullish sentiment,” as the CNNMoney Greed vs Fear Index is now at 91 (on a scale of 1 to 100) and the VIX (S&P Volatility Response Index), has closed at a 2-year low. Rallies like this one can continue on well into overbought territory but the margin for tolerance of bad news gets smaller and smaller.
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Market Minutes for the week of July 11th

by Cascade

Market Minutes for the week of July 11th: “You may be drawing a circle for the thousandth time, but maybe it’s a slightly better circle.” – Lou Reed Three weeks ago the markets were down 5% in 2 days as Brexit had people calling for very bad things as a result. Today we have the S&P 500 making new all-time highs seemingly every day, so what really is going on? Jim Cramer (who is one of the smartest figures on Wall Street when it comes to knowing what is behind market moves) has recently given us a number of good reasons for why stocks have rallied off the Brexit shock. 1.) Brexit was, for the most part, a uniquely European event. The one consequence for the U.S. was it drove interest rates down even further which is a good thing for businesses and consumers. 2.) The Fed went “on ice”
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Market Minutes for the week of July 5th

by Cascade

Market Minutes for the week of July 5th: “There are no failures – just experiences and your reactions to them.” Tom Krause By early last week on June 27th, the U.S. stock market had lost 950 Dow points on the news of the Brexit. By late in the same week on July 1st, the market had recovered all but 100 of those points on the news of the Brexit. Jim Cramer: “We got a real lesson in why panic is not a strategy [last] week, and I hope you will take it to heart. But I don’t know if you did, especially given that Monday, the second big down day after Brexit, was the seventh-biggest day of redemptions in the past 10 years, which, of course, includes those ugly Great Recession days, with $9.5 billion pulled out of global equity funds. I find the statistic infuriating because no matter how
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Market Minutes for the week of June 27th

by Cascade

Market Minutes for the week of June 27th: Special Edition “I don’t know. Do you?” – Peter Boockvar Britain’s first “Brexit” was in 286 A.D. Brittannia, a province of the Roman Empire, fled Roman control and established a decade long independent empire. Most of Europe was already united by this time and valued the perks of a single currency and free trade as well as security, roads, sanitation and justice afforded by the Romans.  But the Britons were less than thrilled with the high taxes, heavy labor demands and oppressive conditions of a protofeudal society, especially among those of limited means. Similar to the current “Brexit” maybe? There were 16,141,242 votes to remain in the EU, most of which came from London, Scotland and Northern Ireland. From the outlying regions…17,410,742 votes came in favoring the Brexit. The economy of the U.K. accounts for 4% of global GDP. It was never
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Wealth Notes: Income Sources in Retirement

by Cascade

The question isn’t at what age I want to retire, it’s at what income? George Foreman Wealth. Economic self-sufficiency. Financial independence. Retirement planning. These phrases all have the same definition for me – the ability to enjoy life without the need to be employed. For some, this happens at retirement. For others, it happens when they sell a business, receive an inheritance or have stock options vest. At some point, all of us will have to have our assets create income to be able to pay for all the goals and needs we have in life. Income planning is a key piece of the work we perform for clients. Investment management and financial planning, for most clients, leads to a point in time when assets will be used to generate income. The sources of income look different for those who no longer have earned income. That happens for some at
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Market Minutes for the week of June 20th

by Cascade

Market Minutes for the week of June 20th: “If God wanted us to vote, he would have given us candidates” – Jay Leno In a historic referendum dubbed the “Brexit”, the United Kingdom voted to leave the European Union. U.K. Prime Minister David Cameron said he will resign. We are closely monitoring this turn of events. St. Louis Fed head James Bullard has long been a proponent of raising short-term rates sooner rather than later. Last week however, he abruptly changed course by saying in a policy paper that economic growth in the near future is doubtful. He said that current conditions are likely to continue for at least 2 ½ more years, creating little need to raise interest rates over that time more than a quarter point. That means that without being in a recession, economic growth of around 2% muted inflation and limited wage increases and productivity gains.
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