Remember that wherever your heart is, there you will find your treasure (Paul Coelho, Brazilian novelist)

Transcription

1 David J. Klein Senior Vice President Financial Advisor The Auctus Group RBC Wealth Management Phone: Fax: Toll Free: website: July 23, 2018 Remember that wherever your heart is, there you will find your treasure (Paul Coelho, Brazilian novelist) My Website: The June edition of RBC s Global Insight is in the middle of the front page while RBC s Investor s Edge is on the bulletin board on the right side of the main page. Please note the other interesting articles and commentaries. Key Statistics Year-to-date a/o 7/20/2018 Dow: +1.21% S&P 500: +4.78% Nasdaq: % Treasury Bond Yields: Year- to-date a/o 7/20/ year Treasury: 2.41% 2-year Treasury: 2.60% 5-year Treasury: 2.77% 10-year Treasury: 2.89% 30-year Treasury: 3.03% --The spread between the 2-year and the 10-year continues to tighten. Notice, however, how much higher the 2-year yield is compared to the Eurozone and Japan.

2 Markets: (Barron s, IBD, WSJ, RBC, MFS, Advisor Perspectives) For the week: Dow rose +2.3%, S&P 500 rose +1.50%, Nasdaq rose +1.79% Despite news that could have caused mass selloffs, the markets rose positively S&P 500 at its highest level in more than 5 months Nasdaq rose to a new record high Not all sectors have risen: Over the past month, industrials and materials have fallen 2.5% and financials have fallen 2.9%. Outperformers included utilities and consumer staples Earnings season began last week Economic News: (Barron s, IBD, WSJ, RBC, MFS, Advisor Perspectives) US economic expansion now the 2 nd longest in US history Fed Chairman Powell said the economy is strong and additional rate hikes are likely Trump said the strength of the dollar is putting the US at a disadvantage in global trade Earnings season begins: solid earnings reports so far White House projecting a $1 trillion budget deficit next year due to federal spending and a rising debt service Employment is strong lowest number of jobless claims reported last week since December, 1969 Difficulties remain in finding qualified workers for some jobs see following 2 charts

3 Source: Bespoke Investment Group For the past several years, the major concerns for the NFIB, the National Federation of Independent Businesses, were taxes and government overregulation. Now we see that the quality of labor has risen to the forefront and become the leading problem for the NFIB.

4 Question of the Week: According to the Tax Policy Center, it is estimated that million tax returns will be filed next year for tax year What percentage of those returns are projected to legally pay zero federal income tax? Question and Answer From 2 Weeks Ago: The yield spread between the 2-year Treasury and the 10-year Treasury has been narrowing. Currently the spread is only 0.29%. Historically, what has this meant from an economic standpoint? Answer: The narrowing yield spread has typically forewarned the coming of the next recession. When the yield on the 10-year falls below the yield on the 2-year this creates an inverted yield curve. With the current strength of the economy, many economists attribute the narrowing of the spread to a variety of other causes and not necessarily to a coming recession. Did You Know: A draft of the new Form 1040 for tax year 2018 released last month has just 23 lines, compared to 79 lines on the existing Form 1040 tax form BTN Research, IRS) Just 3.7% of American seniors wait until age 70 to claim their maximum retirement benefits from Social Security. (BTN Research, Social Security) Sports Trivia: Before last week s Major League Baseball All-Star game, both the American League and the National League had each won 43 games with 2 games ending in ties, and each League had scored 361 runs in the prior 88 All-Star games. (BTN Research, MLB) Referrals: Many sincere thanks for your referrals of family, friends, and associates. I am deeply appreciative. Sincerely, David J. Klein Senior Vice-President Financial Advisor The views presented here are solely the views and opinions of David Klein and do not reflect the views of RBC Wealth Management, or its officers and directors. Data is believed to be from reliable sources, but we make no representation as to its accuracy or completeness.. The Dow Jones Industrial Average covers 30 blue chip U.S. companies selected by the editors of the Wall Street Journal The Dow represents about 25% of the NYSE market capitalization and less than 2% of NYSE issues. The Nasdaq Composite is a market-value weighted index that measures all NASDAQ domestic and foreign common stocks. The Standard and Poor s 500 is an unmanaged, capitalization weighted benchmark that tracks broad-based changes in the U.S. stock market. This index of 500 common stocks is comprised of 400 industrial, 20 transportation, 40 utility, and 40 financial companies representing major U.S. industry sectors. The index is calculated on a total return basis with dividends reinvested and is not available for direct investment. This material is based on data obtained from sources considered to be reliable. However, it is not guaranteed to accuracy and does not purport to be complete. The illustrations are for informational use only.

5 RBC Wealth Management does not provide tax or legal advice. All decisions regarding the tax or legal implications of your investments should be made in conjunction with your independent tax or legal advisor. RBC Wealth Management, a division of RBC Capital Markets Corporation, Member NYSE/FINRA/SIPC.