Listen to our podcast on iTunes. More information here.
This weeks financial market summary
- Books for the investor
- Stagflation and deflation
- The bond market
- HELOC impact on the markets
What happened last week in the markets?
Stocks were up moderately carried by larger cap stocks. Year to date the S&P 500 is up .85 and the S&P 500 is up about 4.
Durable goods where higher expected. GDP, which gives us a good feel for how we are doing as a country, was revised down dramatically but the market still was able to do ok.
As we looked at the personal income numbers we saw income was up and spending was off. While this was a good monthly report, we like to look at the trend and not the month by month data. The PCE inflation measure is below what the Federal Reserve is looking at. We think this is important for investors to monitor as it deals with stocks and bonds.
The second quarter is looking better than the first. There are more reports coming out this week that we will be watching (More in the video).
The bond market is rallying. The media has a different point of view than we do about this (More in the video).
We have been talking about deflation since the beginning of the year in spite of what traditional media is reporting. What we are seeing now tells us we are on the right track for our clients.
Market impact issues
The market is driven as much as 70% by the consumer. Home equity lines of credit (HELOC) are coming due as we move closer to the 10 year mark from when the housing market was good. Many consumers with HELOC will see their payments jump dramatically which will put a drag on consumer spending and impact the markets. If we see any interest rate hike during that time, that could really cause some damage. People could also be enticed to pull their money out of the markets to pay these increasing HELOC payments (More in the video).
There are many variables that are adding pieces to the puzzle. We still feel very good about the current economy provided we maneuver through it. We will keep you updated in our weekly financial market summary. Please send us your questions or comments below, email any of us, or call us at (205) 989-3498.
Greg Powell, CIMA
Do you have a question about our Financial Market Summary?
fi-Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. fi-Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.