Highlights of this Week’s Update:
- The U.S. financial markets will close tomorrow for Labor Day, and our offices closed as well.
- Watch your mail this week for your personal invitation to our Annual Client Appreciation Event.
- Three more Social Security Educational Workshops scheduled for September.
- Set up your personal MyWealth financial management/planning system today-It’s the perfect time!
- Stocks fall last week and volatility continues.
- Interest rates dip, oil stabilizes, gold falls.
- Fed meets later this months-will rates rise now or later?
- September’s market reputation historically negative-so nothing new so far.
- Market volatility could continue for the next several weeks.
- Still view the current market movement as a “correction” at this time.
READ ON FOR FURTHER DETAILS…………………………………………
Labor Day Weekend
The U.S. financial markets are closed tomorrow in observance of the Labor Day Holiday. Our offices will be closed as well, and will reopen on Tuesday morning as usual. Monday is also a banking holiday, so any account withdrawals/distributions set for Monday will go out on Tuesday, the next business day. Have a great Labor Day Holiday!
Invitations in the Mail
Be sure watch your mail this week for formal invitations to our annual client appreciation event. This year we are offering a choice of two different dates for your scheduling convenience. We will be hosting a dinner each evening at Broadway 10, one of Oklahoma City’s newest premier restaurants and chop house.
Dinner will be offered either on Thursday, October 8th or Tuesday, October 13th at 6:30PM.
Please be sure to call early to reserve your seats as availability is limited for each night. We look forward to seeing you one of these nights for a great dinner and joining us in celebrating our 32nd year in business.
Additional Social Security Educational Workshops Offered
Due to the importance and lifelong impact of electing and filing for your Social Security Benefits, we are offering three more workshops this month. We hope to provide you with pertinent information that will assist you in making the best choice given your own personal circumstances in electing and filing for Social Security. When to file, how to file, and other issues will be discussed in detail as well as our ability to provide you with your own personal evaluation of your specific situation for evaluation prior to making this all too important election. Dates currently on the calendar for this workshop are:
Tuesday, September 15th: 3:00PM
Friday, September 18th: 10:00AM
Wednesday, September 30th: 10:30AM
These sessions are all conducted in our corporate office conference room. Call us today: 405-844-9826 to reserve your seats. Feel free to invite a friend or relative that could benefit from this information as well.
MyWealth is Your Financial Management/Planning Tool
If you have not yet established your own MyWealth online planning system, now is the time! This financial management/planning system can provide you with a detailed aggregation and monitoring tool for all your financial accounts, as well as allow us to work together in developing and monitoring your long term financial plan. Call us today for a personal tour of your own financial website, either in person or by phone. It is essential to develop and monitor your own long term plan in order to know where you are today and where you are going in the future, regardless of age. We are here to help you develop, monitor, and evaluate your own plan on an ongoing basis.
September is upon us and historically, it is statistically the worst performing month of the year. This data is based on “averages”, and does not apply to every September.
But September has historically been followed by a series of upbeat months – see figure 1. That includes October, which has traditionally carried a negative reputation.
Volatility within the equity markets continued again last week across global markets. The Dow Jones Industrial Average was down 3.25% for the week, and is now off 9.65% this year. The broader Standard & Poor’s 500 stock index gave up 3.4% for the week ending last Friday, and is now 6.69% lower since the end of 2014. (MarketWatch)
With stock prices lower last week, interest rates fell (bond prices rose), and the yield for the 10 year U.S. Treasury ended last week at 2.13%. This compares with 2.17% at the start of this year. (U.S. Treasury) Mortgage rates ended basically flat from the previous week, with the average rate for a 30 year fixed mortgage at 3.84% and the 15 year fixed rate ended Friday at 2.96%. (Bankrate.com)
Oil prices stabilized with the price of West Texas Intermediate Crude Oil closing the week at $45.77 per barrel, up .44. Gold fell, dropping $16.75 per ounce, finishing last week’s trading at $1,118.25 per ounce. (CNBC, St. Louis Federal Reserve)
Whenever there are wide swings in the markets, the temptation is to look for a precise cause. For example, as the Dow fell 463 points last Tuesday, market pundits were trying to pin the blame on China’s official manufacturing Purchasing Managers Index (PMI). The Chinese PMI fell from 50.0 in July to 49.7 in August (Reuters). A reading above 50 suggests Chinese manufacturing activity is growing, a reading below 50 suggests manufacturing activity is contracting.
But analysts had anticipated a decline to 49.7 (Reuters). In other words, there were no surprises. Whether earnings or interest rates or future economic activity, markets try to anticipate and price accordingly. When an economic report hits the mark, it’s not likely to cause a 463 point drop on the Dow! So, if it’s not China then what is creating the volatility?
The Federal Reserve will decide on September 17 whether it will raise interest rates for the first time in almost 10 years. Though conflicting signals from various Fed officials are creating unwanted short-term uncertainty, it too is an old story. Given some of the internal and external issues listed below, China and the Fed may have simply been the proverbial “excuse” trying too simply to explain recent market activity.
Here’s some of the overarching themes that probably bolstered stock uncertainty in recent months:
- A U.S. stock market that, until August, hadn’t seen a 10% correction since 2011. (St. Louis Federal Reserve).
- Extended stock valuations, which can add to anxieties.
- Earnings growth that has practically stalled thanks to recent weakness in energy companies and the stronger dollar.
Again, while it’s difficult to pinpoint the exact cause or causes of recent market volatility, internal market weakness and other factors created conditions that were ripe for an inevitable correction. We just needed some type of event or excuse to trigger selling.
Outlook Moving Forward
Short-term risks remain, including China and emerging markets and volatility could continue for the next several weeks.
Looking ahead, factors that may stabilize and support stocks include a continuation of good U.S. economic news. Or we could have to wait until third quarter corporate earnings releases in October, which may include commentary that China isn’t having a meaningfully negative impact on sales. Investment success generally comes with patience and fortitude, and with recent market moves, both can be tested on a weekly, if not daily, basis. At present, we still view the current circumstances as temporary, and plan to keep focused on the longer term and the months ahead. The current environment could be providing a possible short term buying opportunity to add funds to stock/equity exposure. We have tried to take advantage of current prices when possible, and will continue to monitor the situation on a regular basis. We will keep you advised.
We hope you are all having a great Labor Day weekend, and are able to spend some time relaxing as we say goodbye to the summer of 2015 and prepare to move into the final months of the year.
Your TEAM at F.I.G. Financial Advisory Services, Inc.
It is important that you do not use this e-mail to request or authorize the purchase or sale of any security or commodity, or to request any other transactions. Any such request, orders or instructions will not be accepted and will not be processed.
All items discussed in this report are for informational purposes only, are not advice of any kind, and are not intended as a solicitation to buy, hold, or sell any securities. Nothing contained herein constitutes tax, legal, insurance, or investment advice.
Stocks and bonds and commodities are not FDIC insured and can fall in value, and any investment information, securities and commodities mentioned in this report may not be suitable for everyone.
U.S. Treasury bonds and Treasury bills are guaranteed by the U.S. government and, if held to maturity, offer a fixed rate of return and guaranteed principal value. U.S. government bonds are issued and guaranteed as to the timely payment of principal and interest by the federal government. Treasury bills are certificates reflecting short-term (less than one year) obligations of the U.S. government.
Past performance is not a guarantee of future performance. Different investments involve different degrees of risk, and there can be no assurance that the future performance of any investment, security, commodity or investment strategy that is referenced will be profitable or be suitable for your portfolio.
The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.
Before making any investments or making any type of investment decision, please consult with your financial advisor and determine how a security may fit into your investment portfolio, how a decision may affect your financial position and how it may impact your financial goals.
All opinions are subject to change without notice in response to changing market and/or economic conditions.
1 The Dow Jones Industrials Average is an unmanaged index of 30 major companies which cannot be invested into directly. Past performance does not guarantee future results.
3 The S&P 500 Index is an unmanaged index of 500 larger companies which cannot be invested into directly. Past performance does not guarantee future results.
5 New York Mercantile Exchange front-month contract; Prices can and do vary; past performance does not guarantee future results.
6 London Bullion Market Association; gold fixing pricing at 3 p.m. London time; Prices can and do vary; past performance does not guarantee future results.