Highlights of this Mid-Month Update:
- Monday, February 20th is President’s Day and the U.S. markets are closed as well as our offices.
- Initial 2016 1099 forms were mailed on February 15th for all taxable accounts.
- REMEMBER to utilize the “CSV” or Excel file to download all reportable transactions. Call us for help!
- S. stock indices continue to rally into mid-February.
- Interest rates fall slightly.
- Acceleration for economic growth in the making?
READ ON FOR FURTHER DETAILS……………………..
Monday, February 20th is the President’s Day holiday and the U.S. stock markets will be closed. Our offices will close as well and we will back for business as usual Tuesday morning. Monday will also be a banking holiday so any withdrawals from accounts at Trust Co. of America will delayed one business day to Tuesday.
2016 Tax Reporting:
Initial 1099 forms were mailed from Trust Co. of America on February 15th for all TAXABLE investment accounts. These initial 1099 forms are often subject to some “correction” and it might pay to delay filing your final return until after March 1st. Remember, if all you have is an IRA or other retirement account at Trust Co. of America, the only reporting you will receive is form 1099R ONLY IF any distributions were made to you in 2016. Also, REMEMBER: There is a “csv” (Excel) file that can be utilized to download all the reportable transactions from your taxable account to most tax preparation software programs. We can assist in providing all this for you to your tax preparer if you will simply provide us their name and email address. We can take care of the rest!
The major U.S. stock indices continued their rise during the first half of February. The Dow Jones Industrial Average closed higher last Friday ending at 20,624.05 and is now up 4.36% so far this year. The Standard & Poor’s 500 rose 1.51% last week and is 5.02% higher for 2017 as of February 17th. (Google Finance)
We continue to be pleased with the overall results of client portfolios relative to each risk level so far this year. We have been focused on our longer term outlook and do remain fairly positive for at least the next few months. There have been a few changes made to our portfolio allocations in early February, and we will monitor and made adjustments if warranted moving forward. Be sure to call today for your personal review to start off the New Year if you have not yet done so.
Interest rates have eased somewhat since the first of the year, and the yield for the 10 year U.S. Treasury closing last Friday at 2.42% compared with 2.45% to start the New Year. (U.S. Treasury) Mortgage rates inched higher last week with the average rate for a 30-year fixed mortgage ended Friday at 4.04% and the 15-year rate stood at 3.18% (Bankrate.com)
Since the economic recovery began in the second half of 2009 (NBER), the improvement can be characterized as far from stellar. Yes, we’ve seen businesses generate new jobs, but we’ve yet to see a calendar year in which Gross Domestic Product exceeded 3% on an annual basis (St. Louis Federal Reserve). That’s never happened in an economic recovery, even if we go all the way back to the 1930s.
Since the election, surveys of consumer confidence and small business confidence have surged (Conference Board, Natl. Federation of Independent Businesses). We’re not taking a positive or negative position on the election’s outcome, but are recognizing that nonpartisan surveys have detected a noticeable improvement in sentiment.
This doesn’t guarantee that economic activity will accelerate, but optimism would typically be viewed as the foundation for economic growth. That said, the seeds have been planted, and one sign of stronger growth may have come in the form of January’s retail sales data.
Retail sales in January rose a modest 0.4%, as the very volatile auto sector pulled back from December’s strong advance (U.S. Commerce Dept). The overall rise was nothing spectacular.
However, if we exclude autos, sales were up a strong 0.8%. Ex-autos, ex-gas stations (this helps to filter out changes in gas prices), sales advanced a strong 0.7%. Think about it. Retail sales can be artificially pushed higher or lower simply by large swings in gasoline prices. In both cases, these were the best readings since last April.
We always caution against reading too much into one month’s data point. We’ve seen temporary weakness and temporary strength before. This time, however, the increase is coinciding with the improvement in consumer confidence, which gives rise to cautious optimism that an acceleration may be underway. Moreover, the Conference Board’s Leading Index posted a solid advance in both December and January, which would also suggest growth may be poised to accelerate.
We appreciate the privilege to be of service and look forward to working with all of you in the years to come. Have a great week ahead!
Your TEAM at F.I.G. Financial Advisory Services, Inc.
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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.