Market News – Week of August 28th, 2017

U.S. STOCKS RENEW THEIR CLIMB:

For the first time in three weeks, U.S. stocks posted a weekly gain. For the week, the S&P 500* increased 0.72% (up 9.12% for the year). The MSCI All Country X US* increased 1.41% (up 17.54% for the year). The Barclays Global Aggregate Bond Index* increased by 0.38% (up 7.13% for the year). The HFRX Global Hedge Fund Index* increased 0.34% (up 3.20% for the year).

LOW VOLUME COULD SPARK SOME VOLATILITY:

This time of year, leading up to Labor Day, tends to experience a lower volume of stock trading. On Friday, Dow Jones reported that total composite trading experienced its second lightest session of the year at about 18% lower than the average trading day. Low volume can spark sharper moves in the markets if there is a catalyst. A significant amount of economic data is coming in this week. The second quarter GDP reading will be released on Wednesday. July inflation data will be released on Thursday. August jobs data will come out on Friday. There will be other reports, and early in the week the extent of the damage in Texas from Hurricane Harvey might affect the markets.

OVERSPENDING ON HOUSING?:

The average American spends about 37% of take-home pay on housing. Saving enough over a forty-year career to be financially independent some day is challenging. The current U.S. savings rate is 5.3%. Making sure you balance how much you commit to housing over the long-term can be a key decision as you set up your long term spending and savings habits. A standard rule for lenders is that your monthly housing payment (principal, interest, taxes and insurance) should not take up more than 28% of your income.

SPIKE IN GAS PRICES?:

Gas prices could rise as much as 15 cents a gallon over the next couple of weeks according to Gasbuddy.com. The nation’s largest gasoline refining hub is in Texas. At least five refineries shut down ahead of the storm. Flooding, of course, is the key issue. If refineries are shut down two weeks or more, then higher gasoline prices might stay high for awhile. There is some slack due to a relatively high inventory and the end of the summer driving season, so if the refineries get back on line quickly there might not be much of a sustained effect.

WOULD YOU?:

A recent survey found that 41% of Americans would want to keep working if they won the lottery.

References:

WOULD YOU?: https://www.linkedin.com/pulse/whole-foods-get-cheaper-americans-overspend-housing-rundown
OVERSPENDING ON HOUSING?: http://www.businessinsider.com/how-to-save-more-money-2017-8?r=UK&IR=T
LOW VOLUME COULD SPARK SOME VOLATILITY: http://www.marketwatch.com/story/inflation-jobs-manufacturing-data-expected-to-push-low-volume-stock-market-around-2017-08-26
SPIKE IN GAS PRICES?: http://www.marketwatch.com/story/heres-how-much-more-you-might-pay-for-gasoline-because-of-hurricane-harvey-2017-08-25