Market News – Week of September 18th, 2017

CONSUMER PRICES RISE IN AUGUST:

The Consumer Price Index rose 0.4% in August, the biggest monthly jump since January. Much of the rise was due to increased gasoline prices (thank you Harvey). But other prices, including rent and housing costs, also increased. The recent slowing of inflation to below 2.0% (which last January was trending toward 2.5%) has caused the Fed to ease back on increasing interest rates. If inflation trends pick back up, the Fed will likely add another increase. Most analysts are predicting the next increase in December. The Fed meets again this week.

BOUNCE:

U.S. stocks bounced back in a big way this past week, shrugging off the geopolitical events that caused a decline the week before. This week saw new geopolitical events with North Korea firing another rocket over Japan and a terrorist attack in London. However, major indices, including the S&P 500 notched new record highs. For the week, the S&P 500* increased 1.58% (up 11.68% for the year). The MSCI All Country X US* increased 0.88% (up 19.85% for the year). The Barclays Global Aggregate Bond Index* decreased by 1.06% (up 7.25% for the year). The HFRX Global Hedge Fund Index* increased 0.17% (up 4.08% for the year).

INDUSTRIAL GROWTH IS BLOWING IN THE WIND:

Before August, industrial production in the U.S. had increased for six consecutive months. Due mostly to the effects of Hurricane Harvey, industrial production decreased 0.9% for the month. Current industrial production is about 20% higher than the recession low and about the same as the pre-recession peak.

CHINA HAS THE WEST BY THE TUNGSTEN:

Tungsten is a material that is used to harden steel for items as varied as ballistic missiles and drill bits. The biggest consumers of this metal are the auto and mining industries and it is a critical material to all western economies. 80% of this metal currently comes from China. The price of Tungsten has surged by 52% since early July because China has purposely reduced production. The Chinese government claims it is environmental concerns that has caused the slowdown in the mining of this metal.

IDENTITY THEFT:

Equifax is one of the three large credit bureaus in the United States. Financial institutions use credit bureau data to make credit decisions. On September 7th, Equifax announced that its systems were breached for 143 million Americans! This breach includes personally identifiable information such as Social Security numbers, birthdates, addresses, etc.
Take and protect yourself:
Find out if this breach affects you. Equifax has set up https://www.equifaxsecurity2017.com to determine if you are impacted by the breach. According to Equifax, you will be asked to provide your last name and the last six digits of your Social Security number. If your data is breached, you will be enrolled in TrustedID credit monitoring. If your data is not breached, you will receive a message stating, “Your enrollment date for TrustedID Premier is: xx/xx/2017. Please be sure to mark your calendar as you will not receive additional reminders.”
Check your credit reports. Look for new accounts that you did not open or activities that are unfamiliar. If you see suspicious or unfamiliar entries, then I recommend you immediately freeze your credit reports or sign up for a service like LifeLock to give yourself a power assist.
Freezing your credit reports. Contact Equifax, Experian and Trans Union to request a freeze on your account. Freezing prevents all companies from accessing your credit information. It will, however, prevent other legitimate companies from seeing your credit. You can lift this freeze for those specific companies. To freeze your credit, contact each of the credit bureaus using these phone numbers: Equifax: 1-800-349-9960, Experian: 1-888-397-3742, TransUnion: 1-888-909-8872.When you freeze your credit, you (or anyone masquerading as you) will be required to provide the PIN to un-freeze your account to obtain your credit information.

References:

INDUSTRIAL GROWTH IS BLOWING IN THE WIND: http://www.calculatedriskblog.com/2017/09/industrial-production-decreased-09-in.html
CHINA HAS THE WEST BY THE TUNGSTEN: https://www.bloomberg.com/news/articles/2017-09-10/china-sends-one-of-the-west-s-most-critical-materials-soaring
CONSUMER PRICES RISE IN AUGUST: https://www.wsj.com/articles/u-s-consumer-prices-rose-0-4-in-august-1505392325?tesla=y
IDENTITY THEFT: http://www.mysherpa.com/2017/09/14/equifax-data-breach-need-know/