Trade and Interest Rates
WEEKLY UPDATE - JUNE 18, 2018
In This Issue
Last week stocks showed mixed results as political headlines continued to dominate the news. The Dow lost 0.89% and the S&P 500 was almost flat with a 0.02% gain.[1] The NASDAQ, on the other hand, reached a record high on Thursday and ended the week up 1.32%.[2] Both the S&P 500 and NASDAQ experienced their 4 th week of gains in a row.[3] International stocks in the MSCI EAFE lost ground, posting a 0.52% decline.[4]  
Two Key Perspectives From Last Week

1. Trade tension continued.  
Spats with U.S. allies - including Canada - and ongoing threats of a trade war with China captured investors' attention last week. On Friday, equities briefly stumbled when the U.S. pledged new tariffs on Chinese goods, and China responded by promising the same level of tariffs on the U.S. [5] A true trade war could slow global economic growth, but the current tariff tension may be little more than negotiation tactics. [6] 

2. Interest rates increased. 
On Wednesday, June 13, the Federal Reserve raised its benchmark interest rates for the 2 nd time this year. Fed Chairman Powell said, "...the economy is doing very well. Most people who want to find jobs are finding them and unemployment and inflation are low." [7] The Fed believes economic growth will continue at a faster rate than they last predicted. They also project that unemployment will fall to 3.6% by the end of 2018. The Fed may raise rates twice more this year. [8]  

The Takeaway
Getting caught up in the news cycles and international headlines is easy, but they often provide little perspective on what may actually lie ahead for investors. Instead of trying to predict market performance, we encourage you to focus on the data.  

This week, we'll gain new perspectives on the housing market, as well as employment. The insight will continue to help us build a picture of where the economy is today-and how to help our clients make the most of their opportunities.  


ECONOMIC CALENDAR
Monday: Housing Market Index
Tuesday: Housing Starts
Wednesday: Existing Home Sales
Thursday: Jobless Claims




Notes: All index returns (except S&P 500) exclude reinvested dividends, and the 5-year and 10-year returns are annualized. The total returns for the S&P 500 assume reinvestment of dividends on the last day of the month. This may account for differences between the index returns published on  Morningstar.com and the index returns published elsewhere. International performance is represented by the MSCI EAFE Index. Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly .


"I have not failed. I've just found 10,000 ways that won't work."  

- Thomas A. Edison

3-Ingredient Chocolate Mousse
Serves 8

Ingredients:  
  • 8 ounces bittersweet chocolate (70% cacao or higher), chopped, plus chocolate shavings
  • 30 regular-size marshmallows
  • 2 cups heavy cream
Directions:  
  1. Mix chocolate, marshmallows, and ½ cup heavy cream in a large bowl. Microwave the mix on high for 2 minutes. Stir until the marshmallows melt and the mix is smooth. 
  2. If the mix is not melted after 2 minutes, microwave it again for 15 seconds. Repeat until the mix is melted, stirring between intervals.
  3. Let the mix cool to room temperature, 45 minutes.
  4. Once cooled, add the remaining cream into the bowl and mix until peaks form. 
  5. Pour ½ cup of mix into a small bowl to use as topping. Put it in the refrigerator.
  6. Take half of the remaining whipped cream and stir it completely into the cooled chocolate mixture. Then pour in the rest of it.
  7. Gently fill eight 4-ounce small glazed ceramic or glass bowls. 
  8. Put them into the refrigerator until the mix is set, 2 hours to overnight.
  9. Put the rest of the whipped cream on the servings, and sprinkle with shaved chocolate.
Recipe adapted from Good Housekeeping [9]

   

Put More Power in your Iron Shots

Some top PGA players, like Xander Schauffele, are packing some surprising power in their short iron shots.  

What's their secret?  

"Tour players like Xander hit their short irons so far because they make such precise contact and because they come through impact with slightly less loft on the club than when they started," said Bernie Najar, director of instruction at Caves Valley Golf Club in Owings, Maryland.

"Many weekend players have added loft to try to get the ball up in the air, and the clubhead isn't very stable. That's where you get shots flying with inconsistent distance and direction."

Najar said some golfers using short irons make the mistake of attempting to slash wildly at the ball.  

He recommends players start thinking beyond impact of the ball.  

"Hit some practice balls with a tee stuck in the ground at driver height 6 inches ahead of your ball, toward the target, just inside the target line," Najar said. "You're not trying to hit the tee, but you want to make the bottom of your swing as long a divot as you 
can toward that tee."

Najar said the technique may add 10 or more yards to your short shots.


Tip adapted from Golf Magazine[11]
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Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Diversification does not guarantee profit nor is it guaranteed to protect assets.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies.  

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia.
 
The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

You cannot invest directly in an index.

Consult your financial professional before making any investment decision.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative,  
Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

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[3] www.marketwatch.com/story/dow-futures-tumble-140-points-as-trade-fight-ratchets-up-2018-06-15

[4] 
www.msci.com/end-of-day-data-search

[8]  www.nytimes.com/2018/06/13/us/politics/federal-reserve-raises-interest-rates.html

[9]  www.goodhousekeeping.com/food-recipes/easy/a47667/3-ingredient-chocolate-mousse-recipe/
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David P. Little & Tyler D. Little
Little & Associates Wealth Management
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