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Newsletter: In the Markets – Week-Ending July 21^st, 2017

Crystal Brook Advisors

We Make Financial Planning Crystal Clear™

United States: The LEI increased 0.6 percent in June, its largest monthly increase since December 2014. The June gain also marks the tenth consecutive month in which the index moved higher.   Eight of the components added to the topline figure, while jobless claims was the only component that weighed on the index, shaving 0.05 percentage points off the index. Average hours worked was flat on the month. (1)

Europe:  As Europe’s era of easy money slowly draws to a close, the talk in Frankfurt and London is of bond yields, exchange rates and core inflation. In this medieval city at the foot of the Apennines, it’s all about trains. (2)  A stimulus program by the European Central Bank helped revive the train factory that is the largest employer in Pistoia, hauling the city out of a deep economic slump and putting people back to work. (2)  But the bank is now preparing to take away that stimulus, raising an existential question for Pistoia, a case study in what central bank largess has achieved, and in what might happen when it is no longer there. (2)

Asia:  The Asian Development Bank raised its 2017 and 2018 growth forecasts for the region, reflecting rising exports as manufacturers of smartphones to cars to other consumer goods benefited from improving global demand. (3)  Developing Asia – made up of 45 countries in the Asia-Pacific region – is expected to grow 5.9 percent and 5.8 percent this year and next, the Manila-based ADB said in the update of its Asian Development Outlook on Thursday. (3)

Latin America:  SCAN the Latin American newspapers and it is hard to find much sign of a convincing economic recovery. True, Brazil’s industrial production is perking up after a two-year slump. Mexico’s energy reform is starting to pay off, at last, with a big new oil discovery by an international consortium. And Peruvian restaurateurs celebrated “National Char-roasted Chicken” day on July 16th, hoping to dispatch a million birds, up from last year’s 720,000. (4)

Monday 7/17  

• Nearly 500 stocks on the small-cap ChiNext index plunged before hitting the 10 percent lower limit, according to Reuters. The technology-heavy index dropped 5.1 percent to close at its lowest since Jan. 16, 2015, according to FactSet. Some news outlets deemed it a “Black Monday” for Chinese stocks. (5)

Tuesday 7/18

• Stocks ended Tuesday’s trading day mixed, with the tech-heavy Nasdaq leading the way and the Dow Jones industrial average lagging. (6)

Wednesday 7/19

• It’s paying $4.2 billion to buy Reckitt Benckiser’s (RBGLY) condiments business, giving it control of brands such as Frank’s RedHot Hot Sauce and French’s Mustard. (7)

Thursday 7/20

• S. stock indexes essentially hit the snooze bar Thursday as investors were relieved the European Central Bank didn’t announce any changes to its stimulus policies. (8)

Friday 7/21

• The Dow Jones Industrial Average DJIA, -0.15% declined 49 points, or 0.2%, to 21,562. The S&P 500 index SPX, -0.04% slid 4 points, or 0.2%, at 2,469 and the Nasdaq Composite Index COMP, -0.04%  dropped 11 points, or 0.2%, to 6,379. (9)

Contributor: Thomas Padula

Source:

(1) Wells Fargo Economic Group

(2) The New York Times

(3) Reuters

(4) The Economist

(5) CNBC

(6) Business Insider

(7) CNN Money

(8) ABC News

(9) Market Watch