Weekly Market Snapshot – September 2, 2019

Created by: Sam Tenney

Federal Reserve Chicago’s Purchasing Managers Index (PMI) rose a drastic 6% in August’s PMI report from 44.4 to 50.4. Consumer sentiment for the area dropped 2.2% to 89.8, Consumer sentiment has a lagging effect on consumption numbers, meaning that consumer sales are likely to decrease in the future, but current Chicago PMI suggest an immediate increase in consumption.¹
Employment numbers year over year have been revised by the Bureau of Labor statistics, the revision is about 501,000 less jobs created then initially reported by the Bureau, a -0.3% overall decrease.²
Seattle home prices fell to -1.32% on average year over year. Regional housing prices are generally cyclical indicators of how we expect real estate to perform. ³
The Argentina government has been rated “selectively default” by Standard and Poor’s rating agency after failing to sell short-term bonds to investors. This is the second time the government has been declared default since the turn of the millennium.¹

SOURCES

1. https://seekingalpha.com/research/48075864-eric-basmajian/5344567-daily-…

2. https://www.marketwatch.com/story/us-created-500000-fewer-jobs-since-201…

3. https://www.ft.com/content/9161f0c0-caff-11e9-a1f4-3669401ba76f

Please note by using any of the links provided for your convenience, you will be leaving Fidelis Wealth Advisors website. The hyperlinks are to websites and servers maintained by third parties. We do not control, evaluate, endorse, or guarantee content found in those sites. Your use of such sites is at your own risk.

This blog is general communication being provided for informational purposes only. This information is in no way a solicitation or offer to sell securities or investment advisory services. It is educational in nature and not to be taken as advice or a recommendation for any specific investment product or investment strategy. This does not contain sufficient information to support an investment decision. Any investment or investment strategy mentioned may not be suitable for all investors or in their best interest. Statistical information, quotes, charts, references to articles or any other quoted statement or statements regarding market or other financial information is obtained from sources which we believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. All rights are reserved. No part of this blog including text, graphics, et al, may be reproduced or copied in any format, electronic, print, et al, without written consent from Fidelis Wealth Advisors, LLC. Fidelis Wealth Advisors does not provide legal or tax advice. Please be advised to consult with your investment advisor, attorney or tax professional before making any investment decisions.

Should schools teach Financial Literacy?

Created by: Sam Tenney

It’s no secret that the US has a student debt problem. Most US college graduates leave college owing $29,800 in debt on average and this is an almost 50% increase from just 10 years ago.[1] One solution may be teaching financial literacy to college and high school students. One viewpoint is that including a personal finance course requirement would promote better savings and loan management amongst graduates moving into the workforce. Students would be more conscious of where they could cut costs and save, and some statistics show it could even improve graduation rates![2]

Recently both Iowa and Kentucky passed laws requiring half a semester of financial literacy courses be taken by high school students in order to graduate. These laws take effect in 2020 and 2025 respectively. The reception has been positive by teachers and students alike. One teacher, Lexi Schaffer in Iowa said, “I think it is so important to teach high schoolers good financial literacy skills now so that they can really start creating those good habits early on that will take them into their adulthood.”[3]

A study by the Champlain’s Financial College Center found “Students who learn personal finance from these trained teachers showed significant knowledge gains in all test topics, while a control group of students who did not receive personal finance education dropped slightly in knowledge in all but one area.”[4]

Students who take a financial literacy course are also better prepared to face the real world with savings, and save more. according to a survey conducted by Ramsey Research in 2016. Nearly two out of three high school students who had taken a personal finance course reported they were already earning an average of $3,000 a year.^[4] Furthermore Nearly 80% said they understand what a 401(k) is and how it works, compared to just 63% of students who had not taken such a course.[5]

Fidelis Wealth Advisors believes in developing a deep relationship with our clients, and teaching them the financial principals that will enhance their lives and help them achieve their goals, starting with our youngest investors. With financial planning being such an important part of everyday life the impact of 17% more students understanding how to properly save and budget sets these students up for a much brighter future.

1. https://www.daveramsey.com/research/students-and-money?ictid=QXTGI4631

2. https://www.daveramsey.com/blog/should-financial-literacy-be-taught-in-schools

3. https://www.edsurge.com/news/2019-03-19-this-teacher-makes-financial-literacy-personal-for-students

4. https://www.champlain.edu/centers-of-experience/center-for-financial-literacy/report-national-high-school-financial-literacy/the-case-for-high-school-financial-literacy

5. https://www.consumerismcommentary.com/schools-teach-personal-finance-rebuttal

This blog is general communication being provided for informational purposes only. This information is in no way a solicitation or offer to sell securities or investment advisory services. It is educational in nature and not to be taken as advice or a recommendation for any specific investment product or investment strategy. This does not contain sufficient information to support an investment decision Any investment or investment strategy mentioned may not be suitable for all investors or in their best interest. Statistical information, quotes, charts, references to articles or any other quoted statement or statements regarding market or other financial information is obtained from sources which we believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. All rights are reserved. No part of this blog including text, graphics, et al, may be reproduced or copied in any format, electronic, print, et al, without written consent from Fidelis Wealth Advisors, LLC. Fidelis Wealth Advisors does not provide legal or tax advice. Please be advised to consult with your investment advisor, attorney or tax professional before making any investment decisions

Can becoming healthier make you rich?

By Lorie Jones

Many people believe a healthy lifestyle requires expensive gym memberships and large time commitments, however getting your bank account in shape could be as easy as getting yourself in shape! The immediate benefits include saving on food costs and better life insurance premiums, but a healthy lifestyle will also provide you with invaluable goal setting techniques and a longer lifespan with a few simple changes.

Food is an important part of healthy living, and the average person spends about $3,000 a year on their food, which makes up about 6% of an average yearly income.[3] Many people believe that junk food is cheaper than traditionally healthy foods because junk food has a lower cost per calorie, but that is not true. Processed junk foods that are high in calories do not provide quality vitamins and nutrients that will keep you filled longer and help your body build healthy bones and muscles. Grains, Fruits, and Veggies all provide long lasting nutritional support, and were all found to be cheaper sources of food long-term for households then junk food in a recent USDA study. [2] This not only makes your feel better every day, but it keeps you out of the doctor’s office, which leads to a healthier bank balance as well.

Life insurance is another big spending area for those who buy it (and at Fidelis Wealth we recommend you have an appropriate level of life insurance to protect against any unforeseen life events). The biggest and easiest way to cut down your monthly life insurance payments would be to quit smoking if you have a smoking habit. On average people who smoke end up paying 300%+ more than a non-smoker of the same age, and those costs add up quick! Other unhealthy lifestyles choices also affect your payments like being obese. Obesity will generally cost you an extra $20 more a month on your life insurance premiums and people with high cholesterol will pay upwards of $30.[4] Just 4 miles of running a week (which is only about 20 minutes 4 days a week, if your run is more of a brisk walk like me) reduces your risk of obesity and cholesterol by 45%, so running is a cheap and effective way to save some money on those payments!

Most importantly, the life skills you develop from dedicating yourself to a healthy lifestyle will translate to more money in your investment accounts as well. It takes self-discipline both to get and stay healthy, and to increase your savings accounts. Most American’s have less than $4,000 dollars in savings at any time. Imagine taking the money that you are saving on insurance and doctors’ visits, and saving that instead. Emergencies and accidents can happen in life, almost 39% of Americans would not have the savings to deal with such emergencies according to one savings study.[5] Being fiscally responsible can help you put away that money so you can feel secure knowing you have it safe for a rainy day.

A few simple steps, done consistently over time can build a healthier body, a healthier lifestyle, a healthier bank account, and most importantly, a healthier you!

SOURCES:

1. https://www.foodnetwork.com/healthyeats/2012/06/does-healthy-food-cost-more-than-junk-food

2. www.foodnetwork.com/healthyeats/2012/06/does-healthy-food-cost-more-than…

3. https://www.creditdonkey.com/average-cost-food-per-month.html

4. https://www.valuepenguin.com/average-cost-life-insurance

5. https://www.cnbc.com/2018/01/18/few-americans-have-enough-savings-to-cover-a-1000-emergency.html

Weekly Market Snapshot – August 26th, 2019

Created by: Sam Tenney

Major Market Indices Dow Jones (-2.4%) and S&P 500 (-2.6%) fell on Friday, August 23rd upon news of Chinese plans to leverage tariffs on $75 Billion of US imports. ¹
US Purchasing Managers Index hit 10-year lows this week dropping to 49.9. Numbers below 50 represent a contractionary environment for country-wide manufacturer purchasing.²
In Jerome Powell’s speech on “Challenges for Monetary Policy” during the Jackson Hole symposium on August 23rd, he said that “Trade policy uncertainty may pose challenges in the Fed’s framework” and that the “Fed will respond as necessary to promote stability” in regard to interest rate policy.³

SOURCES

1. https://www.marketwatch.com/story/us-dollar-sinks-as-trump-tweets-stoke-…

2. https://seekingalpha.com/article/4287881-u-s-flash-manufacturing-pmi-sho…

3. https://www.federalreserve.gov/newsevents/speech/powell20190823a.htm

Weekly Market Snapshot – August 19th, 2019

Created by: Sam Tenney

The 2-year and 10-year US Treasury yield curve inverted briefly intraday Wednesday, August 14th for the first time since 2005. This 2/10 inversion may be an early sign of recession, since it has proceeded the last 5 recessionary periods.¹
General Electric has been accused of hiding monetary losses in the amount of 38.1 Billion by the firm who uncovered Bernie Madoff’s Ponzi scheme. If this is true GE is currently operating on negative $20 Billion in its long term care cash flow and has a true debt to equity Ratio of 17:1, putting its credit rating in deep junk territory. The DOJ and SEC are investigating the accuracy of the accusations.²
The week ahead will see a large focus on this month’s Global PMI numbers, as well as the Jackson Hole Economic Policy Symposium which begins on Friday, August 23rd.³

SOURCES

1. https://www.marketwatch.com/story/the-us-treasury-2-10-year-yield-spread…

2. https://markets.businessinsider.com/news/stocks/ge-fraud-report-accounti…

3. Weekly Market Recap.” Weekly Market Recap – J.P. Morgan Asset Management, JP Morgan Chase, 12 August 2019, am.jpmorgan.com/us/en/asset-management/gim/adv/insights/weekly-market-recap.

Weekly Market Snapshot – August 12th, 2019

Created by: Sam Tenney

On Monday, August 5th, major US indices closed the day with the largest drop of the year, Dow (-2.9%) and S&P (-3.0%).¹
Also on August 5th, The US Treasury released an official statement after market close acknowledging the Chinese were manipulating their currency for international trade benefits.¹
As of August 12th, 90% of S&P 500 companies have reported second quarter earnings, showing revenue growth currently at 4.1% and earnings per share are slightly down at -0.7%. ²
German industrial production growth hit new 10-year lows, driven largely by a slowdown in German auto-production. This is a sign of continuing economic slowdown; German second quarter GDP results will be released August 14th, which may confirm economic trends.³
Euro Area bond yields dropped into negative territory across the entire yield curve as of August 7th, 2019. Expectations of future growth and inflation are declining across Europe.⁴

SOURCES

1. https://www.wsj.com/articles/chinas-currency-weakening-escalates-trade-w….

2. https://lplresearch.com/2019/08/12/market-update-mon-aug-12-2019-lpl-fin…

3. https://seekingalpha.com/research/48075864-eric-basmajian/ Daily Data Flash: Producer Price Index, August 9 2019.

4. Weekly Market Recap.” Weekly Market Recap – J.P. Morgan Asset Management, JP Morgan Chase, 12 August 2019, am.jpmorgan.com/us/en/asset-management/gim/adv/insights/weekly-market-recap.

Weekly Market Snapshot – August 5th, 2019

Created by: Sam Tenney

August 1st President Trump tweeted his intent to impose a 10% tariff on the remaining 300 billion of Chinese imports starting September 1st.¹
CNY/USD Dollar trading pair reaches 10-Year high of 7.05 CNY/USD due to mounting pressure of tariffs on the Chinese economy. There is speculation this could be an action by the Chinese to dilute trade tariffs set in place by the US.²
US Purchasing Managers Index (PMI) Data Falls to 49.3 in July, continuing a decline and reaching new 10-year lows. ²
The Federal Reserve met on Wednesday, July 30th and settled on a 25 basis point cut to the rate. Chairman Jerome Powell cited his previous thoughts on sustaining the expansion of the economy by lowering rates.²
Bond market yields re-invert on the 3-month and 2-year yields, dropping lower and pricing in fully another 25-basis point cut by the Federal Reserve who are meeting in September. The 30-year US treasury falls to 2.29%, near the federal funds rate of 2-2.25%.³

SOURCES

1. https://am.jpmorgan.com/us/en/asset-management/gim/adv/insights/weekly-m…, August 5, 2019.

2. https://seekingalpha.com/research/48075864-eric-basmajian/5334302-weeken…

3. https://www.marketwatch.com/story/china-sensitive-stocks-slide-sharply-a…

Weekly Market Snapshot – July 29, 2019

Created by: Sam Tenney

China faces slowing growth as trade falls for the month with exports down -1.7% and imports down -7.3% for June. China’s Gross Domestic Product growth slowed to 6.2% year-over-year, the lowest growth in 30 years.¹
Investors are taking more money out of stock mutual funds ahead of the Federal Reserve meeting reaching 8.4 billion while money market account inflows reached 26 billion. This is the fifth consecutive week of money market inflows.²
The 3-month and 10-year treasuries closed the yield spread, as of 7/26/19 10-year treasuries yielded 2.08% and 3-month yields are 2.06%. The 2-year spread is still inverted at 1.83% yield.²
Mortgage rates press into 3-year lows of 30-year fixed rates at 3.75%. This coincides with a slowing growth in single family home sales.³
European Central Bank (ECB) meeting this week included plans to raise the government holdings ceiling and lower interest rates. The ECB is expecting to purchase more assets by September with the raised asset ceiling in effect, commonly reffered to as quantitative easing .³

SOURCES

1. https://am.jpmorgan.com/us/en/asset-management/gim/adv/insights/weekly-m…, July 26, 2019.

2. https://seekingalpha.com/research/48075864-eric-basmajian/5327491-weekly…

3. https://www.bloomberg.com/news/articles/2019-07-25/ecb-signals-rate-cut-…

Weekly Market Snapshot – July 15, 2019

Created by: Sam Tenney

Federal Reserve Chairman, Jerome Powell, testified before congress on 7/11/2019. Powell cited slowing business investment, low inflation, and uncertainties in trade agreements as reasons to “act as appropriate” and sustain the current economic expansion. Rate cut expectations remain at 25 basis points for the July Federal Reserve meeting.
European zone industrial production rose for the first time since January jumping .9%. With stronger economic data the bond market yields may start to trend upward again.
Core Consumer Price Index (CPI) rose slightly to 2.1% for June. ³
Europe has created a workaround for the Society for Worldwide Interbank Financial Telecommunications (SWIFT) system in order to move money into Iran with the creation of the Instrument in Support of Trade Exchanges (INSTEX).

We are here to answer any questions and we thank you for your friendship and trust.

SOURCES

1. https://www.marketwatch.com/story/gap-between-sp-500s-gains-and-disappointing-us-data-largest-on-record-2019-07-05

2. https://am.jpmorgan.com/us/en/asset-management/gim/adv/insights/weekly-market-recap, July 8, 2019.

3. http://www.vantagefinancial.com/blog/market-minute-may-14-2019.

Weekly Market Snapshot – July 8, 2019

Created by: Sam Tenney

Last week was a shortened market week with Independence Day. Hopefully you all enjoyed a wonderful week celebrating our freedoms and those who sacrifice(d) for us.

Only real economic news for the week was the new jobs report came out on Friday. Here are a few highlights.

New Jobs created totaled 224,000 beating out predictions of 165,000 jobs for June. ¹
In response the bonds market predictions of a 0.25% (25 basis points) Fed rate cut have dropped to 92.5% for July instead of 100%. ²
This also largely eliminated a 0.50% (50 basis points) cut probability later this month.
There is a large gap between US stocks prices compared to current economic data (as measured by the Macro surprise indicator) ¹. The stock market seems to be banking on bad economic data that will push the Fed to lower rates, which could push stock prices higher. At some point, bad economic data impacts risk assets like stocks, thus a rate cut may not make an immediate impact as fundamentals deteriorate, earnings fall, prices will too. ³
One of the world’s largest banks is in trouble. Duestche Bank Germany outlines plan to reduce workforce, restructure debts and branches in order to try to turn profitable again. DBG is Germany’s largest bank.

We are here to answer any questions and we thank you for your friendship and trust.