A Normal September?

A Normal September?

 

The media is very quick to point out September is typically one of the most difficult months for US stock market returns. I will caution you about past trends as so many have been broken since this economic recovery began in March of 2009. Remember this; “Sell in May Go Away”, which reflected that returns are typically stronger in the Fall and Winter Months of the Year. If you followed this motto, you may have not done very well since 2009.

 

“As normal”, September has started off with US and International Market Indexes down. For the week, the S&P 500 was down (1.03)%, the Nasdaq Composite down (2.55)%, the Russell 2000 down (1.58)% and the Dow almost breaking even, off slightly at (.19)%.   The Barclays US Aggregate Bond Index was also down for the week, off (.45)%.

 

Over the pond, the red was even deeper to begin September with the MSCI EAFE International Index down (2.83)% and the MSCI Emerging Market Index down (3.06)%.

 

Will September be typical or will the strength of US Consumer Spending continue to bolster business confidence, in spite of the myriad of distractions?  As always, time will tell.

 

We just learned that if the new Tariffs against China are implemented, Apple will have to raise prices to US Consumers for several of their products. Apple is being told in order to avoid this new expense, simply build your products in the US. I wonder if Labor costs could have something to do with what Apple may be thinking?

 

Economic Data

 

Last week’s employment report stated the US added 201,000 new jobs, exceeding expert estimates. The 2 months prior, however were revised downward. The big news, in my opinion, is that Hourly Earnings are now up 2.9% annually, which is the highest increase since November 2008.

 

This week brings reports on our Producer Price Index on Wednesday, which typically shows how much input costs have increased or decreased to companies.  On Thursday, the very important Consumer Price Index, as many are looking for signs that inflation will accelerate forcing the Federal Reserve to hike rates 2 more times this year.

 

TIDBITS

 

  • Housing: American households headed by individuals under 35 were split 44/56 between homeowners and renters in the 2nd quarter of 2004. In the second quarter 2018, the split was 36/64 with more individual choosing to rent than purchase.
  • Home prices have increased between June 30, 2017 and June 30, 2018 in all 50 states with Nevada’s 17.0% gain leading all states.
  • 48% of the outstanding loans made by Greek banks are “non-performing”. “Non-performing” typically means that principal and interest payments are NOT being made for at least 90 days.

 

Question of the Week

 

How much did the original Apple I computer retail for?

a) $24.99

b) $99.99

c) $999.99

d) $666.66

Answer to Last Week’s Question

 

52% of the 2.4 Million New Jobs created in the US in the 12 months ending July 31, 2018 were produced in just 6 states. Which state produced the largest number of new jobs?

a) California

b) Florida

c) New York

d) Texas

e) Washington

f) New Jersey

 

The answer is –

d) Texas