Weekly Talking Points – July 26, 2018

Joel Faircloth, Aspen Wealth Strategies
  1. The S&P 500 was essentially flat last week returning just 0.04%, however there were some sizable moves throughout the week. Some of the biggest movers included United Continental Holdings (up 12.22%) and Netflix (down 8.78%).
  2. If anyone is looking for a reason to doubt the current recovery, the latest housing starts report gave them one. Housing starts not only declined 12.3% in June, but the decline was broad based nationally and included both single-family and multi-unit starts.  In addition, building permits declined 2.2% in June.  There just wasn’t much good is this report.  We have to keep in mind monthly data can be volatile, and the first six months of this year was still better than the first six months of last year. 
  3. Industrial production rose 0.6% in June. Auto production rose 7.7% for the month and is up 3.6% from a year ago.  Along the lines of monthly data can be volatile, this number surprised to the downside in May so the rebound in June is good to see.
  4. Retail sales rose 0.5% in June and with revisions to prior months rose a robust 1.0%. Year-over-year, sales are up 7.1%.  The rise was broad based as increases were seen in restaurants, bars, autos, and what’s called “non-store retailers” which includes internet and mail order outfits.  Clothing and accessory stores saw a small decline.
  5. Earnings season continues in earnest this week as Amazon.com, Alphabet (Google), Facebook, Exxon and many others announce this week.

Bottom Line

Tariffs and geopolitical risk continue to dominate headlines, despite another stellar (in my opinion) start to earnings season.  Valuations in terms of P/E ratios on the S&P 500 are actually lower now than they were at the beginning of the year, despite positive returns on the index.  Earnings growing faster than prices doesn’t happen often and should eventually reward patient investors in my opinion.

Joel P. Faircloth, MBA
Chief Financial Officer, Aspen Wealth Strategies
Wealth Advisor, RJFS  

Any opinions are those of Joel P Faircloth and not necessarily those of RJFS or Raymond James. The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

About the Author
Joel Faircloth

Joel Faircloth

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Joel Faircloth has built his career through formal education, working for some of the top firms in the country, and by challenging convention. He brings an extensive breadth and depth of experience in the financial services industry and has worn many hats—operations, client service, compliance, trader, marketer, writer, trainer, and investment manager. Joel is a seasoned investment manager, strategist and leader. He believes in the idea that one person or a group of like-minded people can help change an industry, and this is what led him to Aspen Wealth Strategies.

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