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Affinity “Mark” et Minute – July 31, 2014

Investment Commentary – July 30, 2014

Dow – 16,912.11 (7/29/14 close)
S&P 500 – 1,969.95 (7/29/14 close)
10-year Treasury – 2.46% (7/29/14 close)

The U.S. economy posted better-than-expected growth in the 2nd quarter, bouncing back from its worst performance in 5 years. U.S. GDP expanded at a seasonally adjusted annual rate of 4% in the 2nd quarter. Consumer spending, business investment and inventory stockpiling all rebounded strongly. Consumer spending, which makes up more than two-thirds of the economy, increased 2.5% in the 2nd quarter, more than double the 1.2% rise in the 1st quarter.

Earnings have generally beat expectations in the U.S. and Europe.

With 55% of the market cap of the S&P 500 having reported, S&P operating earnings are on track to be a record $28.98 for the 2nd quarter, representing 9.9% year-over-year growth and another record high in profit margins at 10.2%.

The interest rate environment has remained remarkably stable, with the yield on the 10-year U.S. Treasury stuck around 2.50%. Investors have continued to buy bonds amid persistent geopolitical unrest and a stable inflation environment. Indeed, last week provided more evidence that inflation is not an imminent threat. U.S. consumer inflation was in line with expectations, up 2.1% year-over-year, while core inflation actually surprised to the downside with a 0.1% increase. This put the year-over-year number at 1.9%. Despite recent fears over higher prices, for now, core inflation remains well anchored at its 10-year average.

In fixed income analysts believe opportunities exist in non-dollar bonds, high-yield corporates, short duration Inflation-indexed securities, and muni bonds.

Analysts continue to favor Technology, Energy, and Manufacturing.

The views presented are not intended to be relied on as a forecast, research or investment advice and are the opinions of the sources cited and are subject to change based on subsequent developments. They are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy.

Disclosures:
http://www.blackrock.com/investing/insights/weekly-commentary

Click to access cio-insights-macewen-q3-retail.pdf

https://www.oppenheimerfunds.com/advisors/article/us-earnings-shine-but-will-growth?lnksrc=ILBO1
http://www.usatoday.com/story/money/business/2014/07/30/gross-domestic-product-second-quarter/13336479/

About the Author: Mark Roberts

In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution. Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies. Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.” Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.

Affinity “Mark” et Minute – July 31, 2014

Affinity “Mark” et Minute – July 31, 2014

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About the Author: Mark Roberts