What does Director Comey have to do with the market?

With some of the news coming out about about Director Comey and the impact it is having on our political environment (and market), we wanted to share a research piece we read. In answer to the question we placed at the head of this email, there is no direct connection between Director Comey and the markets. Earnings have been strong, economic data has been good, and we believe fundamentals will continue to do well. However, there are some legitimate concerns over the news coming out and whether there is any truth to the claims. Markets don't like uncertainty, and with the odds of a turnover in Washington increasing as they have, uncertainty has risen.

That said, Dan Clifton from Stategas said, "The past eight days are like nothing we have seen in politics, ever. The mood in DC is very different today than in the past couple of months. We are heading into a larger period of uncertainty, one in which there is a growing doubt Trump will be President of the United States in 2018.

Betting odds this morning place a 33 percent probability that Trump will be impeached in 2017, up from 24 percent yesterday and 13 percent a week ago.

Our big takeaway this morning is that if Comey goes on the record in sworn Congressional testimony and says that Trump tried to obstruct a federal investigation, the appetite in Congress to protect the president will fall considerably. But if this is just another anonymous leaked story to smear the president (many of the recent anonymous leaks have proven to be false), then we can continue this blind leak, more uncertainty game, but never get any real direction one way or another. Comey could face legal risks if he goes on the record with this claim, but did not report the incident at the time. This latter point has some people believing the memo is just a smear tool which is why going on the record will be a key data point.

Impeachment is a big and complicated step that would require Republicans to turn on a president of their own party. Impeachment requires 67 votes in the Senate, but the thought is no longer a Democratic wish list. Every Republican member of Congress has the word impeachment in his or her head this morning. Democrats smell blood in the water. The press is in a feeding frenzy. Trump Administration staffers have become demoralized. We cannot begin to explain how dour the mood is on Capitol Hill among Republicans.

Every morning since Donald Trump has been elected president, we have awakened to negative news stories about the president and his administration. Upon reading the negative coverage, the first question we ask is “what does this mean for earnings?” The second and related question is “what does this mean for the agenda getting through from a regulatory and legislative perspective that can further enhance earnings?”

Very few stories over the last six months had much impact on these two questions. Most of the stories were based on information from people who did not want Trump to be president and were grinding an axe. There was a lot of noise and even some smoke due to the president being associated with bad characters. But at the same time, earnings have surprised to the upside thus negating the political noise from Washington.

We want to remind everyone we are very suspicious of anonymous leaks. A number of damaging leaks in the past week have been proven completely wrong such as whether the FBI asked for more resources for the Russia investigation and whether the Deputy Attorney General threatened to quit. Moreover, the Senate Intelligence Committee Chairman is on the tape this morning saying that Comey was very forthcoming to the committee and never mentioned the events reported in last night’s news. The Acting FBI Director further testified last week that he had no evidence of the Russia investigation being obstructed. The sudden shift is noteworthy.

All of that being said, last night’s news becomes a much bigger deal if: 1) Comey goes on record and 2) Comey claims Trump tried to obstruct a federal investigation. Why this gives us some pause is that if Comey does go on record, he could face legal jeopardy if he did not disclose these conversations immediately. We urge caution here as we don’t know all of the facts.

But Comey going on the record with sworn Congressional testimony saying the president tried to obstruct a federal investigation would be a real game changer. It does not really matter if this becomes a “Comey said, Trump said” thing. Trump’s approval rating is 38 percent. Republicans see the generic ballot of Congressional control flashing a wave election. There may not be much of an appetite to protect the president. Congressional Republicans have a transactional relationship with Trump, which is different than the support Reagan and Clinton had in previous administrations.

 

Potential options in that scenario:

  1. Republicans Assign A Special Prosecutor To Investigate Trump’s Dealings With Comey: Democrats have been pushing for this on the Russia investigation and Republicans have been reluctant. Two options exist here for Republicans. First, Republicans can appoint a Special Prosecutor to investigate the circumstances around Comey’s firing. This could buy some time, displace the issue for a while, and then allow Republicans to move on the policy agenda to get some policy wins on the board. Another option would be to have a Special Prosecutor for Russia which could take over a year of investigation and drag out some of this building uncertainty.
  2. Trump Resigns And Pence Takes Over: This would be the most elegant solution for markets since it leads to an easier transition, absent the idea that the bureaucracy successfully took out a sitting president (which will have to be dealt with later). Our experience is that Trump is a fighter and when his back is against the wall, he fights and usually wins. We see this option taking place if the votes are there to actually impeach the president and the Republicans come to Trump and let him know he should step aside to avoid the vote.
  3. Congressional Republicans Move On Impeaching The President: If Trump does not want to go voluntarily, Republicans may be forced into impeachment. We cannot underscore how tough this option would be with a Republican House, with some very loyal to the president needing to move first followed by 67 votes in the Senate. But that probability is no longer zero.
  4. The 25th Amendment Is Invoked To Replace The President: I cannot even believe I am using the phrase 25th Amendment in a client note. How far we have come. This would empower the vice president and a majority of the officers of Trump’s executive departments to remove him from office if the president is “unable to discharge the powers and duties of his office.” Should the president contest, a 2/3 vote in Congress is needed to confirm the vice president and executive officers’ decision. Some in Congress like this option better because it is the president’s own administration that would start the proceedings and gives cover should they need to vote. Conversely, this is a stretched reading of the amendment which was more designed for a president wounded by an assassination attempt or suffering from health factors. But this option came up in three different conversations yesterday.

The fact that we had to lay these options out is indicative of an environment in which uncertainty is going higher, driven by an increasing probability of some premature change at the highest level of the United States government.

 

Investors need to keep in mind some parts of the agenda will continue regardless of the background noise.

  1. Financial Deregulation: We believe the President is close to appointing the Vice-Chair of the Federal Reserve for Supervision. This appointment will set the plan in motion to deregulate the banking sector via the Federal Reserve stress tests in 2018. The Senate will need to approve the appointment, but it looks like Randal Quarles will get the needed votes.
  2. Energy Infrastructure: Last week the President announced new appointments to the Federal Energy Regulatory Commission (FERC). These appointments are needed for a quorum on the commission to approve $50bn of energy infrastructure projects via pipeline and LNG export terminals. We continue to believe investors are missing this theme, which is not really impacted by current headlines.
  3. Tax Reform: Conversely, if the current headlines turn to have a bigger bark than bite, and we have many examples of sensational headlines being proven wrong in recent weeks, the agenda can be turned on fairly quickly. Our base case has been that as Trump gets into trouble, Congressional Republicans will need legislative victories. This has been somewhat out of consensus, but we believe the Senate Finance Committee is rallying around a tax reform plan that reduces the corporate tax rate to 23-25 percent without a border adjustment or major changes to the interest deduction. We have seen Congressional movement in the past week on healthcare and tax reform that has been constructive.

 

We also have some concerns:

  1. FY 2018 Budget: Congress needs to pass a FY 2018 budget to create the reconciliation instruction for tax reform. With the inability to balance the budget over 10 years, reaching an agreement may be difficult. This will be a Republican-only exercise and therefore the party needs to be on the same page.
  2. Debt Ceiling: Republicans have relied on Democratic votes for key budget and debt ceiling votes. Democrats will now hold them hostage over Trump investigations. Republicans are going to need to sit in a room and figure out how to get the entire party on board with raising the debt ceiling to avoid Democratic leverage. This may be the toughest fight of the year and could be happening in the Fall as the investigations and negative headlines creep up."

Source: Strategas

As always, if you have any questions or concerns you'd like to discuss, please call or email us.

Best regards,

Fortem Financial

 


Fortem Financial 2016. All rights reserved. Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Carefully consider investment objectives, risk factors and charges and expenses before investing.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

Political circus overshadows some good news for the economy…Big retailers still under pressure but Consumers are still strong……

Stocks were mixed-to-down last week as political events dominated headlines. The firing of FBI Director James Comey might have impeded the administration’s tax reform and infrastructure agendas; so far, though, the market’s non-reaction may actually accelerate policymaking timelines as the administration looks ahead. Friday’s announcement of certain trade agreements with China highlighted progress on discussions that began following the President’s meeting last month with Chinese President Xi Jinping. In the deal, China will open its markets to U.S. beef producers and liquefied natural gas; China also agreed to issue guidelines to begin the licensing process for payment processing networks and credit ratings agencies. The deals counter fears of protectionism and suggest President Trump is actively working to lower the trade deficit and expand American business interests. Elsewhere, the European economy is beginning to show signs of life; Germany’s preliminary GDP data for 1Q revealed the economy expanded 1.7% year-over-year. France’s election of centrist Emmanuel Macron should contribute to political cohesiveness and raise prospects for economic reform in the region. Meanwhile, crude oil prices rose for the first time in four weeks; weekly oil inventory reports showed a steeper than expected drop in crude stockpiles as the peak driving season begins. Also, when OPEC meets on May 25th, the cartel is widely expected to extend its production freeze agreement for another six to nine months.

Earnings season is drawing to a close; overall results from more than 90% of companies in the S&P 500® Index include a 14.4% increase in earnings and an 8.7% increase in sales. The results from sectors most responsive to periods of economic growth, such as Industrials and Energy, were particularly strong. This week, ocean-borne container transportation companies highlighted improving shipping volumes amidst a recovery in global trade. Retail sales were also in focus with disappointing updates from Macy’s, Nordstrom, and J.C. Penney. Declining year-over-year sales underscore the pressures facing traditional mall-based retailers; these companies have initiated aggressive cost cutting programs, including store closures, as the industry adjusts to rapidly shifting consumer preferences. Online and off-price retailers, though, continue to prosper in the new retail landscape. Early estimates for the second quarter earnings season anticipate earnings growth of 6.8% and sales growth of 4.8%. The continued positive momentum in corporate results should support equity market valuations. Investors, though, will likely shift their attention to the Federal Reserve’s meeting on June 13-14. Concerns regarding “policy normalization” (i.e., a gradual reduction of the Fed’s expanded bond inventory) could lead to elevated volatility over the ensuing weeks.

News of the consumer's death has traveled fast.

It's not hard to find stories of beleaguered and battle-wearied consumers. Famed retail giants are slashing revenue and earnings outlooks, creating worries about retail space in general and malls in particular. Auto sales are slowing, auto loan delinquencies are rising, while delinquent student loans create their own paroxysms of fear in analyst minds.

But, just as with many negative forecasts over these past eight years, the news of the consumer's death is greatly exaggerated. On average, consumers are in good shape.

The best news for the consumer is that the labor market continues to heal. At 4.4%, the unemployment rate is the lowest since 2007. Some watch what they call the "true" unemployment rate, which includes discouraged workers as well as part-timers who claim they'd prefer full-time jobs – that's 8.6%, also the lowest since 2007. Meanwhile, wages and salaries are up 5.5% in the past year, outstripping inflation.

Meanwhile, consumer debt burdens are down. The Federal Reserve keeps track of the "financial obligations ratio," which measures the share of after-tax income consumers need to meet monthly debt service payments plus regular (non-debt) payments such as renting a home, leasing a car, property taxes, and homeowners' insurance. At 15.4% of after-tax income, these payments are near the lowest since the early 1980s.

Yes, serious (90-days or more) auto loan and student loan delinquencies are at record highs. But serious delinquencies, for all loans – including auto and student loans, plus mortgages, home-equity, credit card, and other consumer debts are down substantially in the past seven years, to $415 billion at the end of 2016 versus $1.04 trillion at the end of 2009.

Don't get us wrong. The rapid and persistent rise in student loan debt is a problem. Some indebted students are finding they must put off borrowing to buy a home, for example. But these loans pay colleges and universities to employ professors and administrators who spend it, meaning it's a transfer payment to the self-described "educator" class.

Unlike a subprime loan that facilitates the building of a home (an asset), the real problem with student loans is they often generate a product that decries wealth creation. But that's true whether they borrow the money they use to pay for college or pay for it out of their own pockets (or their parents').

Yes, after hitting a record high in 2016, at 17.5 million, sales of cars and light trucks appear to be slowing. However, the growth of the driving-age population and scrappage rates suggest underlying demand of about 15.5 million units per year. So, if anything, auto sales were probably artificially strong in 2014-16 as consumers made up for lost time back in 2010-12 when the age of cars on the road had risen after the Panic of 2008. Now, the industry is just gradually returning to normal. In other words, it's not a sign that consumers can't spend.

Nor are we concerned about problems with retail spending. Consumer habits are changing and shifting toward the internet, where sales are booming. When you can shop on-line with your phone or tablet and have products delivered to your doorstep, the economy doesn't need billions more square-feet of retail space. So brick and mortar retailing will continue to grow at a slower pace than GDP, while warehouses will expand.

Source: Pacific Global Investment Management Company

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

 

Last Week's Headlines

  • Consumer prices increased 0.2% in April following a 0.3% decrease in March, according to the Bureau of Labor Statistics. For the 12 months ended in April, the Consumer Price Index rose 2.2%. The energy index rose 1.1% for the month, while prices increased in shelter, energy, tobacco, and food. However, prices fell in medical care, communications, and apparel. The index less food and energy rose a scant 0.1% in April after declining in March. While better than March, April's price gains are marginal at best and not in line with the Fed's expectations for steady price growth.
  • Retail and food services sales in April increased 0.4% from the previous month, and 4.5% above April 2016. Gasoline stations sales were up 12.3% from April 2016, while nonstore retailers were up 11.9% (internet sales) from last year. Excluding automobile and gas, sales are up 0.3% in April over March.
  • Wholesale prices climbed in April, as the Producer Price Index advanced 0.5% after edging down 0.1% in March, according to the U.S. Bureau of Labor Statistics. The PPI rose 2.5% for the 12 months ended April 2017 — the largest increase since moving up 2.8% for the 12 months ended February 2012. Almost two-thirds of the April advance in the index is attributable to prices for services, which moved up 0.4%. Prices for goods climbed 0.5%. Prices less foods, energy, and trade services increased 0.7% for the month and are up 2.1% for the 12 months ended in April.
  • Not unexpectedly, the number of job openings was little changed at 5.743 million on the last day of March, according to the Job Openings and Labor Turnover (JOLTS) report. The number of openings exceeded the number of hires (5.260 million) by about 483,000. Over the month, hires and separations were also little changed at 5.3 million and 5.1 million, respectively. The job openings rate remained at 3.8% for the month. There were 5.1 million total separations in March, little changed from February. Over the 12 months ended in March, hires totaled 62.9 million and separations totaled 60.5 million, yielding a net employment gain of 2.3 million.
  • The price index for U.S. imports advanced 0.5% in April after ticking up 0.1% the previous month, the Bureau of Labor Statistics reported. Export prices rose 0.2% in April following a 0.1% advance in March. Export prices have not recorded a monthly decline since the index fell 0.8% in August 2016. Prices for exports rose 3.0% over the past 12 months. The increase in export prices was driven by both agricultural and nonagricultural (e.g., automobiles, foods, feeds, and beverages) price increases. Import prices rose 0.5% in April and have not recorded a monthly decline since the index edged down 0.1% in November. Prices for imports rose 4.1% for the 12 months ended in April. Import prices were boosted by a 1.6% increase in fuel prices in April.
  • According to the Treasury Department, the federal government realized a surplus of $182 billion in April — $76 billion more than the surplus in April 2016. Receipts in April were $455 billion, while total spending was $273 billion — $59 billion less than spending in April 2016. The budget deficit in March was $176 billion. For fiscal 2017, which began in October 2016, the federal budget deficit was $344 billion — $8 billion less than the shortfall recorded during the same span last year, largely due to the timing of certain payments. If not for those shifts in payments, the deficit for the first seven months of fiscal 2017 would be $77 billion larger than the one recorded for the same period last year.
  • In the week ended May 6, the advance figure for seasonally adjusted initial claims was 236,000, a decrease of 3,000 from the previous week's unrevised level of 238,000. The advance seasonally adjusted insured unemployment rate remained at 1.4% for the fourth consecutive week. The advance number for seasonally adjusted insured unemployment during the week ended April 29 was 1,918,000, a decrease of 61,000 from the previous week's level, which was revised up 15,000. This is the lowest level for insured unemployment since November 5, 1988, when it was 1,898,000.

 

Eye on the Week Ahead

This week is a slow one for important economic reports. Investors will be watching for more corporate earnings information, while also tracking the EU following France's presidential election and Puerto Rico's continuing debt crisis.

 


Fortem Financial 2016. All rights reserved. Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Carefully consider investment objectives, risk factors and charges and expenses before investing.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

French elections and new tax policy…..Just what the market ordered

Stocks continued to rally last week following the first round of France’s presidential elections.  Centrist candidate Emmanuel Macron emerged as the favorite to win the May 7th run off vote against far-right candidate Marine Le Pen; the latest polls show Mr. Macron, a political neophyte, leading with 60% of the vote.  The two offer starkly contrasting visions for France and, by extension, the future of Europe.  Mr. Macron’s candidacy has been cast, especially in light of ongoing Brexit negotiations, as a re-commitment to the EU project which began in 1950.  In contrast, Ms. Le Pen represents a turn towards nationalism which many analysts believe may further splinter the EU.  Meanwhile, President Trump revealed his initial proposal for comprehensive tax reform; the package includes lowering the corporate tax rate, a one-time tax to repatriate cash held by foreign subsidiaries, simplifying individual tax brackets, doubling the standard deduction, and eliminating certain exemptions (while maintaining the current treatment of mortgage interest expense and charitable contributions).  Notably absent were measures to offset the expected reduction in tax revenues resulting from the various proposals.  Not surprisingly, the one-page announcement was seen as a preliminary bid in what will likely be an extended negotiation process.

The preliminary 0.7% estimate of first quarter GDP came in below the 1.00% forecast.  The slowdown in consumer spending, car sales and inventory growth weighed on the economy’s performance during the period.  Still, the report included several encouraging details: residential investment increased by 13.7% while non-residential investment grew 9.4%; and, final sales of domestic goods and services, which contributed 1.1% in the fourth quarter, improved to 1.6%.  The weak GDP report contrasts with better-than-expected corporate earnings reports.  So far, more than half of the companies in the S&P 500® Index have reported first quarter results; the 12.5% blended earnings growth rate is well above the 9.0% estimate at the beginning of the reporting season.  The forecast calls for a 7.5% increase in sales, the third consecutive quarterly gain, led by a 32.7% increase in the Energy sector.  The conflicting data may raise questions about the true state of the economy.  A closer look at other measurements, including robust business and consumer confidence readings, low unemployment and rising wages, suggest that economic conditions are better than the GDP report indicates.  For example, the forecasts for increased corporate sales and earnings (approximately +5% and +10%, respectively) through the remainder of 2017 support the expectation for accelerating GDP growth as the year progresses.

Many corporate executives are commenting on positive trends; the growth opportunities they anticipated following last year’s third quarter results are now more evident.  Comments from Energy executives, though, remain mixed as the sector’s recovery is still in its early stage.  Some reported improved earnings results, and more companies are discussing tangible growth opportunities.  The recovery in the Energy sector will generate additional growth in many parts of the domestic and global economies.  For these reasons, and absent any major geopolitical events, the equity bull markets should be sustainable.

Source: Pacific Global Investment Management Company

market close

Chart reflects price changes, not total return. Because it does not include dividends or splits, it should not be used to benchmark performance of specific investments.

 

Last Week's Headlines

  • The initial estimate for the first-quarter gross domestic product showed economic growth slowed compared to the fourth quarter. The GDP increased at an annual rate of 0.7% in the first quarter. In the fourth quarter of 2016, the GDP increased at an annual rate of 2.1%. While the first estimate is based on source data that is incomplete or subject to further revision, this quarter's growth rate is the slowest in three years. Weakened consumer spending cut into economic growth in the first quarter. Consumer spending increased a mere 0.3%, which is the worst showing since the end of 2009. Consumers spent less on high-cost items such as cars, and home heating during a mild winter. Conversely, residential investment grew at a 13.7% pace and nonresidential (business) investment, which has been sluggish, climbed 9.4%. Rising inflation may be cutting into consumers' paychecks, prompting them to hold off on buying nonessential big-ticket items.
     
  • New home sales continued to surge in March, according to the latest figures from the Census Bureau. Sales of new single-family homes in March were 5.8% higher than the revised February sales figures. The sales rate is 15.6% above the March 2016 estimate. The median sales price of new houses sold in March 2017 was $315,100. The average sales price was $388,200. The seasonally-adjusted estimate of new houses for sale at the end of March was 268,000. This represents a supply of 5.2 months at the current sales rate.
     
  • New orders for manufactured durable goods in March increased $1.6 billion, or 0.7%, to $238.7 billion, according to the Census Bureau. This increase, up three consecutive months, followed a 2.3% February increase. Excluding transportation, new orders decreased 0.2% — the first decline in six months. Excluding defense, new orders increased 0.1%. Transportation equipment, also up three consecutive months, drove the increase, climbing $2.0 billion, or 2.4%, to $83.3 billion. On the other hand, orders for automobiles and machinery slowed. Shipments of manufactured durable goods in March, up four of the last five months, increased $0.6 billion, or 0.2%, to $239.8 billion. Unfilled orders for manufactured durable goods in March, up two consecutive months, increased $2.5 billion, or 0.2%, to $1,119.0 billion. Inventories of manufactured durable goods in March, up four of the last five months, increased $0.5 billion, or 0.1%, to $385.7 billion.
     
  • The international trade deficit was $64.8 billion, an increase of $0.9 billion in March from the prior month. Exports of goods were $125.5 billion, $2.2 billion less than February exports. Imports were $190.3 billion, $1.4 billion less than the previous month.
     
  • Consumer confidence in the economy took a step back in April following an increase in March. The Conference Board Consumer Confidence Index® registered 120.3 in April, down from 124.9 in March. The Present Situation Index decreased from 143.9 to 140.6 and the Expectations Index declined from 112.3 last month to 106.7. The Index of Consumer Sentiment from the University of Michigan inched up in April to 98.0 from 96.9 in March. Consumers were bullish about current economic conditions and expectations for further economic growth.
     
  • In the week ended April 22, the advance figure for seasonally adjusted initial claims was 257,000, an increase of 14,000 from the previous week's revised level of 243,000. The advance seasonally adjusted insured unemployment rate remained at 1.4% for the second consecutive week. The advance number for seasonally adjusted insured unemployment during the week ended April 15 was 1,988,000, an increase of 10,000 from the prior week's revised level of 1,978,000.

 

Eye on the Week Ahead

The all-important employment figures for April are out at the end of the week. March saw new hires for the month drop to under 100,000 for the first time in a long time. However, the unemployment rate fell to 4.5% while average hourly earnings continue to rise — all of which points to an expanding economy.

 


Fortem Financial 2016. All rights reserved. Data Sources: News items are based on reports from multiple commonly available international news sources (i.e. wire services) and are independently verified when necessary with secondary sources such as government agencies, corporate press releases, or trade organizations. Market Data: Based on reported data in WSJ Market Data Center (indexes); U.S. Treasury (Treasury Yields); U.S. Energy Information Administration/Bloomberg.com Market Data (oil spot price, WTI Cushing, OK); www.goldprice.org (spot gold/silver); Oanda/FX Street (currency exchange rates). All information is based on sources deemed reliable, but no warranty or guarantee is made as to its accuracy or completeness. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities, and should not be relied on as financial advice. The opinions expressed are solely those of the author, and do not represent those of Fortem Financial, LLC or any of its affiliates. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Carefully consider investment objectives, risk factors and charges and expenses before investing.

The Dow Jones Industrial Average (DJIA) is a price-weighted index composed of 30 widely traded blue-chip U.S. common stocks. The S&P 500 is a market-cap weighted index composed of the common stocks of 500 leading companies in leading industries of the U.S. economy. The NASDAQ Composite Index is a market-value weighted index of all common stocks listed on the NASDAQ stock exchange. The Russell 2000 is a market-cap weighed index composed of 2,000 U.S. small-cap common stocks. The Global Dow is an equally weighted index of 150 widely traded blue-chip common stocks worldwide. Market indices listed are unmanaged and are not available for direct investment.

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IMPORTANT CONSUMER DISCLOSURE

Fortem Financial Group, LLC ("Fortem Financial" or the "Firm") is a federally registered investment adviser with offices in California. Fortem Financial and its representatives are in compliance with the current registration and notice filing requirements imposed upon federally registered investment advisers by those states in which Fortem Financial maintains clients. Fortem Financial may only transact business in those states in which it is notice filed, or qualifies for an exemption or exclusion from notice filing requirements.

This website is limited to the dissemination of general information regarding the Firm's investment advisory services offered to U.S. residents residing in states where providing such information is not prohibited by applicable law. Accordingly, the publication of Fortem Financial' website on the Internet should not be construed by any consumer and/or prospective client as a solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment, tax or legal advice. Furthermore, the information resulting from the use of any tools or other information on this website should not be construed, in any manner whatsoever, as the receipt of, or a substitute for, personalized individual advice from Fortem Financial. Any subsequent direct communication from Fortem Financial with a prospective client will be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides. Fortem Financial does not make any representations as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to this website or incorporated herein, and takes no responsibility therefore. All such information is provided for convenience purposes only and all users thereof should be guided accordingly.

All statements and opinions included on this website are subject to change as economic and market conditions dictate, and do not necessarily represent the views of Fortem Financial or any of their respective affiliates. Past performance may not be indicative of future results and there can be no assurance that any views, outlooks, projections or forward-looking statements will come to pass. Investing involves risk, including the potential loss of principal, and the profitability of any particular investment strategy or product cannot be guaranteed.

Any rating referenced herein may not be representative of any one client's experience. Further, the Firm's receipt of any rating is not indicative of the Firm's future performance. The Charles E. Merrill Circle of Excellence award is granted by Merrill Lynch for outstanding client service and satisfaction. The award is granted based on annual criteria established by Merrill Lynch for its top decile advisors. The Barron's Top 1,200 Financial Advisors rating of the top financial advisors in the United States is based on data provided by participating firms. The following factors are included in the rankings: assets under management, revenue produced for the firm, regulatory record, quality of practice and philanthropic work. Investment performance is not an explicit component. The Five Star Professional award is granted by Five Star Professional and recognizes service professionals who provide quality services to their clients based on data provided by participating firms. The award is granted based on the following ten objective eligibility and evaluation criteria: credentialed as an investment advisory representative (IAR) or a registered investment advisor; actively employed as a credentialed professional in the financial services industry for a minimum of five years; favorable regulatory and complaint history review; fulfilled their firm review based on internal firm standards; accepting new clients; one-year client retention rate; five-year client retention rate; non-institutionalized discretionary and/or non-discretionary client assets administered; number of client households served; and educational and professional designations. Feedback from consumer surveys will augment a regulatory history review. Firms have the option to provide input on award candidates from their firm, regardless of the nomination source. The Palm Springs Life's "40 Under 40" Rising Young Professionals to Watch in the Coachella Valley is based upon nominations from the local business community and selected by the staff of Palm Springs Life.

For information pertaining to the registration status of Fortem Financial, please refer to the Investment Adviser Public Disclosure website, operated by the U.S. Securities and Exchange Commission, at www.adviserinfo.sec.gov., which contains the most recent versions of the Firm's Form ADV disclosure documents.

ACCESS TO THIS WEBSITE IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND WITHOUT ANY WARRANTIES, EXPRESSED OR IMPLIED, REGARDING THE ACCURACY, COMPLETENESS, TIMELINESS, OR RESULTS OBTAINED FROM ANY INFORMATION POSTED ON THIS WEBSITE OR ANY THIRD PARTY WEBSITE REFERENCED HEREIN.