News for the Week of July 31 - August 4, 2017

News for the Week of July 31 – August 4, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

General Markets / Economic

                                                                                                           

1.     In July, the US posted a record 82nd straight month of job creation and an unemployment rate at a 16 year low, despite slow growth in output

2.     G-20 inflation fell in June to its lowest level in almost eight years.

·       This is NOT a good thing. If inflation falls, it makes it more difficult for Central Banks (the Fed, ECB, Bank of Japan, Bank of England, etc.) to raise rates without reducing the amount of discretionary spending its citizens can afford!

3.     Auto sales fell sharply in July, with the Detroit car makers feeling the brunt of the decline.

·       I’ve said it many times before…Focus on quality parts and products and safety! Parts that can last a long time are not “quality”, and safety cannot be measured immediately (JD Power Initial Safety rating – what on Earth is that!?).

 

 

Company News

 

1.     Google is developing technology to let publishers create visual oriented media content along the lines of Snapchat’s news product

2.     Toyota’s move to build a factory in the US is part of a larger plan to boost output in Mexico and Canada

 

 

 

Interesting News

 

1.     In an effort to woo more families, pubs in Britain are threatening to eject profane patrons

2.     Discovery Communications is acquiring Scripps Networks Interactive for $14.6 billion in a deal that is expected to boost the combined company's negotiating leverage with pay TV operators at a time when more people watch video online, the companies said.

3.     Facebook abandoned an experiment after two artificially intelligent programs appeared to be chatting to each other in a strange language only they understood.

4.     Writers for the Boston Globe and NJ.com are arguing about where Trump spends his vacations – namely why always in NJ and not in New England

 

 

 

 

 

Commentary for the Week of July 31 – August 4, 2017

 

by David Abuaf, CFA

Investment Manager, RJFS

 

 

 Let’s take a look at what happened this week – the Dow Jones Industrial Average rose to above 22,000. In this piece and many others that we at Forman Investment Services write about the markets, we almost never mention the Dow. We don’t look at the Dow as a reflection of the US stock market and here’s why.

 

The Dow is a concentrated portfolio of stocks weighed in a wacky way – by price. That means one stock, especially a high-priced stock, can have an outsized impact on the benchmark level. For a more accurate reading on the market, we look to the S&P 500. Due to its size and market capitalization weighting, no single stock can make it move on its own.

 

 

 

 

 

 

 

All opinions presented are those of David Abuaf, and not of Raymond James or Forman Investment Services

 

This information is not a complete description of the securities, markets, or developments discussed and 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.  This information is not intended as a solicitation or an offer to buy or sell any security referred to herein.

 

The Dow Jones Industrial Average (DJIA), commonly known as “The Dow” is an index representing 30 stock of companies maintained and reviewed by the editors of the Wall Street Journal. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.  Keep in mind that individuals cannot invest directly in any index. Individual investor's results will vary. Past performance does not guarantee future results. Investing involves risk and you may incur a profit or loss regardless of strategy selected.

 

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