Strong economies need crude oil to feed their growth. But disruptions in Africa (Libya) and North America (Canada) are raising concerns about the world supply of oil: will the top producers of crude (Saudi Arabia, Russia, and the United States) be able to increase their output to make up the difference? The fear is that a reduced supply of oil could lead to higher prices which can reduce global consumption. The 3 largest oil consumers worldwide are the USA, China and India (source: International Energy Agency).
US tariffs that have been in place for 6 weeks have not dented investor enthusiasm for domestic stocks at this time. The S&P 500 finished last week at 2801, its highest close since 2/01/18, and the tech-dominated NASDAQ Composite closed at 7826, its highest closing value ever. Stock buyers may believe a self-inflicted trade war is a battle that the United States can win, tilting the corporate playing field in favor of American exporters. The reality is that our nearly 9 ½ year old bull market will change direction at some point, but it didn’t happen last week (source: BTN Research).
Anthony Kennedy, the longest serving current Supreme Court justice, is retiring at the end of this month. Kennedy’s 30 ½ years on the nation’s top judicial court ranks him as the 14th longest serving justice in history. 4 of the 9 current justices have served at least 23 years. Supreme Court justices have “life tenure” (source: Supreme Court).
Notable Numbers for the Week:
1. DOLLARS IN, DOLLARS OUT – After 9 months of fiscal year 2018 (i.e., the 9 months ending 6/30/18), the USA has collected $1 of tax receipts for every $1.24 of outlays, creating a deficit to date of $607 billion (source: Treasury Department).
2. CAPITALIST WITH A CONSCIENCE – 6 out of 7 Millennials (86%) would “consider” taking a cut in pay in order to work for a company that follows “a mission and values” that aligned with their own. Millennials were born between 1981-97 and are age 21-37 in 2018 (source: LinkedIn Workplace Culture Trends).
3. REPETITIVE PROCESS – 40% of the robots used in the United States today are in the auto industry (source: Department of Transportation).
4. HEAD SOUTH FOR WORK – The government divides the USA into 4 geographical areas: Northeast, South, Midwest and West. As of May 2018, the Northeast states had 1.075 million job openings while the states in the South had 2.432 million job openings. The total number of job openings nationwide: 6.638 million (source: Department of Labor).
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through GFS Wealth Management Advisors, Inc. (GFS). Kestra IS is not affiliated with GFS or Ganim Financial. Ganim Financial, GFS, and Kestra IS do not offer tax or legal advice. Any decisions whether to implement these ideas should be made by the client in consultation with professional financial, tax and legal counsel.
This material represents an assessment of the market and economic environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. Forward-looking statements are subject to certain risks and uncertainties. Actual results, performance, or achievements may differ materially from those expressed or implied. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed by Kestra IS or Kestra AS, as to accuracy does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. The indices mentioned are unmanaged and cannot be directly invested into. Past performance does not guarantee future results. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market. Copyright © 2016 Michael A. Higley. All rights reserved.