Hello folks, this is Jon Lee from LCM Capital Advisors with an educational economic update for August 2018.
In this month’s video, I’ll discuss some of the major headlines that influenced markets in July. I will also provide insight into what these developments could mean for you as an investor.
Please stay tuned at the end of this video for a required disclosure statement.
Throughout July, the trade war appeared to be heating up and continued to capture investors’ attention. At one point, President Trump threatened to add tariffs to all Chinese imports. Stocks stumbled as the trade tension increased. Then, on July 31, news of potential trade talks between the U.S. and China helped push the S&P 500 and Dow to their best monthly performance since January.
The S&P 500 grew by 3.6%, and the NASDAQ was up more than 2%—as both had their 4th monthly gains in a row. The Dow had the largest monthly increase, adding 4.7% in July.
Strong corporate earnings and solid economic data helped contribute to this positive performance. On July 27,we received the initial reading of 2nd quarter Gross Domestic Product (GDP). The data indicated that the economy grew at a 4.1% annual rate between April and June. This result was significantly higher than the 1st quarter’s growthand was the fastest pace since 2014.
July also marked the beginning of the 2nd quarter corporate earnings season. Results appear to be as strong for corporate growth as for the economy as a whole. As of July 31, almost 2/3 of the S&P 500 companies had released their 2nd quarter earnings data. Of them, 82% beat their earnings projections. Some estimates indicate that this earnings season could be even better than the 1st quarter of 2018.
We also received a strong labor report that supported the idea that our economy is healthy. The latest data showed more job creation than expectedand more people coming off the sidelines to look for work.
Of course, no economy is perfect, and tariffs continue to pose a threat to growth. But, overall, July provided us with good news about corporate earnings and GDP, and ended with a pause in the escalating trade tension. We will continue to analyze what may be ahead and pay particular attention to both trade and earnings in August.
That’s it for this month’s educational economic update.
Once again, this is Jon Lee with LCM Capital Advisors signing off for the month of August 2018.
Please remember that nothing we talk about here is a recommendation. If you would like to discuss your personal financial situation, please give us a call at 9418220401. We’d be happy to talk to you.
Required Disclosure to Be Read After Close
While we believe the information in this report is reliable, we cannot guarantee its accuracy. Opinions expressed are subject to change without notice and are not intended as investment advice or a solicitation for the purchase or sale of any security. Please consult your financial professional before making any investment decision.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining markets. The indices mentioned are unmanaged and cannot be invested into directly. Past performance does not guarantee future results.