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Weekly Economic Update
February 20, 2018
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The Markets (as of market close February 16, 2018)
Stocks rebounded last week following a tumultuous few weeks of significant losses. Led by the Nasdaq, each of the benchmark indexes listed here posted solid gains. Both the large caps of the Dow and S&P 500 put up impressive gains following several weeks of negative results. All told, last week was the best for stocks since early 2013. And, these gains occurred despite signals that inflation is beginning to pick up steam.
Last Week’s Economic Headlines
- Consumer prices for goods and services rose 0.5% in January, according to the Bureau of Labor Statistics. Over the last 12 months, the Consumer Price Index has risen 2.1%. Contributing to the price growth were increases in prices for gasoline, shelter, apparel, medical care, and food. The index less food and energy increased 0.3% in January and 1.8% over the past year. The energy index increased 5.5% and the food index advanced 1.7%. Rising consumer prices could spark fear of rising inflation (and interest rates) among investors, who may react by selling equity holdings, which, in turn, could drive down stock market values.
- In yet another sign of potentially escalating inflation, the Producer Price Index increased 0.4% in January. Over the 12 months ended in January, producer prices are up 2.7%. The PPI less foods, energy, and trade services rose 0.4% in January, the largest advance since increasing 0.5% in April 2017.
- New residential construction, which finished 2017 in fine fashion, continued to surge in January. According to the Census Bureau report, building permits increased 7.4% from December and housing starts jumped 9.7%. Housing completions fell 1.9%, but are 7.7% ahead of their January 2017 pace.
- Prices are rising in trade, both foreign and domestic. January saw prices for U.S. exports rise 0.8%, while import prices climbed 1.0%. The 1.0% advance (which also occurred last November) marked the largest one-month rise since the index increased 1.2% in May 2016. Import prices advanced 3.6% between January 2017 and January 2018. Exports have not risen by more than 0.8% since advancing 1.1% in May 2016.
- In the week ended February 10, there were 230,000 initial claims for unemployment insurance, an increase of 7,000 from the previous week’s level, which was revised up by 2,000. The advance insured unemployment rate remained 1.4% for the week ended February 3. The advance number of those receiving unemployment insurance benefits during the week ended February 3 was 1,942,000, an increase of 15,000 from the prior week’s level, which was revised up by 4,000.
Eye on the Week Ahead
The Presidents’ Day week is a slow one for economic reports. However, the minutes from the last Federal Open Market Committee meeting held in January are available and may shed some light on the Committee’s take on inflationary trends and the prospects of increasing the federal funds target rate. We at BWFA continue to monitor interest rates and believe that rates will rise 3 to 4 times this year putting some pressure on stocks but more pressure on bonds. As a firm we continue to overweight International, Technology, Healthcare and Financials and now are starting to put more emphasis on companies that will benefit from a healthy economic growth rate worldwide. In addition volatility has increased and we are always looking to take advantage of this for our clients.
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What’s Your Retirement Number?
Thursday, March 1, 2018
11:45 AM – 1:00 PM
Lunch to be provided
What do you need for the rest of your life, and what will is cost?
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Managing Director,
Wealth Management
SOLD OUT!!!
To be placed on our wait list, please email
Eve Kennedy @
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Baltimore-Washington Financial Advisors invite you to a discussion on:
- Have you saved enough for retirement?
- Can you retire?
- How much income do you need in retirement?
- How much income can you expect to generate in your retirement from your investments?
- How can you reduce the risk of outliving your assets?
- How do you manage your investment return in retirement?
- How do you switch from accumulation to generating an income stream?
Please join us as we discuss these topics and more.
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New Tax Law
Strategies
Do you have questions regarding the new tax laws?
Tuesday, March 6, 2018
11:45 AM – 1:00 PM
Lunch to be provided
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Presented by:
Lex Ruygrok, CPA
Tax Consultant
Managing Director,
Wealth Management
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Baltimore-Washington Financial Advisors invites you to a discussion on how the new tax law will impact your investments and estate plan.
The complexity of the new tax law affects wealth planning, home ownership and investment portfolios in ways that are different for everyone.
Learn how these changes will affect you and your investments and how BWFA is able to assist you along the way.
Topics to include:
- Three tax strategies that will save you money
- Specific tax code provisions that you need to know
- How to lower your tax bill
- How to avoid costly penalties
Please join us as we discuss these topics and more.
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Estate Planning:
How to Avoid Probate Court
Guest Speaker:
Gary Greenwald Esq.
Tuesday, March 6, 2018
6:00 PM – 7:30 PM
Dinner to be provided
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Managing Director,
Wealth Management
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Baltimore-Washington Financial Advisors and Gary Greenwald, Esq. invite you to this interactive workshop on, how to avoid probate court.
At this workshop, you will learn to:
- Reduce the cost of settling your affairs upon your death by 60-70%
- Keep all of your personal affairs private if you become disabled and when you pass
- Avoid the time and expense of probate upon your death
- Be confident that you, and not some court, will be in charge of your assets upon disability or death
Please join us as we discuss these topics and more.
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Assisted Living
Guest Speaker: Steve Elville
Tuesday, March 13, 2018
11:45 AM – 1:00 PM
Lunch to be provided
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Presented by:
Steve Elville, Esq.
Principal
Elville and Associates
Managing Director,
Wealth Management
Reserve your spot!
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Baltimore-Washington Financial Advisors invites you to an interactive workshop on “Selecting an Assisted Living Facility/Community.”
Topics to include:
- Broad overview of assisted living options
- Challenges associated with downsizing
- Cost, amenities, financial stability and quality of care
- Reputation, resident’s rights, estate planning considerations
- Long-term care skilled nursing concerns
- Estate planning considerations
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Roth vs. Traditional IRA
Tuesday, March 20, 2018
11:45 AM – 1:00 PM
Lunch to be provide
Roth IRAs and 401(k)s can be extremely beneficial for retirement investors. This BWFA workshop will show you how to take advantage of both of them.
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Managing Director,
Wealth Management
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Baltimore-Washington Financial Advisors invite you to a discussion on:
- Positioning your assets before you retire
- Reducing your taxes during retirement
- Extending the life of your financial assets
- Creating tax planning flexibility during retirement
Please join us as we discuss these topics and more.
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When a Loved One Passes
Guest Speaker:
Gary Greenwald Esq.
Tuesday, March, 27 2018
11:45 AM – 1:00 PM
Lunch to be provided
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Managing Director,
Wealth Management
Register today!!!
Limited Seating Available!
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Baltimore-Washington Financial Advisors and Gary Greenwald, Esq. invite you to this interactive workshop on, “What to do when a loved one passes away.”
At this workshop, you will learn to:
- What are the first things we should do?
- What happens if he/she has done no estate planning?
- What do you do with his/her trust or will?
- Whould I continue to pay his/her bills?
- What should you do with his/her home?
- What is involved in settling a will or trust?
- Can a will or trust be contested?
Please join us as we discuss these topics and more.
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