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Weekly Economic Update
March 26, 2018
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The Markets (as of market close March 23, 2018)
Volatility is the catchword when describing the market lately. According to forward looking reports, we can expect continued price fluctuation in the S&P 500 based on stock option trading among other indicators. The Cboe Volatility Index® soared from 15.80 on March 16 to 24.87 last Friday. Last week’s market performance was one of the worst in years, with the S&P 500 suffering its biggest drop since the beginning of 2016. The tech-heavy Nasdaq exceeded the losses suffered by the large-cap index, falling over 6.50%. The prospect of escalating trade tensions is also weighing on investors in the short run as indicated by last Thursday’s sell-off following the Trump administration’s call for tariffs on Chinese imports.
Last Week’s Economic Headlines
- Citing continued strengthening of the labor market and moderate rising of economic activity, the Federal Open Market Committee decided to increase the target range for the federal funds rate 25 basis points to 1.50% to 1.75%. The Committee raised the target range despite inflation that continues to run below the Fed’s target rate of 2.0%. Two more rate hikes remain likely during the remainder of 2018.
- Sales of existing homes picked up the pace in February following two consecutive monthly declines. Existing home sales grew 3.0% for the month, and are now 1.1% above a year ago. The median existing home price expanded for the 72nd straight month in February, increasing to $241,700, which is up 5.9% from February 2017 ($228,200). Helping drive sales was an increase in existing home inventory, which rose 4.6% (still 8.1% lower than a year ago). There is a 3.4-month supply of unsold inventory at the current sales pace, compared to a 3.8-month supply in January. Despite surging prices and low inventories, the uptick in sales of existing homes is likely attributable to a healthy economy.
- New home sales slipped in February, down 0.6% from their January pace. Nevertheless, sales are still 0.5% ahead of their February 2017 estimate. The median sales price of new houses sold in February 2018 was $326,800. The average sales price was $376,700. Inventory of new homes for sale represents a supply of about 5.9 months at the current sales rate.
- The manufacturing sector bounced back in February as new orders for durable goods increased by 3.1% for the month, compared to January’s 3.5% drop. Excluding transportation, which led the increase (up 7.1%), new orders increased 1.2%. Shipments, inventories, and unfilled orders also increased in February. New orders are up 8.9% year-over-year, while core capital goods (excluding defense and transportation) are up an impressive 8.0% over last year.
Eye on the Week Ahead
The third and final release for the fourth-quarter gross domestic product is available this week. The annualized rate of growth is expected to remain about 2.5% for the quarter. Also worth noting this week is the international trade in goods report for February. The trade deficit continues to widen, as the cost of imports regularly outpace exports.
Recent changes to U.S. tax policy for 2018, reduction in corporate regulations imposed by the government, and monetary policy are all pluses for growth; government spending and new tariffs are threats. Things aren’t perfect, but, in no way do the fundamentals signal major economic problems ahead. The current volatility in markets is not a warning of really bad things to come, it’s just volatility. The overall economic fundamentals remain sound.
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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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Estate Planning:
Planning for Your Loved One with Special Needs
Guest Speaker: Steve Elville
Tuesday, April 10, 2018
11:30 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
Register today!!!
Don’t miss this informative discussion!!
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Baltimore-Washington Financial Advisors and Elville and Associates invite you to a discussion about planning for your loved one with special needs. Attendees will come to understand what is involved in the planning process for a special needs family and the importance of preserving the loved one’s financial security and quality of life.
Topics to include:
- Understand what is involved in the planning process for a special needs family and the and the importance of preserving the loved one’s financial security and quality of life
- Key issues involved in special needs planning to be discussed – the role of public benefits, the ABLE Act, and using estate planning and trusts to protect assets (along with a discussion about the types of special needs trusts to consider)
- The importance of the “planning team concept” – how your planning team (financial advisor, attorney, CPA) can work together with you to provide your family peace of mind during the planning process
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Estate Planning:
Protecting Your Assets Upon Your Death
Guest Speaker:
Gary Greenwald Esq.
Thursday, April 12, 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, “How to protect your bloodline.”
At this workshop, you will learn to:
- If you die first, how you can make sure that the assets you leave your spouse are beyond the reach of his or her creditors?
- If you die first and your surviving spouse remarries, how can you make sure that the assets you leave your spouse do not end up in the hands of his or her next spouse?
- After you and your spouse die, how can you make sure that your assets do not get distributed to your no good son in law or daughter in law (a crowd favorite)!
- How can you make sure thatthe assets you leave your children are managed in such a away that there is something left for your grandchildren?
Please join us as we discuss these topics and more.
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Investing in Volatile Markets
Thursday, April 19, 2018
11:45 AM – 1:00 PM
Lunch to be provided
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Navigating a volatile stock market can be very difficult and an emotional experience for many. Join us to learn about techniques to deal with the market volatility and have an opportunity to ask questions about what is on your mind.
Presented by:
Managing Director,
Wealth Management
Register today!!!
Limited Seating Available!
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Baltimore-Washington Financial Advisors invite you to an interactive workshop discussing the challenges and opportunities for investors during volatile markets.
At this workshop, you will learn to:
- How to effectivley deal with the stock market’s ups and downs
- What does it mean to “Stay the Course”?
- Is history repeating itself or is it different this time?
- Should I sell some of my stock investments?
- Should I move my money to cash?
- What if I need money when the market is down?
Please join us as we discuss these topics and more.
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Estate Planning:
How to be a Trustee
Guest Speaker:
Gary Greenwald Esq.
Tuesday, April 24, 2018
11:45 AM – 1:00 PM
Lunch 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 be a Trustee.”
Many individuals are named as trustees of trusts established for family members and friends. Service as a trustee can be a thankless and confusing job. This educational seminar is intended to shed some light on what it means to serve as a trustee and to meet the requirements of serving.
- What is a trust?
- A Trustee is a “fiduciary” (what is that?)
- How to manage the finances of a trust
- Determining where and when not to make distributions from a trust
- Obligations of a Trustee under the Maryland Trust Act
- Can a trustee be paid for his/her services?
- Taxes and Tax Returns of a Turst
Please join us as we discuss these topics and more.
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Part 1 of 4-Part Series for Business Owners
Exit Strategy & Succession Planning
Guest Speaker:
Matthew F. Penater, Esq.
Tuesday, May 1, 2018
11:45 AM – 1:00 PM
Lunch to be provided
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Managing Director M&A, BWFA
Principal, Elville and Associates
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Baltimore-Washington Financial Advisors and Elville and Associates invite you to this interactive workshop on “Exiting a Business and Planning for Business Succession.”
If you are like many business owners, your business plan may focus on growth, marketing or product development, or perhaps just day-to-day survival. As a business owner, it is also important to start planning now for the eventual sale of your business.
- Developing your exit strategy team
- How much is your business worth?
- Who will buy your business?
- What will make your business attractive to buyers?
- Tax Strategies
- Legal issues to consider
- Business housekeeping
Please join us as we discuss these topics and more.
STAY TUNED for details on Part 2 of the Business Owner Seminar Series
Part 2:
“Showtime: Selling Your Business”
July 12, 2018
Part 3:
“Wealth Management: Constructing an investment Portfolio”
TBD
Part 4:
“Estate Planning: We Can Help with the Things that Keep You Up at Night”
TBD
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