Weekly Economic Update: September 11, 2017

Retail gas prices surged as Hurricane Harvey forced refineries to shut down, leading to curtailed petroleum shipments. Higher gas prices cut into investors’ pockets, prompting them to move money from stocks to bonds. Each of the indexes listed here lost value last week, with the exception of the Global Dow, which posted a modest gain. Hurricanes Harvey and Irma, plus continued tensions between the United States and North Korea, didn’t help equities. The yield on 10-year Treasuries fell 11 basis points as prices rose.

The price of crude oil (WTI) closed at $47.56 per barrel, up slightly from the prior week’s closing price of $47.35 per barrel. The price of gold (COMEX) reached $1,351.00 by early Friday evening, $21.10 higher than the prior week’s price of $1,329.90. The national average retail regular gasoline price increased to $2.679 per gallon on September 4, 2017, $0.280 higher than the prior week’s price and $0.456 more than a year ago.

Last Week’s Economic Headlines

• The Bureau of Economic Analysis releases a monthly report on the trade deficit for goods, as well as a more comprehensive report on the deficit for both goods and services. For July, the goods and services deficit was $43.7 billion, up $0.1 billion from June. July exports were $194.4 billion, $0.6 billion less than June exports. July imports were $238.1 billion, $0.4 billion less than June imports. Year-to-date, the goods and services deficit increased $27.9 billion, or 9.6%, from the same period in 2016. Examining the trade balance provides an indication of a country’s relative standing in the world economy, and affords a comparison of the prices of domestically produced goods and services to those produced in other countries.

• In the week ended September 2, the advance figure for initial claims for unemployment insurance was 298,000, an increase of 62,000 from the previous week’s revised level. This is the highest level for initial claims since April 18, 2015, when it was also 298,000. The advance insured unemployment rate remained at 1.4%. The advance number of those receiving unemployment insurance during the week ended August 26 was 1,940,000, a decrease of 5,000 from the previous week’s revised level.

Hurricane season is certainly upon us, and the financial effects of both hurricanes Harvey and Irma have been widespread. Inflation has been running cold and is not likely to pick up significantly. The latest inflationary gauges for consumer prices are out next week with reports on the Consumer Price Index, the Producer Price Index, and retail sales for August available. We continue to focus on the sectors we feel will outperform like Technology, Healthcare and Financials. Conversely we are limiting our exposure to Retail, Energy and Auto’s. We continue to monitor the Federal Reserve in relationship to interest rates and Congressional developments surrounding tax reform. We are encouraged by corporate profits and international growth this year. As always we are honored to be assisting you and your family with your finances.