Vorisek Financial Weekly Market Update for October 11, 2017

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Good morning!

It was 10 years ago today (Tuesday 10/09/07) that the S&P 500 peaked at a then all-time record closing high of 1565.  The very next day, the index began a painful 17 month tumble that resulted in a 57% drop of the raw index, its worst bear market loss in the last 80 years, i.e., dating back to 1937.  Over those 8 decades, the S&P 500 index has suffered through 4 extreme bears, each with losses of at least 40%.  But it has been a bull and not a bear that has ruled the market for 8 ½ years, driven by strong business fundamentals, encouraging economic data and the hope that tax reform may benefit US corporations.  As of the close of trading tonight (10/09/17), this bull will reach 103 months in length, the 2nd longest continuous advance for the index since 1950 (source: BTN Research).  

In late September 2007 (10 years ago), the United States was importing 10.25 million barrels a day of crude oil.  In late September 2017 (last month), the United States was importing just 7.21 million barrels a day of crude oil, a drop of 30% over the last decade.  Even more remarkably, American exporting of crude oil over the same time period has climbed from near zero (actually 25,000 barrels a day) in late September 2007 to a record 1.98 million barrels a day late last month.  The latter number broke the old export record, which had been set just a week earlier, by +33% (source: Energy Department).        

The last time that US employers reported a net loss for jobs in a single month was in September 2010.  Since then, employers have hired a net 16.32 million workers, an average monthly gain of +196,600 employees.  But the double hurricanes of Harvey and Irma were too much for the US jobs picture, resulting in a net loss of 33,000 jobs in September 2017, ending the jobs streak at 83 months (source: Labor Department).        

Notable Numbers for the Week:

1.     THE WORLD’S BIGGEST - The US economy is $19.25 trillion in size as of 6/30/17.  30 years ago (1987), the US economy was worth $4.87 trillion (source: Commerce Department).  

2.     ALL IN THE FAMILY – A single political party has controlled the White House, the Senate and the House of Representatives in 21 of the last 60 years, i.e., 1958-2017.  Republicans control all 3 this year (2017).  Democrats last controlled all 3 in 2010 (source: BTN Research).   

3.     BANKING BUSINESS - The last bank to fail in the United States and require a financial bailout occurred on 5/26/17 or 136 days ago.  That’s the 2nd longest stretch between American bank failures in the last 10 years, a decade that has seen 526 bank failures or 1 failure per week (source: FDIC). 

4.     RUNNING A LITTLE SHORT - 43% of 6,389 Americans surveyed admit that they “have difficulty making ends meet” (source: National Financial Well-Being Survey, Consumer Financial Protection Bureau). 

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