Vorisek Financial Weekly Market Update for May 9, 2018

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Good morning!

The US trade deficit with China reached a record high of $375.2 billion in 2017, the difference between $130.4 billion of US exports to China and $505.6 billion of US imports from China.  The White House has upped its anti-China trade rhetoric since 3/01/18 when President Trump first announced his plans to impose steel and aluminum tariffs.  The latest salvo from Washington was delivered to Beijing late last week: a demand to reduce the $375 billion trade deficit to just $175 billion by the end of 2020, a call for the Chinese to significantly increase purchases of American exports (source: Commerce Department).        

The 3.9% jobless rate in the United States in April 2018 is the lowest nationwide since December 2000.  In the last 40 years, the unemployment rate has been 3.9% or less in just 5 other months, i.e., 1% of the months over the last 4 decades.  The 6.3 million jobless Americans as of 4/30/18 is down 59% from the dreadful 15.3 million Americans that were lacking employment as of 4/30/10 (source: Labor Department).   

As of 3/31/18, 64% of the 120 million households in the United States are homeowners, a record total of 77 million households.  34% of the 77 million homeowners (26 million households) are mortgage debt-free (source: ATTOM).                       

Notable Numbers for the Week:

  1. FIVE DAYS - The best 5 trading days for the S&P 500 over the last 10 years (2008-2017) gained +50.6% (total return), more than the +50.1% gained by the other 2,513 trading days in the decade (source: BTN Research).   

  2. INCREASING DEMAND - The global consumption of crude oil is projected to exceed 100 million barrels a day in the 3rd quarter 2018, the first time ever in history that consumption has reached that level.  In 2017 the USA consumed 19.9 million barrels a day of crude oil that had been refined into gasoline, diesel fuel, heating oil and jet fuel (source: Energy Information Administration).   

  3. RAPID CITY OR JACKSONVILLE? - The top 3 states for retirement in 2018 are Florida, Colorado and South Dakota.  This subjective evaluation was based upon 41 metrics that assessed affordability, health care, quality of life, crime, weather and the state’s tax environment (source: WalletHub). 

  4. YOU’RE OUT, THEY’RE IN - Mid-term elections occur on 11/06/18 or 6 months from yesterday.  All 435 House seats and 33 Senate seats are up for reelection in November.  In the last 4 mid-term elections (2002, 2006, 2010 and 2014), the balance of power changed in at least 1 of the 2 congressional institutions (source: BTN Research).

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