Vorisek Financial Weekly Market Update for July 18, 2018

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Good morning!

Strong economies need crude oil to feed their growth.  But disruptions in Africa (Libya) and North America (Canada) are raising concerns about the world supply of oil: will the top producers of crude (Saudi Arabia, Russia, and the United States) be able to increase their output to make up the difference?  The fear is that a reduced supply of oil could lead to higher prices which can reduce global consumption.  The 3 largest oil consumers worldwide are the USA, China and India (source: International Energy Agency).     

US tariffs that have been in place for 6 weeks have not dented investor enthusiasm for domestic stocks at this time.  The S&P 500 finished last week at 2801, its highest close since 2/01/18, and the tech-dominated NASDAQ Composite closed at 7826, its highest closing value ever.  Stock buyers may believe a self-inflicted trade war is a battle that the United States can win, tilting the corporate playing field in favor of American exporters.  The reality is that our nearly 9 ½ year old bull market will change direction at some point, but it didn’t happen last week (source: BTN Research).                

Anthony Kennedy, the longest serving current Supreme Court justice, is retiring at the end of this month.  Kennedy’s 30 ½ years on the nation’s top judicial court ranks him as the 14th longest serving justice in history.  4 of the 9 current justices have served at least 23 years.  Supreme Court justices have “life tenure” (source: Supreme Court).      

Notable Numbers for the Week:

  1. DOLLARS IN, DOLLARS OUT - After 9 months of fiscal year 2018 (i.e., the 9 months ending 6/30/18), the USA has collected $1 of tax receipts for every $1.24 of outlays, creating a deficit to date of $607 billion (source: Treasury Department).

  2. CAPITALIST WITH A CONSCIENCE - 6 out of 7 Millennials (86%) would “consider” taking a cut in pay in order to work for a company that follows “a mission and values” that aligned with their own.  Millennials were born between 1981-97 and are age 21-37 in 2018 (source: LinkedIn Workplace Culture Trends).

  3. REPETITIVE PROCESS - 40% of the robots used in the United States today are in the auto industry (source: Department of Transportation).  

  4. HEAD SOUTH FOR WORK - The government divides the USA into 4 geographical areas: Northeast, South, Midwest and West.  As of May 2018, the Northeast states had 1.075 million job openings while the states in the South had 2.432 million job openings.  The total number of job openings nationwide: 6.638 million (source: Department of Labor).        

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