Vorisek Financial Weekly Market Update for September 26, 2018

WMR Logo (002).jpg

Good morning!

The USA implemented its 3rd round of tariffs aimed at Chinese imports last week.  The latest target was $200 billion of products shipped to America, on top of the $34 billion of imports earmarked in July and another $16 billion in August.  Together the $250 billion of Chinese imports now subject to tariffs represents half of all Chinese imports coming into the USA.  China has responded with retaliatory tariffs on $110 billion of American exports, payback that represents levies on 85% of the goods American businesses sell to China.  If the tit-for-tat battle continues, China may resort to other strategies, e.g., currency manipulation.  A weaker yuan would make the cost of Chinese imports cheaper to American buyers, offsetting the impact of the new tariffs (source: BTN Research).      

Equity investors have effectively navigated rising interest rates, Washington gridlock and international conflict (North Korea and Syria) in 2018.  The S&P 500 climbed to yet another all-time closing high last week, its 19th record close this year and 207th during its ongoing 9 ½ year bull market run.  The stock index is up +11.1% YTD (total return) with just over 3 months to go in the year (source: BTN Research).    

Hurricane Harvey hit Texas more than a year ago (on 8/25/17) and caused $125 billion in damages (inflation adjusted), the 2nd costliest weather disaster in US history, trailing only Hurricane Katrina (2005).  Hurricane Florence hit North Carolina on 9/14/18, killing 43 people and causing an estimated $38-50 billion in damages (source: National Hurricane Center, Moody’s Analytics).      

Notable Numbers for the Week:

  1. THIS YEAR - Last Wednesday (9/19/18), the national debt reached $21.494 trillion, an increase of $1 trillion from our nation’s outstanding debt of $20.493 trillion as of 12/31/17 (source: Treasury Department). 

  2. WE ARE IMPORTANT TO THEM - 19% of Chinese exports are purchased by American consumers, making the US the # 1 trading partner of China (source: WTEx). 

  3. JUST IN CASE - 27% of 2,000 adults surveyed own group life insurance through a policy made available by their employer but paid for by the employee.  70% of those purchasing the group insurance have death benefits of no more than $100,000 (source: OneAmerica/The Harris Poll).

  4. SOFTENING MARKET - 20% of the single-family homes for sale in San Diego dropped their asking price in June 2018, the highest percentage to do so in any major US city.  14% of single-family homes nationwide lowered their asking price in June 2018 (source: Freddie Mac).

This message and any attachments contain information, which may be confidential and/or privileged, and is intended for use only by the addressee(s) named on this transmission. If you are not the intended recipient, or the employee or agent responsible for delivering the message to the intended recipient, you are notified that any review, copying, distribution or use of this transmission is strictly prohibited. If you have received this transmission in error, please (i) notify the sender immediately by email or by telephone and (ii) destroy all copies of this message. If you do not wish to receive marketing e-mails from this sender, please reply to this email with the word REMOVE in the subject line. By industry regulation, we cannot accept time-sensitive information via e-mail. If you would like to execute a trade or if you have time sensitive information for me, please call my office. We cannot guarantee receipt of, nor the timing of placement, for investment orders received via e-mail.

If you do not want to receive further editions of this weekly newsletter, please contact Jayne Weddington at 614-431-4328 or e-mail us at info@vorfin.com.  You may also write us at 300 W. Wilson Bridge Rd., Suite 320, Worthington, OH 43085. Securities and Investment Advisory Services offered through FSC Securities Corp., a broker/dealer and registered investment advisor. Member FINRA/SIPC. Vorisek Financial Corporation is not affiliated with FSC Securities Corporation or registered as a broker dealer or investment advisor.