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    Markets "In a Nutshell" for June 27, 2018

    Jun 27, 2018

    Investment Week at a Glance

    Stocks finished lower for the week. The Dow Jones Industrial Average was down 2.03%, the S&P 500 fell 0.89%, the New York Stock Exchange Composite (2,000 stocks) was down 0.75% and the average investors index (Value Line Index) was down 0.16%. Foreign stocks (DJ Global ex U.S.) were down 1.25%. Bond prices were higher for the week, pushing the yield on the 10-year U.S. Treasury down 3 basis point to finish the week at 2.89%. (Data sources: Barron’s Financial, Wall Street Journal)

     

    Stocks Fall on Trade Fears

    Most major domestic benchmarks traded lower for the week. The Dow Jones Industrial Average, down 2.03%, took the biggest hit with its narrow focus on industrial firms and exporters. The technology heavy Nasdaq Composite fared much better, reaching a new record high during the week before finishing down 0.69%. The real estate and utilities sectors outperformed with aid from the decline in longer term fixed income yields.

     

    Tariffs

    Tensions are continuing to brew between the United States and its foreign trading partners.  Stocks open sharply lower on Tuesday after the Trump Administration drew up a new list of tariffs on an additional $200 billion worth of Chinese goods. On Tuesday, German automaker Daimler lowered its outlook by citing the possibility of reduced demand for its SUV’s that are made in the US and exports to China, causing stocks to slump. President Trump, again on Friday, fanned the flames by warning that the United States would place a 20% tariff on all automobile imports from Europe if they don’t reduce their own barriers.

     

    Volatile Week in Europe

    Most major European indices fell lower in a volatile week for equities. The STOXX 600 Index was down nearly 2% with the majority of its loses occurring midweek. The strongest market driving event was the escalation of trade tensions between the United States and the European Union.  A variety of U.S. goods, such as Harley-Davidson motorcycles, cranberries, and bourbon, are among the $3.2 billion worth of good that will not carry tariffs. These tariffs came in response to new tariffs imposed on European steel and aluminum.

     

    Quiz:

    Which statements about a Roth 401(k) are INCORRECT?

    a)      Contributions are made with after-tax dollars

    b)      They are subject to income limits

    c)       The maximum contribution is $18,500 for those under age 50

    d)      The maximum contribution is $24,500 for those age 50 or over

     

    Have a good week!

     

     

     

     

     

    Answer to quiz:

    b)      Roth 401(k)’s aren’t subject to income limits, whereas Roth IRAs are.