Down the Jackson (rabbit) Hole

Stocks retreated after comments from Federal Reserve Chair Janet Yellen and Vice Chairman Stanley Fischer led traders to expect at least one rate hike before year-end.

The Dow lost 53 points, with 21 of its components declining; the S&P 500 Index fell 3; and the Nasdaq climbed 6. Decliners outpaced advancers by three to two on the NYSE and were nearly even on the Nasdaq. Treasury prices weakened. Gold futures gained $1.30 to close at $1,325.90 an ounce. Crude-oil futures added $0.31 to settle at $47.64 a barrel.

For the week, the Dow dropped 0.83%, the S&P 500 Index declined 0.66%, and the Nasdaq was down 0.37%.

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Make rituals work for you

Today’s Daily Advantage comes to us from guest writer Jim Durning.

Major stock indexes in the U.S. declined modestly as investors parsed signals ahead of Federal Reserve Chair Janet Yellen’s comments at the central bank retreat in Jackson Hole, Wyoming, tomorrow. The Dow lost 33 points, with 19 of its 30 components declining; the S&P 500 Index was down almost 3 points; and the Nasdaq dropped more than 5 points. Advancers led decliners by about five to four on the NYSE and by about eight to seven on the Nasdaq. The prices of Treasuries declined. Gold futures fell $5.10 to settle at $1,324.60 an ounce. The price of crude oil increased $0.56, settling at $47.33 a barrel.

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How premier advisors build teams—part 2: The informal team

Team meetingA Colorado practice expands to serve its ultra-high-net-worth clients.

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Todd Crawley: This week we learn how an informal team structure helps a Colorado practice serve its ultra-high-net-worth clients. I’m Todd Crawley and this is The Essential Practice. Matt Lobas is a divisional sales manager with Wells Fargo Asset Management. He joins us once again to discuss best practices of premier advisors and teams. Matt, welcome!

Matt Lobas: Thank you very much, Todd.

Todd: Last week, Matt, you provided a great example of a formal team. This week, we’re talking about informal teams. But real quick, Matt, the data that supports why advisors might consider forming teams is actually pretty staggering. Shed some light on that if you wouldn’t mind.

Matt: Absolutely correct, Todd. We went out and did some research with Cerulli Associates, and in the 2015 data we saw on the financial metric of advisors, that we thought was very interesting. And what they did, they looked at advisors at various asset levels—below $50 million, $50 to $100 million, $100 to $250 million, and $250 to $500 million. And what they found looking at advisors who had over $500 million in assets—99% were on teams. So there was absolutely no question that the larger practices that control the majority of the assets are in fact on teams.

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Why 70% of consumers haven’t bought digital videos

Stocks declined today, as investors await Fed Chair Janet Yellen’s speech at this Friday’s central bank retreat in Jackson Hole, Wyoming.

The Dow fell 65 points, with 21 of its 30 components retreating; the S&P 500 Index lost 11 points; and the Nasdaq dropped 42. Decliners topped advancers by nine to four on the NYSE and by two to one on the Nasdaq. The prices of Treasuries weakened. Gold futures decreased by $16.40 to close at $1,329.70 an ounce. The price of crude oil fell $1.33, settling at $46.77 a barrel, after reports showed stockpiles rose above estimates last week.

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Taking a holistic view of high-yield bonds

Hands framing a sunsetMargie Patel explains: The whole economic picture looks pretty encouraging for investors.

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Margie Patel: I think investors are too preoccupied with very short-term developments and need to step back a little bit and look at the whole economic picture.

Laurie King: That’s Margie Patel. I’m Laurie King and you are On the Trading Desk. Margie joined us to explain how to rise above the headlines for a clearer view of high yield. As Margie views the market—a couple economic factors point to optimism.

Margie: I try to look at whatever indicators we can see that indicates if there’s a change in the market outlook, and the indicators I look at, especially relating to employment, suggest that the economy is on pretty firm footing and we should continue to look for growth ahead in jobs and income, relatively modest, to be sure, but sustainable. That’s a pretty good backdrop for investors.

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Stocks rebound. Optimism emerges for a pessimist.

Today’s Daily Advantage comes to us from guest writer Jim Durning.

Major stock indexes in the U.S. marked modest gains as oil prices recovered. Reports surfaced that Iran would attend meetings of the Organization of Petroleum Exporting Countries next month, raising hopes for an agreement to curb oil production in support of higher prices. The Dow added almost 18 points, with 18 of its 30 components advancing; the S&P 500 Index was more than 4 points higher; and the Nasdaq gained more than 15 points. Advancers led decliners by more than nine to four on the NYSE and about nine to five on the Nasdaq. The prices of Treasuries retreated. Gold futures increased $2.70 to settle at $1,346.10 an ounce. The price of crude oil increased $0.69, settling at $48.10 a barrel.
In earnings news:

  • Best Buy Co. Inc. reported fiscal second-quarter results that beat expectations. For the quarter that ended July 30, earnings rose to $198 million from $164 million in the same period a year ago. Same-store sales increased 0.8%, compared with an estimate of a 0.4% decline. Shares (BBY) of the company gained 19.60% in trading.
  • Toll Brothers Inc. posted third-quarter net earnings were $105.5 million, up from $66.7 million a year ago. Company shares (TOL) added 8.80% in trading.
  • J.M. Smucker Co. reported a 7% decline in fiscal first-quarter revenue, which it attributed to lower prices, the divestiture of its milk business, and a disappointing performance in its pet foods segment. The company reaffirmed its full-year earnings target but said that price deflation is a result of consumers’ shift away from packaged goods and toward more fresh and natural options. The company reported that revenue fell to $1.82 billion from $1.95 billion. Shares (SJM) of the company fell 8.07% on the day.

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Fact: 32% of the Fed’s past 60 rate hikes were in election years

If you think the Federal Reserve (Fed) won’t hike rates before the presidential election on November 8, think again. Of the 60 rate hikes that have happened since 1980, 32% have occurred in election years. Considering presidential elections happen every four years (25% of the years), the data suggests the Fed is actually more than happy to hike in an election year.

The Fed has three more meetings in 2016: in September, November, and December. Many people argue that the Fed won’t hike in September or November because—in addition to the fact the data doesn’t support a rate hike—it’s just too close to the election. I think that second argument doesn’t hold water. If the data supports hiking rates, the Fed will hike whether there’s a presidential election or not.

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New study: Food blogs overtake cookbooks

Stocks ended mixed as earnings season wraps up; oil prices continue to fluctuate; and all eyes turn to the Fed, which will hold its Jackson Hole Symposium later this week.

The Dow fell 23 points, with 17 of its 30 components retreating; the S&P 500 Index slipped by 1 point; and the Nasdaq added 6. Decliners held a slight edge over advancers on the NYSE, and advancers topped decliners by six to five on the Nasdaq. The prices of Treasuries strengthened. Gold futures decreased by $2.80 to close at $1,343.40 an ounce. The price of crude oil fell $1.70, or 3.46%, settling at $47.41 a barrel, due to concerns ranging from growing Chinese fuel exports to rising U.S. rig counts.

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Circling hawks give markets jitters

Recent comments from Federal Reserve officials supporting rate hikes as early as September put the markets on edge today, with the Dow dropping more than 100 points before paring its losses.

The Dow lost 45 points, with 19 of its components declining; the S&P 500 Index fell 3; and the Nasdaq dropped 1. Decliners outpaced advancers by 3 to 2 on the NYSE and by 10 to 9 on the Nasdaq. Treasury prices weakened. Gold futures fell $11 to close at $1,346.20 an ounce. Crude-oil futures gained $0.22 to settle at $49.11 a barrel.

For the week, the Dow was down 0.14%, the S&P 500 Index declined 0.02%, and the Nasdaq added 0.10%.

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Back-to-school shopping insights

Today’s Daily Advantage comes to us from guest writer Jim Durning.

Major stock indexes in the U.S. were mildly positive with advancing shares leading decliners for the day. The Dow added almost 24 points, with 19 of its 30 components advancing; the S&P 500 Index was almost 5 points higher; and the Nasdaq gained more than 11 points. Advancers led decliners by more than nine to four on the NYSE and more than nine to five on the Nasdaq. The prices of Treasuries increased. Gold futures increased $8.40 to settle at $1,357.20 an ounce. The price of crude oil increased $1.37, settling at $48.89 a barrel.

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