Statistic of the Week:
The idea of working in retirement seems to be gaining popularity across multiple generations. 64% of Baby Boomers expect to work during retirement. 79% of Gen Xers and 83% of Millennials have the same idea. 50% of Millennials believe they need to take on a second job to reach their retirement goals.
The US Federal Reserve met market expectations and increased benchmark interest rates a quarter point to the range of 0.75% to 1.00%. The Fed indicated that there would be further action this year. The European Central Bank issued guidance that there would be little to no additional stimulus from their institution for the rest of this year.
Market Moving Events:
Wednesday: Existing Home Sales, Petroleum Status Report Thursday: Jobless Claims, New Home Sales Friday: Durable Goods Orders
With the Federal Reserve following an expected course of action, domestic equity markets were generally subdued on the week. The S&P 500 rose 0.28% as the DJIA climbed 0.08%.1 The NASDAQ put in a slightly better gain, up 0.70%; it has been the stand-out performer thus far in 2017, up close to 10% year to date.2 We did see some initial volatility in the fixed income markets around the Federal Reserve announcement. But, by the end of the week, yields on the 10-year Treasury had fallen to 2.50%.3 It was not just the central bank in the US making news last week. As noted in the “Global Perspective,” the European Central Bank believes that it has won its battle against deflation and expects no further stimulus moves.4 Both the Japanese and Chinese central banks decided to keep their policy rates unchanged.5 Last year, the Federal Reserve was projecting that it would take more aggressive action than investors believed; this year, it is the opposite. Investors are of the mindset that the Fed will take a more aggressive tack than the Fed has stated.6 This too could lead to volatility. Economic reports are thin this week, but the focus will be on housing. Both existing and new home sales reports will be released. The housing starts report (chart right) was released last week, and showed steady gains. Housing is directly linked to consumer confidence and is a bellwether for the economy. - Dan McElwee, CFP®
Chart of the Week: