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Q3 2018: Economic Commentary

Global financial markets posted mixed results during the second quarter of 2018 as investors balanced strong earnings, an improving labor market and better economic growth here in the U.S. with political turmoil in Europe and deteriorating trade relations worldwide. We present a few highlights from the 2Q18 below:

  • Despite heightened geopolitical rhetoric, the S & P 500, the Dow Jones Industrial Average, and the technology-heavy Nasdaq Composite continued to trade near record highs amid positive economic data and strong corporate earnings. On the economic front, the Federal Reserve raised interest rates by 25 basis points in June to a range of 1.75% to 2%, and upgraded their assessment of U.S. economic growth. Consequently, the FOMC now anticipates raising interest rates four times in 2018.
     
  • Developed international equity markets produced mixed results during the second quarter on political turmoil in Spain and Italy, and rising trade tensions with the U.S. Gains came out of Europe, while the Pacific region lagged. On the political front, the prospect of new elections in Italy and a vote of no confidence against Spanish Prime Minister Mariano Rajoy renewed fears of a Eurozone breakup. In the emerging markets, returns were held back by weak performances from Latin America heavyweights Brazil and Mexico.
     
  • Within fixed income, results were mixed as the Fed raised interest rates and the U.S. dollar rose sharply against most major currencies. The 10-year U.S. Treasury briefly traded above the key psychological level of 3% for the first time since January 2014 before settling slightly lower to end the second quarter. Foreign un-hedged bonds and emerging markets debt fell sharply as the U.S. dollar strengthened. Investment grade core U.S. fixed income produced lackluster results, while high yield credit fared marginally better.
     
  • Real estate, both in the U.S. and abroad, advanced during the quarter. In a reversal of the prior quarter, international real estate underperformed U.S. real estate. Commodities ended the quarter higher as energy prices remained resilient. Similarly, MLPs benefited from higher oil prices, an uptick in M&A activity and lack of any significant headline news.

An important lesson from 2Q18:

  • The second quarter of 2018 was a good reminder that investors must remain mindful of geopolitical and other event risk and the associated volatility that comes with it. The second quarter was marked by heightened global trade tensions, and in Europe politics was front and center, leading many to wonder if select policy decisions, legislation or elections were enough to derail financial markets. As we enter the second half of 2018, it is more important than ever to remain properly diversified. It is our continued belief that remaining patient and adhering to a well-constructed and diversified investment portfolio anchored to your time horizon and goals remains the prudent course of action.
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Q3 2018: Economic Commentary

By Lineweaver Financial Group
July 06, 2018 Category: Q3, 2018, Economic Commentary, Market Review

Global financial markets posted mixed results during the second quarter of 2018 as investors balanced strong earnings, an improving labor market and better economic growth here in the U.S. with political turmoil in Europe and deteriorating trade relations worldwide. We present a few highlights from the 2Q18 below: Despite heightened geopolitical rhetoric, the S P 500, the Dow Jones Industrial Average, and the technology-heavy Nasdaq Composite continued to trade near record highs amid positive economic data and strong corporate earnings. On the economic front, the Federal Reserve raised interest rates by 25 basis points in June to a range of 1.75% to 2%, and upgraded their assessment of U.S. economic growth. Consequently, the FOMC now anticipates raising interest rates four times in 2018. Developed international equity markets produced mixed results during the second quarter on political turmoil in Spain and Italy, and rising trade tensions with the U.S. Gains came out of Europe, while

HealthWatch: What Are Screens Doing to Our Eyes and Our Ability to See?

By Lineweaver Financial Group
July 06, 2018 Category: Healthwatch, Screens, Eye Strain, Newsletter

In todays society, if youre not sleeping, chances are youre looking at some type of screen. Whether its a computer monitor, a television, a handheld tablet, a GPS or our smartphones, we spend 10-14 hours a day staring at a screen. Many of us are familiar with the problems this can cause, such as headaches, dry eyes, eye muscle strain, and even blurred visionbut few of us know what can be done to correct it. The easiest thing to do would be to avoid screens as much as possible. However, for those of us who use our cellphones and computers every day for work, its impossible to avoid screen-time. So what are our options? One option is to adjust the brightness on your screen. Dr. Joshua Dunaief, a professor of ophthalmology at the University of Pennsylvanias Perelman School of Medicine also recommends shifting your screens color scheme away from blue and toward the yellow end of the spectrum. While some research has linked too much blue light exposure at night to insomnia, even daytime exposure

Letter From the President: Should You Take a Summer Vacation from Your Investments?

By Lineweaver Financial Group
July 06, 2018 Category: Letter From The President, Vacation From Investments

Theres an old saying youve probably heard that gets repeated every year in the spring and early summer that goes sell in May and go away. But is that good advice? Whats the best thing for you and your investments over the historically slower summer months? The phrase sell in May and go away is thought to originate from an old English saying, sell in May and go away, and come on back on St. Legers Day. This phrase refers to a custom of upper class aristocrats, traders and financiers who would leave London to spend the summer months in the country. Specifically, it refers to the St. Legers Stakes, a thoroughbred horse race held in mid-September. It turns out that the saying is based in solid analysis - From 1950 to around 2013, the Dow Jones Industrial Average has had an average return of only 0.3% during the May to October period, compared with an average gain of 7.5 percent during the November to April period, according to Forbes. But, since 2013 theres good reason to believe thats no

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