Weekly Economic & Market Update 9/8/2015

Week in Review

Across the board, global stock markets slid lower this past week on continued concern that the global economy is slowing. This past week started with a negative overtone as Chinese finance ministers stated that they were no longer going to support the Chinese stock market with liquidity injections (we will see about that). On Tuesday, South Korea reported a 14.7% drop in exports year-over-year, which reinforced the weakness of the global economy to those on the fence about it.

At the end of the week, what was declared to be the most important jobs report in sometime was released with the US adding a seasonally-adjusted 173,000 jobs in August. The consensus estimate was at 220,000. August’s jobs report is being viewed as important due to the releases’ proximity to the next US Federal Reserve (FED) meeting regarding interest rates. With the release coming in under the estimate, it is assumed that the FED will not raise rates in the face of a weak economy. Conversely, the report also showed a multi-year low in the unemployment rate which the FED strongly considers in its data dependency. In the end, the report left investors and analysts no closer to an answer as to when the FED will raise rates.

With the return of the recent volatility and the weight of the market to the downside, we remain with a larger cash position than normal for clients. As always, we continue to monitor the markets and will adjust as necessary.

Getting Technical with Market Charts

In this section we present charts of the S&P 500 Stock Index and the US Bond Market Index relative to their 50 day (blue line) and 200 day (red line) moving averages. In addition, we have added the blue shaded area which represents the recent trading channel. The 50 and 200 day moving averages are widely followed market trend indicators that provide a general picture of the health of the broad indexes.

Chart 1 – S&P 500

SPX 9.8.15

Chart 2 – Aggregate Bonds

AKG 9.8.15

Securities are offered through First Allied Securities, Inc. (FASI), a registered Broker Dealer, Member FINRA/SIPC. Advisory Services offered through Lighthouse Financial Advisors, Inc., a Registered Investment Advisor dba Lighthouse Wealth Management (LWM). Lighthouse Financial Advisors, Inc. is not a subsidiary or control affiliate of FASI.

Disclaimer – Information contained herein is taken from sources believed to be reliable, but cannot be guaranteed as to its accuracy. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. The Standard and Poors 500 Index is an unmanaged group of securities considered to be representative of the stock market in general. The Barclays Aggregate Bond Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment-grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. Contact your investment professional to discuss suitability for your particular circumstances. This article does not constitute an offer of sales of any securities. Securities trading is speculative and involves the potential loss of investment. Past results are not necessarily indicative of future results. Lighthouse Financial Advisors, Inc., dba Lighthouse Wealth Management, is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered, excluded or exempted from registration requirements. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the advisor has attained a particular level of skill or ability.