Economic and Investment News Bits
  • So goes Jan, Feb, Mar, April, May, June and July: Only the 4th calendar year in history (since 1926) that the first seven months of the year were all positive for the S&P 500 Index. (Source: BlackRock)
  • The worst performing month for the S&P 500 has been August, suffering an average loss of -0.7% over the last 25 years (1992-2016).
  • The last year when the high close for the S&P 500 occurred during August was in 1987 (30 years ago). Since then, the high close for the index has occurred in December 16 times (over 50% of the time).
  • “Downgrade”: The S&P 500 gained +11.0% per year over the 70+ years that Standard & Poors gave the USA their top credit rating. Since they downgraded the USA 6 years ago, the S&P 500 has gained +15.3% per year.  Meanwhile, the yield on the US 10-year Treasury note has fallen from 2.57% to 2.19%.  Lower yields typically indicate less perceived risk in a bond.
  • Exporter Boost: Earnings for companies with more than 50% of sales outside the U.S. grew by 14% while earnings for companies with more than 50% of sales inside the U.S. grew by only 8.5%. (Source: FactSet)
  • 42% of U.S. consumer spending is by Americans 55 and older. (Source: Moody’s Analytics)
  • “4-year” College Degree: Only 40% of full-time college students enrolled at a 4-year American college graduate within 4 years. Only 13% of part-time students graduate with their 4-year degree within 8 years. (Source:  Complete College America)


Thought for the Month

“Humor is laughing at what you haven’t got when you ought to have it.”

Langston Hughes, American poet (1902-1967)


Article – “It’s Not Just Amazon’s Fault”

Retail stocks have struggled this year down -13% compared to the S&P 500’s nearly +9% increase.  We read an interesting article by Vitaliy Katsenelson, CFA last month titled “It’s not just Amazon’s fault.”  Katsenelson’s conclusion is that consumers’ purchasing habits have changed, the U.S. is “over-retailed” with too many brick and mortar stores, and that consumer spending is being diverted to different parts of the economy (i.e. paying down debt, increasing health care costs).


Chart for the Month (CLICK TO ENLARGE)


Whether you call it “pop”, “soda”, or “Coke”, Americans now drink more bottled water than these carbonated beverages to become the leading “soft drink”.  Bottled water sales have been driven by consumer concerns about the effects of sugar, caffeine, and artificial colors and sweeteners.  Additionally, sales were boosted by scares over possible water contamination.  Despite the fact that 45% of bottled water brands are sourced from municipal water supplies, bottled water sales have doubled every 10 years since 1986.


Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment, strategy, or product or any non-investment related content, made reference to directly or indirectly in this newsletter, will be suitable for your individual situation, or prove successful. This material is distributed by PDS Planning, Inc. and is for information purposes only.  Although information has been obtained from and is based upon sources PDS Planning believes to be reliable, we do not guarantee its accuracy.  It is provided with the understanding that no fiduciary relationship exists because of this report.  Opinions expressed in this report are not necessarily the opinions of PDS Planning and are subject to change without notice.  PDS Planning assumes no liability for the interpretation or use of this report. Consultation with a qualified investment advisor is recommended prior to executing any investment strategy. No portion of this publication should be construed as legal or accounting advice.  If you are a client of PDS Planning, please remember to contact PDS Planning, Inc., in writing, if there are any changes in your personal/financial situation or investment objectives.  All rights reserved.