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Weekly Market Commentary
August 31, 2015
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The
Markets
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U.S. stock markets
finished last week higher than they started it, but the five-day ride was
awfully bumpy.
Concerns about China's
slowing growth, shifting currency valuations, and falling stock markets,
coupled with uncertainty about the Federal Reserve's next monetary policy
move, contributed to malaise in world markets early last week.
After falling by about
6 percent the previous week, U.S. stocks spiraled even lower early last week.
They flirted with correction status (a correction is a 10 percent drop from
previous highs) before moving higher.
By midweek, markets
were on the rebound, bolstered in part by the comments of New York Fed
President William Dudley who indicated a September rate hike might not be all
that compelling. Strong U.S. economic data also soothed some investors. Barron's reported:
"The economic
data, however, have been good enough to suggest that the market is too
pessimistic. There was that strong second-quarter gross-domestic-product
reading, which even included signs of stronger capital spending, while good
housing data suggest that third-quarter GDP could be better than many
observers expect."
Market whiplash left
investors feeling pretty shaky, as did late-week comments from Fed Vice
Chairman Stanley Fischer who indicated it was too soon to know what the Fed
would decide about interest rates in its September meeting. He indicated the
decision would depend on economic data that is still being collected.
While the market's end
of week bounce was welcome, The Wall Street Journal reported traders and
investors appear to be ready for additional volatility.
Whether markets are
volatile or calm this week, it's important to remember that it's impossible
for any of us to control what happens in Washington, on Wall Street, or on
Main Street. We can, however, control how we prepare for and respond to
market volatility. As you know, we believe thoughtful goal identification,
risk tolerance education, and a disciplined approach can help investors reach
their long-term financial goals.
We understand that
market volatility is uncomfortable, but it is not unusual or unexpected. If
you have any questions or would like to discuss recent events, please contact
your financial advisor.
HOW
BAD IS TRAFFIC CONGESTION IN THE UNITED STATES?
It's so bad, the
average American spends the equivalent of about five vacation days sitting in
traffic every year - and that's just the tip of the iceberg.
As it turns outs, the
Great Recession had a silver lining - less traffic and less congested roads.
Today, according to researchers at the Texas A&M Transportation
Institute, employment is up and so is the number of commuters on the road:
"According to the
2015 Urban Mobility
Scorecard, travel delays due to traffic congestion caused drivers
to waste more than 3 billion gallons of fuel and kept travelers stuck in
their cars for nearly 7 billion extra hours - 42 hours per rush-hour
commuter. The total nationwide price tag: $160 billion, or $960 per commuter."
Of course, in some
cities, people spend a lot more time inching along freeways. In Washington,
D.C., drivers spend about 82 hours each year commuting; in Los Angeles, 80
hours; in San Francisco, 78 hours; and in New York, 74 hours. Across the nation,
by 2020, commuter delays are expected to increase from 42 hours to 47 hours
on average, raising the cost of congestion from $160 billion to $192 billion.
What's to be done?
Cities like Singapore, London, San Diego, Stockholm, and Milan have adopted
"congestion pricing." In San Diego, express toll-lanes allow
drivers to bypass gridlocked free lanes, if they are willing to pay a fee.
Other cities have cordon pricing. Drivers are charged a fee each time they
enter a congested area, such as a city center. The state of Oregon is
charging per mile driven (a system the state may use to replace fuel taxes in
the future) and may begin to charge a higher rate for miles traveled during
periods of congestion on heavily used roads.
Weekly
Focus - Think About It
"If opportunity
doesn't knock, build a door."
--Milton
Berle, Comedian
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