Author Archive for Tonya Ryan

Happy Holidays 2019

From SENB Bank to your family – have a safe and happy holiday season!

The Flat-Out Truth


What is a yield curve, and why are stock investors interested in its shape?

A yield curve gives a snapshot of how yields vary across bonds of similar credit quality, but different maturities, at a specific point in time. For example, the US Treasury yield curve indicates the yields of US Treasury bonds across a range of maturities. Bond yields change as markets digest news and events around the world, which also causes yield curves to move and change shape over time.

Exhibit 1 includes snapshots of the US Treasury yield curve on the last trading day of September for the last three years. Rates across the entire curve have generally moved higher since 2016. However, short-term rates moved at a faster pace than long-term rates leading to a “flattening” of the slope of the yield curve.

Historically, yield curves have mostly been upwardly sloping (short-term rates lower than long-term rates), but there have also been several periods when the yield curve has either been flat or inverted. One question often posed by investors is whether inverted yield curves predict a future stock market decline. While the handful of instances of curve inversions in the US may concern investors, the small number of examples makes it difficult to determine a strong connection, and evidence from around the world suggests investors should not extrapolate from the US experience.


Exhibit 1.  The US Yield Curve Has Flattened in 2018

US Treasury yield curve data (monthly) obtained from US Department of the Treasury website. Past performance is no guarantee of future results.

THE US MARKET

Exhibit 2 illustrates growth of a hypothetical $1,000 investment in the S&P 500 Index since June 1976 plotted against the difference between 10-year and 2-year Treasury yields. This difference is referred to as the term spread[1] and is a commonly used measure of yield curve steepness. Also marked on the chart are the onset of the four periods when the yield curve inverted for at least two consecutive months, and short-term rates began to exceed long-term rates.


Exhibit 2. Relation Between Yield Curve Inversions and US Stock Market Performance Monthly Data: June 1976–September 2018

US Treasury yield curve data (monthly) obtained from FRED, Federal Reserve Bank of St. Louis. S&P 500 Index © 2018 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is no guarantee of future results.

The inversion prior to the 2008 financial crisis is interesting to review. The US yield curve inverted in February 2006, after which the S&P 500 Index posted a positive 12-month return. The yield curve’s slope became positive again in June 2007, well prior to the market’s major downturn from October 2007 through February 2009. If an investor had interpreted the inversion as a sign of an imminent market decline, being out of stocks during the inverted period could have resulted in missing out on stock market gains. And if the same investor bought additional stock once the curve’s slope became positive, they would also have been exposed to the stock market weakness that followed.

INCREASING THE SAMPLE

The small number of US yield curve inversions over the last 40 years makes it challenging to draw strong conclusions about the effect on stock market performance. We can, however, look at other countries to gain a better sense of the relation between inversions and subsequent market returns. Exhibit 3 shows the hypothetical growth of 1,000 of the country’s local currency invested in the local stock market index the month before yield curve inversions began in five major developed nations, including the US, since 1985.

In 10 out of 14 cases of inversion, local investors would have had positive returns investing in their home markets after 36 months. This is not much less than the historical experience of these markets over the same time frame, regardless of the shape of the yield curve. These results show that it is difficult to predict the timing and direction of equity market moves following a yield curve inversion.


Exhibit 3.  Stock Market Performance in Selected Developed Countries Following a Yield Curve Inversion

Yield curve inversions based on 2-year and 10-year government bond yields for each country. Yields obtained from Reserve Bank of Australia, Bundesbank, Japanese Ministry of Finance, Bank of England, European Central Bank, and US Federal Reserve. Stock returns based on local currency MSCI indices. MSCI Australia Index (gross div., AUD), MSCI Germany Index (gross div., EUR), MSCI Japan Index (gross div., JPY), MSCI United Kingdom Index (gross div., GBP), MSCI USA Index (gross div., USD.) These countries were selected to represent the world’s major developed country currencies. Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. MSCI data © MSCI 2018, all rights reserved. Past performance is no guarantee of future results.

Though the data set is limited, an analysis of yield curve inversions in five major developed countries shows that an inversion may not be a reliable indicator of stock market downturns. So, what can investors do if they are concerned about potential equity weakness? By developing and sticking to a long-term plan that is in line with their risk tolerance, investors may be better able to look past short-term noise and focus on investing in a systematic way that will help meet long-term goals.

APPENDIX:  TERM SPREAD AND SELECTED INVERSION EVENTS

For the purposes of this paper, a new inversion is defined, based on month-end data, as two consecutive months of inversion. Using two consecutive months of inversion helps to avoid short-term events that may not be as impactful to markets. An inversion is deemed to have ended when there has been no more than one inversion within a 12-month period. (Again, we apply the one-month exception to avoid potential false positives.)

 


1 Term spread is the yield difference between bonds with different maturities but similar credit quality.

2 The data showed a 71% chance (10 of 14) of a three-year positive return following a yield curve inversion. To compare, we measured returns three years following every month-end between January 1985 and December 2014 in each of the five markets based on the local currency MSCI indices. The average chance of a three-year positive return in those five markets was 77%.

Source: Dimensional Fund Advisors LP.

Indices are not available for direct investment. Their performance does not reflect the expenses associated with the management of an actual portfolio. Past performance is not a guarantee of future results. Diversification does not eliminate the risk of market loss.

There is no guarantee investment strategies will be successful. Investing involves risks, including possible loss of principal. Investors should talk to their financial advisor prior to making any investment decision. There is always the risk that an investor may lose money. A long-term investment approach cannot guarantee a profit.

All expressions of opinion are subject to change. This article is distributed for informational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products, or services. Investors should talk to their financial advisor prior to making any investment decision.

End-Of-The-Year Money Moves

Here are some things you might want to do before saying goodbye to 2018. 

What has changed for you in 2018? Did you start a new job or leave a job behind? Did you retire? Did you start a family? If notable changes occurred in your personal or professional life, then you will want to review your finances before this year ends and 2019 begins.
   
Even if your 2018 has been relatively uneventful, the end of the year is still a good time to get cracking and see where you can plan to save some taxes and/or build a little more wealth. 
  
Do you practice tax-loss harvesting? That is the art of taking capital losses (selling securities worth less than what you first paid for them) to offset your short-term capital gains. If you fall into one of the upper tax brackets, you might want to consider this move, which directly lowers your taxable income. It should be made with the guidance of a financial professional you trust.1 
  
In fact, you could even take it a step further. Consider that up to $3,000 of capital losses in excess of capital gains can be deducted from ordinary income, and any remaining capital losses above that can be carried forward to offset capital gains in upcoming years. When you live in a high-tax state, this is one way to defer tax.1
  
Do you want to itemize deductions? You may just want to take the standard deduction for 2018, which has ballooned to $12,000 for single filers and $24,000 for joint filers because of the Tax Cuts & Jobs Act. If you do think it might be better for you to itemize, now would be a good time to get the receipts and assorted paperwork together. While many miscellaneous deductions have disappeared, some key deductions are still around: the state and local tax (SALT) deduction, now capped at $10,000; the mortgage interest deduction; the deduction for charitable contributions, which now has a higher limit of 60% of adjusted gross income; and the medical expense deduction.2,3
   
Could you ramp up 401(k) or 403(b) contributions? Contribution to these retirement plans lower your yearly gross income. If you lower your gross income enough, you might be able to qualify for other tax credits or breaks available to those under certain income limits. Note that contributions to Roth 401(k)s and Roth 403(b)s are made with after-tax rather than pre-tax dollars, so contributions to those accounts are not deductible and will not lower your taxable income for the year. They will, however, help to strengthen your retirement savings.4
  
Are you thinking of gifting? How about donating to a qualified charity or non-profit organization before 2018 ends? In most cases, these gifts are partly tax deductible. You must itemize deductions using Schedule A to claim a deduction for a charitable gift.5
 
If you donate publicly traded shares you have owned for at least a year, you can take a charitable deduction for their fair market value and forgo the capital gains tax hit that would result from their sale. If you pour some money into a 529 college savings plan on behalf of a child in 2018, you may be able to claim a full or partial state income tax deduction (depending on the state).2,6
  
Of course, you can also reduce the value of your taxable estate with a gift or two. The federal gift tax exclusion is $15,000 for 2018. So, as an individual, you can gift up to $15,000 to as many people as you wish this year. A married couple can gift up to $30,000 in 2018 to as many people as they desire.7
  
While we’re on the topic of estate planning, why not take a moment to review the beneficiary designations for your IRA, your life insurance policy, and workplace retirement plan? If you haven’t reviewed them for a decade or more (which is all too common), double-check to see that these assets will go where you want them to go, should you pass away. Lastly, look at your will to see that it remains valid and up-to-date.  
  
Should you convert all or part of a traditional IRA into a Roth IRA? You will be withdrawing money from that traditional IRA someday, and those withdrawals will equal taxable income. Withdrawals from a Roth IRA you own are not taxed during your lifetime, assuming you follow the rules. Translation: tax savings tomorrow. Before you go Roth, you do need to make sure you have the money to pay taxes on the conversion amount. A Roth IRA conversion can no longer be recharacterized (reversed).8
  
Can you take advantage of the American Opportunity Tax Credit? The AOTC allows individuals whose modified adjusted gross income is $80,000 or less (and joint filers with MAGI of $160,000 or less) a chance to claim a credit of up to $2,500 for qualified college expenses. Phase-outs kick in above those MAGI levels.9
  
See that you have withheld the right amount. The Tax Cuts & Jobs Act lowered federal income tax rates and altered withholding tables. If you discover that you have withheld too little on your W-4 form so far in 2018, you may need to adjust your withholding before the year ends. The Government Accountability Office projects that 21% of taxpayers are withholding less than they should in 2018. Even an end-of-year adjustment has the potential to save you some tax.10
  
What can you do before ringing in the New Year? Talk with a financial or tax professional now rather than in February or March. Little year-end moves might help you improve your short-term and long-term financial situation.
  
 


This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
 
Please Note: Investment products provided by SENB Wealth Management are not FDIC insured, are not obligations of, deposits of, or guaranteed by any financial institution, involve Investment risk, Including the possible loss of principal amount invested, are not insured by any federal government agency.
    
Citations.
1 – nerdwallet.com/blog/investing/just-how-valuable-is-daily-tax-loss-harvesting/ [4/16/18]
2 – marketwatch.com/story/how-to-game-the-new-standard-deduction-and-3-other-ways-to-cut-your-2018-tax-bill-2018-10-15 [10/15/18]
3 – hrblock.com/tax-center/irs/tax-reform/3-changes-itemized-deductions-tax-reform-bill/ [10/10/18]
4 – investopedia.com/articles/retirement/06/addroths.asp [2/2/18]
5 – investopedia.com/articles/personal-finance/041315/tips-charitable-contributions-limits-and-taxes.asp [10/1/18]
6 – savingforcollege.com/article/how-much-is-your-state-s-529-plan-tax-deduction-really-worth [9/27/18]
7 – fool.com/retirement/2018/06/28/5-things-you-might-not-know-about-the-estate-tax.aspx [6/28/18]
8 – marketwatch.com/story/how-the-new-tax-law-creates-a-perfect-storm-for-roth-ira-conversions-2018-03-26 [9/15/18]
9 – fool.com/investing/2018/03/17/your-2018-guide-to-college-tuition-tax-breaks.aspx [3/17/18]
10 – money.usnews.com/money/personal-finance/taxes/articles/2018-10-16/should-you-adjust-your-income-tax-withholding [10/16/18]

 

Social Security Gets Its Biggest Boost in Years

Seniors will see their retirement benefits increase by an average of 2.8% in 2019

Social Security will soon give seniors their largest “raise” since 2012. In view of inflation, the Social Security Administration has authorized a 2.8% increase for retirement benefits in 2019.1      

This is especially welcome, as annual Social Security cost-of-living adjustments, or COLAs, have been irregular in recent years. There were no COLAs at all in 2010, 2011, and 2016, and the 2017 COLA was 0.3%. This marks the second year in a row in which the COLA has been at least 2%.2

Not every retiree will see their benefits grow 2.8% next year. While affluent seniors will probably get the full COLA, more than 5 million comparatively poorer seniors may not, according to the Senior Citizens League, a lobbying group active in the nation’s capital.1

Why, exactly? It has to do with Medicare’s “hold harmless” provision, which held down the cost of Part B premiums for select Medicare recipients earlier in this decade. That rule prevents Medicare Part B premiums, which are automatically deducted from monthly Social Security benefits, from increasing more than a Social Security COLA in a given year. (Without this provision in place, some retirees might see their Social Security benefits effectively shrink from one year to the next.)1

After years of Part B premium inflation being held in check, the “hold harmless” provision is likely fading for the above-mentioned 5+ million Social Security recipients. They may not see much of the 2019 COLA at all.1

Even so, the average Social Security beneficiary will see a difference. The increase will take the average individual monthly Social Security payment from $1,422 to $1,461, meaning $468 more in retirement benefits for the year. An average couple receiving Social Security is projected to receive $2,448 per month, which will give them $804 more for 2019 than they would get without the COLA. How about a widower living alone? The average monthly benefit is set to rise $38 per month to $1,386, which implies an improvement of $456 in total benefits for 2019.1

Lastly, it should be noted that some disabled workers also receive Social Security benefits. Payments to their households will also grow larger next year. Right now, the average disabled worker enrolled in Social Security gets $1,200 per month in benefits. That will rise to $1,234 per month in 2019. The increase for the year will be $408.1

Gregg A Hancock Jr.

Vice President SENB Wealth Management

Trust Business Development Officer

SENB Wealth Management

309-517-5122

wealthmanagement@senb.com

www.senb.com

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

Please Note: Investment products provided by SENB Wealth Management are not FDIC insured, are not obligations of, deposits of, or guaranteed by any financial institution, involve Investment risk, Including the possible loss of principal amount invested, are not insured by any federal government agency.

 

Citations.

1 – fool.com/retirement/2018/10/26/heres-what-the-average-social-security-beneficiary.aspx [10/26/18]

2 – tinyurl.com/y9spspqe [8/31/18]

 

Board of Director, SENB Bank, Dick Kleine – Awarded 2018 Outstanding Philanthropist by Association of Fundraising Professionals, IL QC Chapter

 

Dick Kleine

Dick Kleine, 2018 Outstanding Philanthropist. Nominated by Sherry Ristau, Quad Cities Community Foundation

Dick passionately says that there are three stages in life: Learning, Earning, and Returning. He believes that once one has had the opportunity to learn and has put in the work to earn, it is finally time to return — to give back to the community that he loves so well, through leadership, volunteering, and philanthropy. He lives this belief every day as evidenced in the long list of accomplishments.

As a community leader, Dick helped launch the Achieve Quad Cities program, designed to reduce the high school dropout rate. He served as Chairman for the United Way campaign for the Quad Cities. He was a member of the Quad City Times Editorial Board, served on the Task Force for a Quad City Scan, and passionately served his church and the Diocese of Davenport.

Dick has volunteered at the Community Foundation of the Great River Bend for over 20 years, including eight years on the Board of Directors, two years as the Board Chair, and volunteering in a staff position as the Director of Corporate Relations. He also contributed funds to set up the first-ever Donor Advised Fund at the CFGRB, which has granted to over 70 non-profits in the Quad Cities community.

Dick served on the steering committee for the Genesis Health Foundation’s Clarissa C. Cook Hospice House endowment and he continues to sere on the Genesis Health System Foundation Board of Directors today. Dick has served on the Board of Directors for The Carmelite System, Center for Active Seniors (CASI), Handicapped Development Center, Family Resources, and Advisory Council for the Business School at St. Ambrose University, Diocese of Davenport and St. John Vianney.

These contributions tell only the story of Dick’s volunteer impact. As a professional, Dick developed an innovative participatory management style that was written about in the book Worker Leadership: America’s Secret Weapon in the Battle for Industrial Competitiveness, published in 2013.

Dick believes that personal philanthropy is important — he strives not to just meet fundraising goals, but to achieve goals that effect change at a community-wide level for greatest impact.

This article was shared from the AFP 2018 National Philanthropy Day Conference Book  and the nomination printed was written by Sherry Ristau, Quad Cities Community Foundation

Daniel P. Daly, President and CEO of SENB Bank, thanks you, Quad Cities!

Daniel P. Daly, President and CEO of SENB Bank wishes to thank everyone in the Quad Cities for voting for SENB Bank as the Reader’s Choice Winner for “Best Bank”

 

 

 

SENB Bank Selected Quad Cities’ ‘Best Bank’ – Thank You!

Thank you, Quad Cities, for voting SENB Bank as your Reader’s Choice Winner for Best Bank. “We feel very honored to receive this recognition.  for 57 years SENB Bank has worked diligently to serve the Quad Cities community and to give back to the community that supports us each day”, said Daniel P. Daly, President and CEO.  “We could not have achieved this great honor without our wonderful SENB Bank team and our very loyal customers.”

SENB Bank is focused on providing a Smart. Easy. Notably Better banking experience.  Our expectation is that every one of our customers receives the very best customer service and that we build a relationship as their thrusted financial partner.  Continuously, SENB has been recognized by Customer Service Profiles as ranking #1 for our peer group in Customer Performance and Satisfaction.

SENB Bank offers an array of deposit and lending products to meet the needs of today’s customer.  Our attractive Kasasa Checking accounts reward our customers with monthly cash incentives and rebates on all ATM transactions.  Our customers earn high yields with Kasasa Saver.  You can do your banking anytime, anywhere with using our online banking or mobile app.

We offer competitively priced mortgage loans specifically structured to meet the individual demands of our customers.  In addition, we offer home equity conversion mortgages for clients 62 years or older.  Qualified clients can use the equity in their homes to provide resources to meet their needs.  For businesses, SENB Bank offers a full line of commercial lending and treasury services.  All of these products and services are delivered by experienced and local lenders ready to meet your financing needs.

Our professional Wealth Management team is ready with outstanding investment tools and services to assist you with your plans for retirement, securing your family’s future, or advising you on your asset management needs.

Today, SENB Bank is a $215 million full service community financial institution offering a full array of deposit, lending, wealth management, and other services from locations in both Illinois and Iowa.

To learn more about SENB Bank please visit us at www.senb.com.  SENB Bank.  Smart. Easy. Notably Better.

Is It Time To Stop Procrastinating About Your Financial Plan?

Some things to think about as you get started with your strategy.

Provided by:

First, look at your expenses and your debt. Review your core living expenses (such as a mortgage payment, car payment, etc.). Can any core expenses be reduced? Investing aside, you position yourself to gain ground financially when income rises, debt shrinks, and expenses decrease or stabilize.

Maybe you should pay your debt first, maybe not. Some debt is “good” debt. A debt might be “good” if it brings you income. Credit card debt is generally deemed “bad” debt.

If you’ll be carrying a debt for a while, put it to a test. Weigh the interest rate on that specific debt against your potential income growth rate and your potential investment returns over the term of the debt.

Of course, paying off debts, paying down balances, and restricting new debt all works toward improving your FICO score, another tool you can use in pursuit of financial freedom (we’re talking “good” debts).1

Implement or refine an investment strategy. You’re not going to retire solely on the elective deferrals from your paycheck; you’re to going retire (hopefully) on the interest that those accumulated assets earn over time, assisted by the power of compounding.

Manage the money you make. If you simply accumulate unmanaged assets, you have money just sitting there that may be exposed to risk – inflation risk, market risk, even legal risks. Don’t forget taxes. The greater your wealth, the more long-range potential you have to accomplish some profound things – provided your wealth is directed.

If you want to build more wealth this year or in future years, don’t go without a risk management strategy that might be instrumental in helping you retain it. Your after-tax return matters. Risk management should be part of your overall financial picture.

Request professional guidance. A considerate financial professional should educate you about the principles of wealth building. You can draw on that professional knowledge and guidance this year – and for years to come.    

 

Gregg A Hancock Jr.

Vice President SENB Wealth Management

Trust Business Development Officer

SENB Wealth Management

309-757-0700

wealthmanagement@senb.com

www.senb.com

 

Please Note: Investment products provided by SENB Wealth Management are not FDIC insured, are not obligations of, or guaranteed by any financial institution, involve investment risk, including the possible loss of principal amount invested, are not insured by any federal government agency. This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Citations.

1 – experian.com/blogs/ask-experian/credit-education/improving-credit/improve-credit-score/ [5/30/18]

Daniel Daly Elected Chairman of the Board of the Illinois Bankers Association

SPRINGFIELD, ILLINOIS – Daniel P. Daly was elected Chairman of the Illinois Bankers Association (IBA) on June 22 during the organization’s Annual Conference at the Hilton Chicago. He is President and CEO of SENB Bank, serving the Quad Cities Illinois-Iowa metropolitan area.

Daly will serve as the IBA Chairman for the 2018 fiscal year, and he will lead the IBA board as it continues to execute its strategic plan, improve the banking and business climate in Illinois for the benefit of all communities, and provide innovative solutions for its member banks. He has served on the IBA Board since 2009.

Over the last 30 years, Daly served in executive roles with several financial institutions prior to joining SENB Bank.  He was the Founding President and Chief Executive Officer of First Capital Bank, which opened its doors for business in 1996, the first new bank chartered in Peoria, Illinois in over 27 years. First Capital Bank’s assets grew from $5.3 million at inception to over $254 million in six years, prior to its acquisition by First Busey Corp. in 2004.  He served as a Regional President for Busey Bank following this transaction. 

Daly is a 1974 graduate of Spalding Institute and a 1977 graduate of Bradley University.  A certified public accountant, he has focused his career on the financial services industry, beginning as an auditor and consultant with KPMG Peat Marwick in the late ‘70s.    

Daly has been actively involved in community efforts, and he currently serves on the boards of Empower Illinois, Renew Moline, Gilmore Foundation, Regional Opportunities Council, SAL Children and Family Services and the American Red Cross. 

Previously, he served in leadership roles on the boards of the Heart of Illinois United Way (and chaired its 1999 annual campaign), the Peoria Symphony Orchestra, Catholic Charities, the Finance Council of the Catholic Diocese of Peoria, the Boys and Girls Club of Greater Peoria, the EPIC Foundation, the Tri-County Urban League, the Community Foundation of Central Illinois, Human Service Center and Human Service Center Foundation, FC Peoria Soccer Club, the Peoria Park District Foundation and Fayette Companies.  He also chaired the Peoria County unit of the American Cancer Society and chaired that organization’s statewide fund-raising efforts.  He has served as chair and treasurer of the Peoria Civic Center Authority and Co-Chaired the $60 million redevelopment in 2005.  He also served as Chairman of the Peoria Riverfront Museum and co-chaired the construction of their $35 million museum in 2012. 

“The IBA is pleased and honored to have Dan lead our board and executive team,” IBA President and CEO Linda Koch said.  “He is a great asset to the association.”

 

The Illinois Bankers Association is a full-service trade association dedicated to creating a positive business climate that benefits the entire banking industry and the communities they serve. Founded in 1891, the IBA brings together state and national banks and savings banks of all sizes.

SENB Weekly Economic Update 7-16-18

INFLATION NEARS 3%

The federal government’s Consumer Price Index rose 2.9% across the 12 months ending in June, a level of annualized inflation last seen in February 2012. Yearly inflation has now increased for five straight months (although the headline CPI went north only 0.1% last month). The core CPI, which removes food and fuel costs, rose 0.2% in June, bringing its 12-month gain to 2.3%. Over the past 12 months, the cost of fuel oil climbed 30.8%; the cost of gasoline, 24.3%. Feeling the effect of those advances, the Producer Price Index rose 3.4% in the year ending in June.1,2

UNIVERSITY OF MICHIGAN CONSUMER SENTIMENT GAUGE DECLINES

At a mark of 97.1, the preliminary July edition of this consumer sentiment index came in 1.1 points underneath its final June reading. Still, it was close to its average reading over the past year (97.7). One year ago, the index stood at 93.4. Thirty-eight percent of consumers felt tariffs would negatively affect the economy, an increase from 21% in June and 15% in May.3

GOLD FALLS TO A 12-MONTH DELAY

At a mark of 97.1, the preliminary July edition of this consumer sentiment index came in 1.1 points underneath its final June reading. Still, it was close to its average reading over the past year (97.7). One year ago, the index stood at 93.4. Thirty-eight percent of consumers felt tariffs would negatively affect the economy, an increase from 21% in June and 15% in May.3

DOW CLIMBS BACK ABOVE 25,000

Finishing Friday’s trading session at 25,019.41, the blue chips rose 2.30% for the week, and outperformed the Nasdaq Composite and the S&P 500 over five days. The Nasdaq gained 1.79% to close out the week at 7,825.98, while the S&P advanced 1.50% to end the week at 2,801.31.5


TIP OF THE WEEK

There are multiple reasons why you should avoid taking a loan from your workplace retirement plan.

One excellent argument against this move: you will deprive the funds you borrow of compounding power.


THIS WEEK

Earnings take center stage: Bank of America, BlackRock, J.B. Hunt, and Netflix lead the way on Monday, when investors will also consider June retail sales figures. | Federal Reserve chair Jerome Powell begins two days of testimony before Congress on monetary policy on Tuesday; on the earnings front, Charles Schwab, Comerica, CSX, Fidelity National, Goldman Sachs, Johnson & Johnson, and UnitedHealth all announce. | Wednesday, earnings news rolls in from Abbott Labs, Alcoa, American Express, eBay, Grainger, IBM, Morgan Stanley, Northern Trust, Novartis, and U.S. Bancorp, and complementing all this, analysts consider June housing starts and building permits and a new Fed Beige Book. | On Thursday, BoNY Mellon, BB&T, Blackstone Group, Capital One, Celanese, Cintas, Dominos, E*TRADE, Fifth Third, GATX, KeyCorp, Microsoft, Nucor, Philip Morris, Snap-On, Sonoco, Travelers Companies, Unilever, and Union Pacific present earnings, and a new initial jobless claims report arrives. | Friday, earnings appear from Baker Hughes, General Electric, Honeywell International, Manpower, Regions Financial, Schlumberger, Stanley Black & Decker, State Street, and SunTrust Bank.


QUOTE OF THE WEEK

“Always aim at complete harmony of thought and word and deed.

MAHATMA GANDHI


 


 THE WEEKLY RIDDLE

How many times can you subtract 100 from 1,000?

LAST WEEK’S RIDDLE: Regina is about to meet her cousin Lydia for the first time. Regina has no idea what she looks like. She arrives at Lydia’s house at night. The door opens, and she sees a mail carrier, a UPS driver, and a police officer watching television. She immediately hugs Lydia. How does she know which one of the three is her cousin?

ANSWER: Two of the three are men.


Gregg A Hancock Jr.

Vice President SENB Wealth Management

Trust Business Development Officer

SENB Wealth Management

309-757-0700

wealthmanagement@senb.com

www.senb.com


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CITATIONS:

1 – tradingeconomics.com/united-states/inflation-cpi [7/12/18]

2 – investing.com/economic-calendar/ [7/13/18]

3 – sca.isr.umich.edu/ [7/13/18]

4 – marketwatch.com/story/gold-retreats-on-track-for-lowest-settlement-in-a-nearly-a-year-2018-07-13 [7/13/18]

5 – markets.wsj.com/us [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F13%2F17&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F13%2F17&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F13%2F17&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F12%2F13&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F12%2F13&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F12%2F13&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=7%2F14%2F08&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=7%2F14%2F08&x=0&y=0 [7/13/18]

6 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=7%2F14%2F08&x=0&y=0 [7/13/18]

7 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [7/13/18]

8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [7/13/18] 


 

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