Weekly Economic Update

WEEKLY ECONOMIC UPDATE March 19, 2018 INVESTORS SELL AS THEY WAIT ON THE FED During the trading week before the Federal Reserve’s March policy meeting, all three major Wall Street benchmarks staged retreats. The Nasdaq Composite declined 1.04% across the week to 7,481.99; the S&P 500 fell 1.20% to 2,752.01. Blue chips took the biggest hit: the Dow Jones Industrial Average settled 1.51% lower for the week, slipping to 24,946.51 Friday. Rising 6.56% in five days, the CBOE VIX concluded the week at 15.60.

PRICE GAINS EASE There was no half-percent spike in inflation in February. In contrast to January’s big jump, the headline Consumer Price Index rose 0.2% in the second month of 2018, with the core CPI following suit; the year-over-year CPI gain ticked slightly higher to 2.2%. The headline and core Producer Price Index also increased 0.2% last month; yearly wholesale inflation rose just 0.1% to 2.8%.

THE CONSUMER IS CONFIDENT Displaying a preliminary March reading of 102.0, the University of Michigan’s consumer sentiment index reached a 14year peak last week. Analysts polled by Reuters expected the gauge to decline 0.6 points to 99.3. As for consumer habits, the Department of Commerce just noted a 0.1% retreat for retail sales in February; sales advanced 0.3% with gas and auto buying factored out.

THIS WEEK: Oracle announces quarterly results on Monday. Tuesday, FedEx distributes their earnings for the quarter. Wednesday, investors anticipate an interest rate hike from the Federal Reserve; in addition to the Fed’s latest policy announcement, the news stream also includes February existing home sales and earnings from Five Below, General Mills, and Guess. Thursday, Wall Street reviews new initial jobless claims figures and earnings news from Accenture, BP Midstream Partners, Carnival, Cintas, ConAgra Brands, Darden Restaurants, Lands’ End, Michaels Companies, Micron Technology, and Nike. On Friday, reports on February hard goods orders and new home sales are released. VALUE AS OF 3/16/18

VALUE AS OF 12/31/17

S&P 500 INDEX DOW JONES INDUSTRIAL NASDAQ AVERAGECOMPOSITE INDEX MSCI EAFE INDEX BARCLAYS AGGREGATE BOND FED FUNDS TARGET INDEX 6-MONTH US TREASURY YIELD 2-YR US TREASURY YIELD 10-YR TREASURY YIELD CRUDE OIL ($/BARREL)

2,752.01 24,946.51 7,481.99 2,040.90 100.18 1.50% 1.96% 2.31% 2.85% $62.34

2,673.61 24,719.22 6,903.39 2,050.85 103.07 1.50% 1.53% 1.89% 2.40% $60.42

GOLD ($/OZ.)

$1,312.30

$1,309.30

BENCHMARKS

ONE WEEK TOTAL RETURN -1.20% -1.51% -1.04% 0.20% 0.22%

YTD TOTAL RETURN 3.38% 1.47% 8.38% 0.05% -2.00%

1-YEAR TOTAL RETURN 17.79% 21.88% 26.68% 16.68% 1.43%

WEEKLY TIP Review and update beneficiaries for life insurance policies, IRAs, and 401k plans. Most people rarely look at it, but it is extremely important, especially if you have been through major changes such as getting married, divorced, or having kids. DID YOU KNOW? The chance of you dying on the way to get lottery tickets is actually greater than your chance of winning.

W. Kelly Montgomery, AIF®, APMA®, Vice President / Senior Portfolio Manager

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This material was prepared by the author and does not necessarily represent the views of the Bank of the Bluegrass & Trust Company, 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.