Weekly Economic Update

WEEKLY ECONOMIC UPDATE November 13, 2017 CONSUMER SENTIMENT INDEX DECLINES

The University of Michigan’s monthly gauge of U.S. household sentiment fell to 97.8 in its initial November edition; analysts polled by Bloomberg estimated it would tick up to 100.8. While the 2.9-point dip from its final October level was the largest drop in a year, the index remained near a 13-year peak. Sixty percent of the consumers surveyed felt that stocks would rise in 2018.

Q3 EARNINGS: A LOOK AT THE SCORECARD

As of Friday, 87% of S&P 500 companies had reported third-quarter earnings. An analysis from Zacks Investment Research reveals that 73% have topped earnings forecasts; 67% have surpassed revenue estimates. So far, the earnings growth rate for S&P 500 firms in the third quarter is 6.8%, with revenues rising 6.2%. Zacks expects total earnings for the quarter to be 6.2% higher than Q3 2016, with year-over-year income growth at 5.7%.

A SLIGHT PULLBACK ON WALL STREET

Uncertainty about the potential for tax code reform led to some weakness in stocks over the past five trading days. The S&P 500 fell 0.21% for the week to 2,582.30; the Nasdaq Composite retreated 0.20% to 6,750.94. Blue chips took a deeper loss: the Dow Jones Industrial Average declined 0.50% to 23,422.21. The week was much rougher for the Russell 2000, which gave back 1.31% on the way to a Friday settlement of 1,475.27. The CBOE VIX ended the week at 11.29, rising 23.52% in five days. THIS WEEK: Monday, Tyson Foods presents Q3 results. On Tuesday, the October Producer Price Index is reported as well as earnings from Aramark and Beazer Homes. Wall Street looks at last month’s retail sales figures and Consumer Price Index on Wednesday, plus earnings from Cisco, L Brands, and Target. Thursday, reports on initial jobless claims and October industrial output complement earnings from Best Buy, Gap, Viacom, and Walmart. Friday, the Census Bureau issues a report on October housing starts and building permits.

VALUE AS OF 11/10/17

VALUE AS OF 12/31/16

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)

2,582.30 23,422.21 6,750.94 1,999.57 102.95 1.25% 1.37% 1.67% 2.40% $56.74

2,238.83 19,762.60 5,383.12 1,684.00 102.70 0.75% 0.62% 1.20% 2.45% $53.72

GOLD ($/OZ.)

$1,274.20

$1,151.70

BENCHMARKS

ONE WEEK TOTAL RETURN -0.14% -0.35% -0.20% -0.40% -0.40%

YTD TOTAL RETURN 17.33% 20.99% 25.41% 21.67% 2.95%

1-YEAR TOTAL RETURN 21.48% 27.48% 29.48% 24.62% 2.00%

WEEKLY TIP When a grandparent, relative or friend of the family pays for a child’s medical expenses that are not covered by insurance, direct payments to doctors for such costs are not considered gifts to the child and do not count against the annual gift tax exclusion amount (currently $14,000). DID YOU KNOW? One in every five adults believes that aliens are hiding on our planet disguised as humans.

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.