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Weekly Update - September 1, 2017

The Federal Reserves's Jackson Hole meeting held no surprises. Chair Yellen's comments about financial stability could been seen as dovish, but they were also a clear defense of current policy. Janet Yellen downplayed concerns about the regulation on bank lending and liquidity. ECB President Draghi did say that accommodation is still warranted. Most of his speech was a defense of international trade.

The North Korean missile launch over Japan took the headlines earlier in the week. Mr. Market continues to display concerns, but nothing close to panic. The markets believe that there will be some peaceful resolution to the issue.

Many investors are bracing themselves for turbulent markets in the weeks ahead. Historically, September has been a down month. Not, just because that has happened in the past doesn't mean it will happen again. The market doesn’t have to do anything, and certainly not what we think it should do. It does what it wants. Political and policy uncertainties have brought volatility up, again. I would view any market weakness as a buying opportunity.

The people of Texas and Louisiana should always be the most important thing when we think about the impact of Hurricane Harvey. Our thoughts continue to be with all of those affected. From a business and economic view point, gasoline prices continue to rise even as crude oil itself is modestly down.

Nonfarm payrolls increased 156,000 in August, lagging the consensus expected 180,000. Including revisions to June/July, nonfarm payrolls were up 115,000.

Private sector payrolls increased 165,000 in August and revisions to prior months added 10,000. The largest gains were for professional & business services (+40,000, including temps), manufacturing (+36,000), and construction (+28,000). Government fell 9,000.

The chart below is a 10 year chart showing the change in US disposable income, e-commerece and retail sales. Things have recovered strong over the past 10 years. I don't feel that retail is dead, we’ve just changed where we buy our things.