Weekly Update – May 21, 2018
Major domestic indexes went down last week after all three gained more than 2% the previous week. The S&P 500 dropped 0.54%, the Dow gave back 0.47%, and the NASDAQ lost 0.66%. International stocks also stumbled; the MSCI EAFE decreased by 0.61%.
Two familiar topics were on many investors’ minds last week: trade and treasuries. Here is a recap of the key details and their market impacts.
1. U.S. and China Resumed Trade Talks
Background: Tension between the world’s 2 largest economies continued last week as the U.S. and China launched another round of trade discussions. Both countries have threatened billions of dollars of tariffs on the other’s products, but so far, neither has acted. 
On Saturday, May 19, the countries released a joint statement saying they would take measures to “substantially reduce the United States’ trade deficit in goods with China.” The Chinese state media called the agreement a “win-win.” Then on Sunday, May 20, U.S. Treasury Secretary Steven Mnuchin announced that they had “put the tariffs on hold.”  The weekend’s developments imply both countries will continue working to close the trade deficit by increasing China’s imports of U.S. agricultural commodities and energy. 
Market Impact: As the trade talks unfolded on Thursday and Friday, investors received very little information. This uncertainty affected investor sentiment and contributed to stocks ending lower on Friday.  Now that the countries have shared some details about the negotiations, we will focus on how investors digest the news in next week’s trading. Mnuchin’s assertion that the trade war is on hold for now should be welcome news for investors. 
2. U.S. Treasury Yields Spiked
Background: The 10-year Treasury yield closed at 3% or higher every day last week. Early Friday, it reached its highest point in almost 7 years as data continued to demonstrate the labor market’s strength. We learned last week that the number of people receiving jobless benefits is at its lowest since 1973. Unemployment is also currently at an almost 17-year low. The numbers suggest the economy is likely reaching full employment.
- ¾ cup whole milk
- 1¼-ounce package of active dry yeast (2¼ teaspoons)
- ¼ cup granulated sugar
- 2 large eggs
- 2 tablespoons unsalted butter, at room temperature, cut into small pieces
- 1 teaspoon kosher salt
- 1 teaspoon lemon zest
- 3 cups all-purpose flour, plus more for work surface
- 2 quarts (64 ounces) canola oil, plus more for greasing
- 1 cup confectioners’ sugar
- 2 cups raspberry or strawberry jam
- Microwave the milk in a small bowl until it is 100°-110°F (warm to the touch). Stir yeast and sugar into the bowl. Set it aside for about 5 minutes until it is frothy.
- Pour the mixture into a large bowl with an electric stand mixer. Mix eggs and beat gently by hand. Mix in butter and salt. It’s OK for lumps of butter to remain in the mix.
- Stir in lemon zest and half of the flour to form dough. Slowly pour in the rest of the flour. Use an electric mixer with a dough hook. Knead the mix on the lowest speed for 5 minutes. Dough will remain sticky.
- Put the mix in a lightly oiled large bowl. Cover the bowl with a damp towel. Set the mix aside at room temperature to allow it to double in size, 1-1½ hours, or overnight in the refrigerator.
- Turn dough on lightly floured work surface. Sprinkle flour on top. Roll and press until mix is ½-inch thick. Use floured 2½-inch round cutter to cut out dough and place on lightly oiled large baking sheet.
- Collect scraps and form a ball. Repeat the process of rolling and cutting. Cover with a damp towel and let rise until it is puffed, 30 minutes.
- At the same time, put a cooling rack over another baking sheet. Heat the oil in a large, deep saucepan to 350°F with deep-fry thermometer.
- Carefully place 3-4 donuts at a time in hot oil, cooking until the donuts are golden brown, about 1 minute per side.
- Using a large, slotted spoon, move donuts to cooking rack to cool. Put donuts in a bowl with confectioners’ sugar to coat.
- Fill piping bag with jam. The bag should be fitted with ½-inch round tip. Cut a narrow slit in the donuts for filling with jelly. Fill donuts.
Recipe adapted from Good Housekeeping
Should I Slow Down My Swing Speed?
It’s the beginner’s quandary: a powerful, lightning-fast swing will send the ball farther down the fairway and closer to the green, right? Probably not. While there are exceptions to the rule, those 100 mph swings usually send the ball to another fairway, to the rough, or dribbling 10 feet in front of the tee. Except maybe on a PGA Tour.
While the notion is counterintuitive, those slow, focused swings generally produce the best results.
Here is what the top golfers and coaches think about golf swing speeds:
- Golf legend Jack Nicklaus creates a mental image of his hands and arms moving in slow motion during his swing.
- Instructor Butch Harmon says golfers will make better ball contact with controlled swings and a full shoulder turn. He adds that players should concentrate on restricting their speed to 75% of their capability.
- PGA winner Nick Price says golfers should focus on developing a fluid swing and completing their backswings.
- On the other side of the slow-swing school, golf legend Arnold Palmer said players shouldn’t apply the swing brakes too hard.
Tip adapted from Golfweek
How Can You Lower Your Risk of Falling?
- Discuss with your doctor ways to prevent falling.
- Perform exercises that improve your balance and strengthen your legs.
- Review your medications with your doctor or pharmacist. (Some drugs can cause dizziness or sleepiness.)
- Get an eye exam every 1-2 years.
- Install safety features in your home, such as bathroom grab bars and stair railings.
Material adapted from Office of Disease Prevention and Health Promotion 
How to Make Your Indoor Air Fresh
You think you’re safe from outdoor pollutants and toxins? Think again. In fact, according to the U.S. Environmental Protection Agency, indoors at your home is 2-5 times more polluted than outdoors.
- Circulate: When possible, open your windows.
- Go natural: Try carpet made from wool or cotton rather than synthetic fibers. Buy cabinets made from solid wood with water-based varnishes.
- Don’t use air freshener: Spraying masks odors. Find and eliminate the source of bad smells.
- No smoking inside: Tell smokers to take their habits outside. It’s not impolite or unreasonable.
- Get plants: One good houseplant can clean 100 square feet of space. Pothos and spider plants are excellent at keeping your air fresh and oxygen heavy.
Tip adapted from EarthShare[ 17]
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