After a couple days of market rebounds, stocks traded fairly flat for most of the day and then traded off at the end as investors continue to try to figure out where the markets are going next. Many are looking to the Fed to see what the central bank will do with interest rates, especially after Trump tweeted he wants a 1% cut in order to continue to stimulate growth with the ease of capital. Boston Fed President, Eric Rosengren, voted against the last rate hike and believes that lowering interest rates could cause a greater recession when it comes because people and corporations will be overextended with debt as a result of cheap borrowing costs. It seems likely that the Fed will lower rates again in September, and we’ll continue to see what this means for the markets and the economy. The Dow finished down 173 points and closed at 25,962.
Home Depot’s stock jumped up about 4% after reporting mixed earnings results. While they missed on sales and anticipated slightly lower sales ahead, they exceeded expectations on profits and analysts felt that was good as it sets them up to be financially healthy going forward and should there actually be a slowdown. While sales weren’t as high as expected, they were still up relative to last year, which is actually pretty good considering the recent deflationary prices in lumber. Home Depot grew sales 3% while lumber prices have been down 16%.
On the heels of the GE accounting report, Yahoo Finance had an article stating that long term care insurance is a product most insurers are finding extremely painful. LTC has been a product that has been poorly priced for quite some time and increasing health care costs continue to make it difficult to project. According to the National Association of Insurance Commissioners, premiums are becoming so cost prohibitive for people that the number of policies has declined from 372,000 to 70,000 in the last 15 years. During this same time, the number of insurance companies offering these products has declined from about a 100 to less than 15.
Scouts did some trotti biking the other day in Adelboden. Not really sure what that is, but there are pictures on the Faceplant page!