May Economic Update from SWM


May Newsletter




Dear Visitor,

I hope this economic update finds you well and in good spirits, preparing for Summer and stocking up on sunscreen.  After a long winter of hibernation, its time to relax and spend some quality time with the family.  Planning for vacation is probably on everyone's mind but you cannot neglect your investments during these months, especially when the market is volatile as it has been. At anytime, please feel free to contact me with any questions or concerns.  If I do not know the answer, i will utilize my resources and find the answer for you.   


 Referral Program


Sumner Wealth Management (SWM) would like to say “thank you” for the many referrals we have received over this last year. Your generosity has been instrumental in our amazing growth. After speaking with several of our clients, we have decided to establish a Referral Incentive Program and give back to you. Over the next six months we will be giving out $100 each month in gift cards.


Qualifying is easy. Simply refer your friends and family members who could benefit from the exceptional service and advice we provide. With your permission and the individual you’re referring, we will contact them to discuss their current financial situation. That’s it!


We realize referring a friend or family member can be difficult as we are naturally protective of those we care about. Rest assured we take the utmost care of any referral we receive regardless of whether they choose to do business with us. That’s our promise.

Register on our website and submit the individuals name you are referring along with their telephone number and email address.



Stock & Bond Markets Move Higher           

Both stock and bond markets moved higher this week, as investors received a bit of both expected and unexpected news, in the form of global economic and geopolitical events.


Index Returns (%) 

Source:  Bloomberg


 1 Week


1 Year

Dow Jones 30




S&P 500




Russell 2000








S&P GS Commodities




U.S. Trade-Weighted $





Index Levels

Source:  Bloomberg


 Current Week (5/2/14)

Prior Week (4/25/14)

Year End (12/31/12)

Year Ago


Dow Jones 30





S&P 500





Russell 2000










S&P GS Commodities





U.S. Trade-Weighted $





U.S. 10Yr Treasury Yield(%)






The Fed & Economic Reports          

As expected, the Federal Reserve ("Fed") tapered its bond buying program by another $10B this week, down to $45B per month. After its last meeting in March, the Fed had severed the perceived direct link between monetary policy and the path of the unemployment rate by indicating it would consider a broader array of indicators, including labor market conditions, inflation and financial conditions. It was a good thing the Fed communicated this change in guidance, given the major domestic economic reports released this week. While the Institute of Supply Management (ISM) Manufacturing report for April rose to 54.9 from March's 53.7, the real surprise was the employment growth, as reflected in the Non-Farm Payrolls report for April. Employment grew by 288,000 (well above consensus expectations of 218,000), the prior two months were revised higher by 36,000. In addition, the unemployment rate plunged from 6.7 percent to 6.3 percent, reflecting a drop in the participation rate to its lowest level in 35 years. This drop in participation may have been reflective of a large number (approximately 1.35 million) of unemployed Americans who lost emergency extended unemployment benefits after Congress allowed the program to expire at the end of 2013.


Unexpected News of the Week            

Given the strength in the headline job numbers, the fact that there was no increase in average hourly earnings was somewhat unexpected. Perhaps it was this lack of wage inflation (labor costs have been creeping higher), or, more likely, reports of increased hostility in Odessa, Ukraine. Irrespective, traditional bonds caught a bid during the week, with the yield on the U.S. 10-Year Treasury Note ending the week at 2.59 percent.


A Check on Oversees Monetary Policies          

In stark contrast to the Fed's tapering, the European Central Bank (ECB) might announce some type of unconventional monetary policy at its monthly meeting next week. Whether it be an asset purchase program of its own (think ECB version of the Fed's quantitative easing), or setting a negative rate on bank deposits held at the ECB, ECB President Mario Draghi has provided markets with plenty of notice that the ECB is quite prepared to deal with the risks of a too-prolonged period of low inflation (Eurozone inflation is currently at 0.5 percent). Similar to the ECB, at its end of April meeting the Bank of Japan (BoJ) Governor Haruhiko Kuroda reiterated that, should the economy be negatively impacted by a recent sales tax increase, the BoJ would expand its stimulus. Tracking BoJ activities will be key for the Asia-Pacific region. For example, while Governor Kuroda believes the BoJ is on track to meet its inflation target of two percent in two years, the most recent report on Japanese manufacturing saw a deterioration in business conditions.


Equity Market Rotation           

Given these cross currents, it is perhaps not surprising that equity markets are also undergoing some rotation. While the large cap S&P 500 is very close to its all time high, the NASDAQ and Russell 2000 remain several percent off their recent highs. Certainly dividend-paying stocks have received more attention of late. After lagging the S&P 500 by approximately nine percent last year, so far in 2014 Morningstar's Dividend Leaders Index is more than four percent ahead of the S&P 500. We continue to advocate maintaining a balanced perspective, as markets work their way through this period of consolidation.




Thank You,


Mark Sumner

Financial Advisor


Sumner Wealth Management, Inc.              
517 Alcove Road                                           
Suite 202                      
Mooresville, NC  28117

(704) 660-5510 Ext. 401      



Services Offered:

  • Business & Personal Financial Planning
  • Business Continuation Strategies
  • Retirement Plan Consulting & Design (401k)
  • Investment Programs
  • Tax & Estate Planning Strategies
  • Life, Health, Disability, and Long-Term Care Insurance
  • Medicare Supplement Plans


Contact Information

(704) 660.5510 x401




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Sumner Wealth Management,Inc. | 517 Alcove Road | Suite 202 | Mooresville | NC | 28117

(704) 660.5510 x401 | |

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