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Looks like the Federal Reserve will lower interest rates. They may have been influenced by unexpected economic news recently. The Bureau of Labor Statistics announced 224,000 new jobs were added in June, which was more than analysts had anticipated. The gains were offset a bit by reductions in April and May employment estimates. However, overall the pace of jobs growth during second quarter was fairly consistent with jobs growth during the first quarter, reported Matthew Klein of Barron’s.

Strong employment numbers invigorated some investors. As a result, the Standard & Poor’s 500 Index and the Dow Jones Industrial Average surpassed record highs. To provide you significant historical perspective note that the S&P 500 was up +18.5% YTD (total return) through June 30, 2019. This was the index’s best performance at the half-way point of the years since 1997 (22 years ago) when the stock index was up +20.6% YTD (total return) as of June 30th. Pretty impressive.

However, the performance of the bond market continued to indicate that some investors are worried about the possibility of recession. The yield curve remained inverted last week with the 10-year Treasury note trading at lower yields than 3-month Treasury bills. Yield curve inversions have sometimes in the past been an accurate predictor of an upcoming recession, reported Ben Levisohn of Barron’s.

Time may provide greater clarity about the strength of the American economy. April Joyner of Reuters reported,

“It will likely take several months of economic data – along with results from the corporate earnings season later this month – to clarify the picture, investors say. In contrast to Friday’s upbeat employment report, data earlier this week showed U.S. manufacturing and service activity in June declined to multi-year lows… Future data…may end up either confirming recession fears or altogether dashing the hopes for interest-rate cuts that have buoyed stocks.”

In its July meeting, the Federal Reserve has been examining economic data and to decide whether to lower rates. Investors have been anticipating a rate cut, reported Greg Robb of MarketWatch. If it doesn’t happen, stock markets could be a bit volatile.

 

And speaking of those things with meaningful economic impact, a lot has been written about Americans and smartphones – the crowd favorite among mobile devices. Mobile devices capable of digital persuasion. Eighty-five percent of U.S. participants in the 2018 Deloitte Global Mobile Survey owned smartphones and checked their phones about 14 billion times a day. Which amounts to approximately 52 times each. If you figure Americans are awake about 960 minutes each day, they check their phones every 18 minutes.

Almost three-in-ten Americans say that what they see on social media influences their decisions to buy or not buy. The percent rises to five-in-ten for millennials, according to the UPS Pulse of the Online Shopper Survey™. It is little wonder social media influencers have become a staple of digital marketing.

What are influencers? The Influencer Marketing Hub describes an influencer like this:

“An influencer is an individual who has the power to affect purchase decisions of others because of his/her authority, knowledge, position or relationship with his/her audience.”

Influencing has become a bona fide career path, a job which has its own set of Federal Trade Commission guidelines. For example, truth in advertising requires influencers to indicate when they’ve being paid to promote a product and also when they’ve received the product for free. Consumers should see the letters #ad before a comment or tweet when the influencer is promoting a brand or product. Consider that 70% of the economic activity in the U.S. comes from influenced consumers. So, whether you’ve heard of them or not, they can have great impact.

Visit us at www.williamsfa.com. Tommy Williams is a CERTIFIED FINANCIAL PLANNER™ Professional with Williams Financial Advisors, LLC. Securities offered through Private Client Services, Member FINRA/SIPC. Advisory Services offered through RFG Advisory, a Registered Investment Advisor. Williams Financial Advisors, LLC, RFG Advisory and Carson Group Coaching are separate entities from Private Client Services. Branch office is located at 6425 Youree Drive, Suite 180, Shreveport, LA 71105.

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