Financial Review

Polls Are Open

…S&P and Nasdaq record highs. Consumer confidence climbs. Housing prices higher. PR death toll climbs to 2975. Trump attacks Google. Primary election day – a review of the hot races

Financial Review by Sinclair Noe for 08-27-2018

DOW + 14 = 26,064
SPX + 0.78 = 2897
NAS + 12 = 8030
RUT +0.02 = 1728
10 Y + .03 = 2.88%
OIL – .34 = 68.53
GOLD – 10.30 = 1201.50


The S&P 500 and the Nasdaq hit new record highs today.


Consumer confidence in the United States climbed to an 18-year high in August. The consumer confidence index jumped to 133.4 from a revised 127.9 in July. It’s the highest level since October 2000 and beats the previous post-recession peak of 130 in February. The only other period in which consumer confidence was higher was during the Dot Com boom of 1997 to 2000. The present situation index, a measure of current conditions, climbed to 172.2 from 166.1. That’s also the highest level since 2000. The future expectations index advanced to 107.6 from 102.4.


The S&P/Case-Shiller national index rose a seasonally adjusted 0.3% and was up 6.2% for the year in June. The 20-city index rose a seasonally adjusted 0.1% and was up 6.3% compared with a year ago. Price-growth is decelerating, prices are not declining. After years of Seattle charting the strongest price growth, Las Vegas led the way in June, followed by Seattle and San Francisco. New York, which has been slammed by recent tax-law changes, was the only metro to chart a monthly decline. For the Phoenix market, June prices climbed 0.7% and for the past 12 months through June prices are up 7.2%.


The death toll in Puerto Rico from Hurricane Maria last year was nearly 3,000, according to a study commissioned by the island’s governor that was released today. The report, by researchers at George Washington University’s Milken Institute School of Public Health, estimated there were 2,975 excess deaths in Puerto Rico stemming from the hurricane from September 2017 through February 2018. The tally far surpasses the official fatality count of 64. Gov. Ricardo Rosselló’s administration said it would await the results of the George Washington University study, which it commissioned in December, to update the official count. Rosselló said at a news conference that he would sign an executive order updating the official death toll to 2,975, with the caveat that the number was an estimate. And he said he took responsibility as the island’s governor for mishandling the fatality-count issue.


In a pair of tweets, Trump said Google search results for news about him showed only “Fake” news reporting and charged that the company is “controlling what we can & cannot see. This is a very serious situation—will be addressed!” Trump didn’t specify how the administration would address the issue. National Economic Council Director Larry Kudlow said the White House was “taking a look” at regulating searches but went no further. A Google spokeswoman said in an emailed statement that the company doesn’t “bias our results toward any political ideology.” Trump expanded his attack to Twitter and Facebook, saying the companies are “treading on very, very troubled territory,” doubling down on charges that they discriminate against conservatives.


Primary polls are open today in Florida, Oklahoma, and Arizona – to a lesser extent. Voters faced problems at Phoenix-area polling places, with several locations opening hours behind schedule this morning because voting machines had not been set up on time. The office of Maricopa County Recorder Adrian Fontes, who unseated the longtime elections chief over the 2016 uproar in the state’s most populous county, said all polling sites were open by 11 a.m., five hours late. A contractor hired to set up voting machines didn’t send enough technicians to get them going on time. Fontes said his office quickly trained and deployed workers once it learned of the issue Monday afternoon. Dozens of people reported showing up to cast a ballot and getting turned away. Fontes made no mention of the troubles during a Facebook Live video he recorded with a voter shortly before polling places opened at 6 a.m. He said in the video that voters could go to their usual polling places or to any of 40 voting centers that anyone can use regardless of where they live. Polls are scheduled to close at 7 PM.  Moneyradio will be broadcasting election updates and results starting at 8 PM and continuing at the top and bottom of the hour, until midnight.


While every race is important, the big races in Arizona are the US Senate race, the governorship, and Congressional districts 1 & 2. Senator Jeff Flake has announced his retirement and a trio of Republicans are battling for the spot, while Representative Kyrsten Sinema appears to be a lock for the Democratic nomination. Sinema has represented a Phoenix-based congressional district since 2013; she faces Deedra Abboud, a Phoenix lawyer and activist making her first bid for office. Rep. Martha McSally is so confident of her Republican primary chances that she’s already airing ads geared toward the general election. The once Trump-skeptical congresswoman has convincingly recast herself as an ally of the president, dropped her support for a version of the DREAM Act and benefited from a $4.1 million spending spree by an establishment-friendly super PAC. Her main competition is Kelli Ward, with former Maricopa County Sheriff Joe Arpaio trailing in third place, in what appears to be his final run at elected office. Polls give Sinema a small lead over McSally, a respectable advantage over Ward and a dominating margin over Arpaio. (Democrats have set up a PAC that has spent almost $1.7 million trying to sabotage McSally in the primary, strongly suggesting that they fear her the most in a general election.)


Arizona’s governor race gets a lot less ink, but the Republican Governors Association is worried enough that it’s spent $9.2 million here already — almost all on ads attacking Democrat David Garcia. Garcia does comfortably lead state Sen. Steve Farley in polls of the Democratic primary, but Farley has slightly outraised and outspent Garcia, so it’s not a done deal yet. Garcia is a strong candidate for Democrats: His 2014 campaign for state superintendent of public instruction was the closest any Arizona Democrat has gotten to winning statewide office since 2006, and his Hispanic heritage may help turn out that crucial segment of the Democratic base. His background as an educator also contrasts favorably with Republican Gov. Doug Ducey, who clashed with striking teachers staging high-profile protests in the Arizona Capitol earlier this year. Ducey himself faces a primary challenge from former Secretary of State Ken Bennett, whom he defeated in the Republican primary four years ago, but Bennett appears to be running a shoestring campaign this time around.


Incumbent Republican Secretary of State Michele Reagan has a well-funded primary challenger, Steve Gaynor. The two have clashed over, among other things, Reagan’s decision to settle a lawsuit that alleged Arizona’s two-track voter registration system unconstitutionally blocks tens of thousands of people from voting. Reagan has also faced criticism for delays in creating a website to track money in political campaigns, and her office’s failure to send publicity pamphlets to about 200,000 households in the May 2017 special election on Proposition 123. The primary winner will face Democratic lawmaker Katie Hobbs in the general election. The Secretary of State is first in line to become governor should something happen to the state’s chief executive.


Retired Air Force officer Wendy Rogers is verging on perennial candidate status at this point,4 but her avowed loyalty to Trump seems to be keeping her in the Republican primary race for Arizona’s Democrat-held 1st District (R+6). Her rivals are state Sen. Steve Smith, who hails from the Freedom Caucus wing of the party, and farmer/attorney Tiffany Shedd. In the Tucson-based 2nd District (R+1) — an open GOP seat thanks to McSally’s Senate run — the national Democratic Party is solidly behind Ann Kirkpatrick, who until 2017 was the U.S. representative from Arizona’s 1st District. Kirkpatrick faces opposition from former state Rep. Matt Heinz, who is running as a full-throated progressive.


Phoenix voters will also weigh in on a series of ballot measures that could change the way the city conducts its elections. There are six city propositions on the ballot. One measure would consolidate the city’s elections with the county. Currently, Phoenix holds its regular elections in August of odd years, with a runoff in November if necessary.  If Prop. 411 passes, the city will combine its elections with the county in November of even years and city races will appear on the same ballot as state and federal races. Runoffs will be held in March of the following year if necessary.


In November, Arizona voters will consider a crowded ballot; how they vote on everything from school vouchers to tax hikes could reverberate nationwide. But it all starts with today’s primary. Of the 43 states with income taxes, Arizona’s are on the lower end and the state has only cut income taxes since the 1990s. Now there is a proposal on the ballot to change that, at least for some of the highest income earners. It’s called The Invest In Education Act. While the proposal had been in the works for at least a year, it was first announced during the #RedForEd teacher walkout. Supporters of the initiative say it would raise $690 million a year by increasing taxes on people who make more than $250,000 a year. Meanwhile, Proposition 305, would kill the law expanding access to education savings accounts, or school vouchers.


And yesterday, a Maricopa County Superior Court judge ruled to allow a clean-energy initiative to go on the November ballot despite a challenge from opponents who argued the initiative did not gather enough legal signatures. The Clean Energy for a Healthy Arizona measure, now called Proposition 127, would require electric companies such as APS and Tucson Electric Power to get half their power from renewable sources like solar and wind by 2030

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