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Equifax, Plus Observations From the Morningstar ETF Conference

The big questions on many people’s minds right now is what to do about the Equifax breach. Sensitive personal information—including Social Security numbers and birthdates—on 143 million consumers was stolen. The situation is still evolving, but Equifax is offering “free credit monitoring and identity theft protection” to all U.S. customers. Signing up for the service (which covers Equifax, but not other credit bureaus) will not waive your right to take legal action. (A class-action lawsuit seems likely.)  Go to the Equifax Security 2017 website for more information about the breach and the monitoring service.

Beyond that, see the guidance I posted to our blog last Friday. Check your crechartdit reports regularly; you can pull up free reports for Equifax, Experian and TransUnion at annualcreditreport.com. You will have to go to Innovis’ website separately. (Until earlier this week, I had never heard of Innovis.) Consider placing a credit freeze with all four credit bureaus. These freezes can create some hassles, however. An alternative step—though not as effective—is to place a fraud alert with the credit bureaus. Use different passwords for each of your financial accounts. A password manager like Dashlane, which I personally use, can help. Finally, check your financial statements regularly and be quick to challenge any suspicious charges.

Were it not for the breach, this week’s commentary would have focused on the Morningstar ETF Conference, which I attended last week along with AAII Computerized Investing editor Jaclyn McClellan. The conference is oriented toward advisers. While there wasn’t necessarily a “theme” I could point to, the subject of factors was brought up in several of the sessions I attended.

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Highlights from this month’s AAII Journal


AAII Sentiment Survey

Optimism jumped to its third-highest level of the year, while pessimism plunged to a 17-month low. More about this week’s results.

This week’s results:
  • Bullish: 41.3%, up 12.0 points
  • Neutral: 36.7%, up 1.8 points
  • Bearish: 22%, down 13.8 points
Historical averages:
  • Bullish: 38.5%
  • Neutral: 31.0%
  • Bearish: 30.5%

Take the Sentiment Survey.


The Week Ahead

My colleague Wayne Thorp will speak to our Sacramento Chapter about how to use our Model Shadow Stock methodology in an actual portfolio. Thorp will also be speaking at our Investor Conference this November.

Six S&P 500 companies are scheduled to report earnings as we get the first glimpses of third-quarter earnings. Those companies are AutoZone Inc. (AZO), Adobe Systems Inc. (ADBE), Lennar Corp. (LEN) and FedEx Corp. (FDX) on Tuesday; General Mills Inc. (GIS) on Wednesday; and CarMax Inc. (KMX) on Friday.

The Federal Open Market Committee (FOMC) will hold a two-day meeting starting on Tuesday. Interest rates are expected to be left unchanged. The CBOE’s FedWatch tool also shows the futures markets pricing in a 51.3% chance of rates staying unchanged for the remainder of this year. Those odds may, or may not, change following Federal Reserve Chair Janet Yellen’s quarterly press conference on Wednesday. The meeting statement and updated committee member forecasts will be released at 2:00 p.m. ET Wednesday, and the press conference will start at 2:30 p.m.

Elsewhere on the economic calendar, the September housing market index will be released on Monday. Tuesday will feature August housing starts and import and export prices. On Wednesday, August existing home sales will be released. The September Philadelphia Federal Reserve Business Outlook Survey will be released on Thursday. Ending the week, the September Purchasing Managers’ Index (PMI) flash will be released on Friday.

Three Federal Reserve officials will make public appearances: San Francisco president John Williams, Kansas City president Esther George and Dallas president Robert Kaplan will speak on Friday.

The Treasury Department will auction $11 billion of 10-year Treasury inflation-indexed securities (TIPS) on Thursday.


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