Market Commentary

October 7, 2019

From trade wars to impeachment inquiries, investors had a lot to ponder during the third quarter. Toward the end of September, they appeared to become more cautious, although it’s difficult to say which issues weighed most heavily. Here are a few questions they may have been asking:

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September 30, 2019

They say bull markets climb a wall of worry.

Investopedia’s Will Kenton explained the idea like this:


“…a bull market isn’t a peaceful place. When times are good, investors are constantly tense, wondering how long they will keep rolling, fretting about when a seemingly inevitable correction will finally put a stop to the market elation. As a market continues ascending, the decision can become increasingly agonizing whether to take profits in a position or let it ride.”

Last week, the wall of worry gained a few feet.


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September 23, 2019

There’s a new theory in town.


Renowned economist Robert Shiller’s new book suggests investors may be able to predict and prepare for economic events by tracking popular stories.


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September 16, 2019

Where’s inflation?


If you enjoy searching for Waldo, the visual nemesis in a red-striped sweater and cap, you may appreciate the quandary of central bankers in many wealthy nations. For almost a decade, they’ve been they’ve been trying to find inflation.


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September 9, 2019

Remember the movie Groundhog Day?


Bill Murray’s character is a crotchety newsman who lives the same day over and over again. After exhausting other options, he chooses self-improvement and eventually escapes the cycle.

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September 3, 2019

What, me worry?


About this time last year, Time Magazine reported on anxiety in America. Almost 40 percent of Americans reported being more anxious than they were the previous year.

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August 26, 2019

Have you ever watched a lake in a thunderstorm?


Heavy rain pummels the surface. Dark clouds drop the sky closer to the water. Gusty winds crash waves ashore. Up top, on land, damage may occur. Underneath, in the deeper water, things often remain pretty much the same.


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August 20, 2019

Don’t let volatility get you down.


Last week was the 40th anniversary of BusinessWeek’s infamous cover headline: ‘The Death of Equities: How inflation is destroying the stock market.’ The publication’s current iteration, Bloomberg Businessweek, reported it is still getting grief over the headline and subsequent bull market. In its defense, stocks trended lower for about three years after the magazine hit newsstands.

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August 12, 2019

Global selloff. Quick comeback.


Investors boomeranged from stocks to safe havens and back as trade tensions between the United States and China intensified last week. The Economist reported:

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August 5, 2019

Tariffs strike again.


The Federal Open Market Committee completed what it called ‘a mid-cycle adjustment’ with a quarter-point rate cut last week. Some investors were unhappy when Fed officials implied there would not be another reduction this year. They’d been hoping for at least one, reported Barron’s.


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July 29, 2019

It has been said there are two sides to every story. Just look at world financial markets. Stock markets and bond markets are telling very different stories.1

 

In the United States, stock markets were blue ribbon winners last week.

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July 22, 2019

Did last week mark the start of a new policy for the Federal Reserve?

 

The U.S. Federal Reserve has a reputation for providing little transparency about the timing and direction of potential rate changes. That reputation was challenged last week.1

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July 15, 2019

The bulls are running.

 

Last week, the Standard & Poor’s 500 Index set a new record, closing above 3,000 for the first time. Other major U.S. stock indices also finished at record highs, reported Barron’s.1

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July 8, 2019

What will the Federal Reserve do now?


There was unexpected economic news last week. On Friday, 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.


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July 1, 2019

In the infamous words of Mortimer Snerd, “Who’d a thunk it?”


After U.S. stocks dropped sharply during the last weeks of December 2018, investors were not optimistic about the future. Early in January 2019, the State Street Investor Confidence Index dropped to its lowest point since 2012, and the American Association of Individual Investors (AAII) Sentiment Survey showed just about 31.6 percent of investors as bullish. The long-term average for bullishness is 38.2 percent.

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June 24, 2019

Everything went up – and that’s unusual.

 

Randall Forsyth of Barron’s explained, “Like our major political parties, the stock and bond markets seem to live in two different worlds these days. The former sits at record levels, suggesting we live in the best of all possible worlds. The latter sees things as bad and only getting worse.”1

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June 17, 2019

Are we on the cusp of change?

 

The United States is doing quite well. Randall Forsyth of Barron’s reported:1

 

“…the U.S. economy and stock market both seem to be doing better than OK, thank you, as the expansion and bull market celebrate their 10th anniversaries. Unemployment is around the lowest level in a half-century. The worst thing seems to be that inflation continues to run slightly below the Fed’s 2 percent target, a problem that might strike some as similar to being too rich or too thin.”

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June 10, 2019

Surprise! It was a great week for markets.


Since the U.S.-China trade conflict resumed in early May, investors have been off balance. The possibility of escalating tariffs on Mexico heightened economic uncertainty. Then, last week’s unemployment report arrived with less than stellar news – just 75,000 jobs were created in May. The number was well below expectations. The Bureau of Labor Statistics revised March and April employment numbers downward, too.

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June 3, 2019

Tariff trouble.

 

Just two weeks ago, the U.S. government lifted tariffs on Mexico and Canada. So, it was a surprise last week when President Trump tweeted the United States would impose an escalating tariff on all goods imported from Mexico until the flow of migrants to the United States’ southern border stops.1, 2

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May 28, 2019

U.S. stocks have had a great run.


During the past decade, the profitability of U.S. companies increased rapidly. Strong corporate earnings helped the U.S. stock market outperform markets in other nations by a significant margin. According to Capital Economics, “Since the start of this decade, the average annual return from the MSCI USA index of mid- and large-capitalization U.S. equities, which closely tracks the S&P 500, has been roughly 13 percent. This compares to only 7 percent from the MSCI World ex USA index of comparably-sized equities in 22 other developed economies.” Performance was measured in local currency.

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May 20, 2019

Trade war trade-off.


There was some good news on trade, last week. The United States took steps to reduce trade friction with the European Union, Canada, Mexico, and Japan.

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May 13, 2019

Trade talk trouble took a toll last week.


Major U.S. stock indices moved lower when trade talks between the United States and China broke down. The Standard & Poor’s (S&P) 500 Index, Nasdaq Composite, and Dow Jones Industrial Index all finished the week down between 2 percent and 3 percent, reported Ben Levisohn of Barron’s.

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May 6, 2019

The Standard & Poor’s 500 Index is off to its best start in 20 years.1

 

Despite the exceptional performance of U.S. stock markets year-to-date, and data that suggest economic growth remains steady, some analysts and investors have been pecking at Federal Reserve Chair Jerome Powell. They’re keen for the Fed to implement a rate cut, which could stimulate economic growth and help push stock markets higher, because inflation is lower than ideal, reported Howard Schneider and Ann Saphir of Reuters.2

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April 29, 2019

It wasn’t an ‘Avengers End Game’ spoiler, but there was big news last week.

 

Economic growth in the United States was strong during the first quarter. The Bureau Of Economic Analysis (BEA) announced gross domestic product (GDP), which is the value of all goods and services produced in the United States, increased by 3.2 percent.1

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April 22, 2019

And the answer is…

 

A Jeopardy! contestant captured the nation’s attention last week by setting multiple records for the most money earned in a single episode. The Standard & Poor’s 500 Index has been setting some records, too.1, 2

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April 15, 2019

Investors took an intermission.

 

The curtain appeared to close on the first act of 2019 last week – and what an impressive act it was. The Standard & Poor’s 500 Index delivered some dramatic returns and is less than 1 percent away from a new all-time high.1

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April 8, 2019

The first quarter of 2019 brought a welcome reversal.

 

Last year, Barron’s published a group of market strategists’ expectations for 2019 performance. The article came out in mid-December, before the steep year-end stock market decline. At that time, all of the strategists agreed: The S&P 500 Index would move higher during 2019.1

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April 1, 2019

“Fascinatingly counterintuitive…”

 

That’s how Michael Arone, an investment strategist, described the U.S. market environment to Avi Salzman of Barron’s:1

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