A Couple Interesting Market Stats

There have been a couple interesting developments since my last commentary from even a couple days ago. Most important of which is that the Federal Reserve openly acknowledged the slowing growth I warned about previously herehereherehereherehere, and here.

In response, the Federal Reserve announced they do not expect to raise interest rates again in 2019 and will end their balance sheet tapering in September. Therefore, the balance sheet will stand at about $3.5 trillion once the Fed is done. That’s about 4x larger than it was on the eve of the Great Recession of 2008! Continue reading “A Couple Interesting Market Stats”

QUICK NOTE: Fourth Best Start to a Year Ever and FOMC Confirms Slower Growth

“Thru 55 trading days, 2019 is now the 4th best start to any year ever on [the S&P 500 Index].” – @OddStats

Here’s a list of those four best years, the return through day 55 and the return from that point forward for the rest of the year.

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Also, yesterday the Federal Reserve essentially announced they are aborting quantitative tightening (interest rate hikes and balance sheet reduction) due to concerns of slowing growth as I also mentioned yesterday.

FedEx’s Warning, Slowing Growth and Valuations

Yesterday afternoon, FedEx reported disappointing global revenue and earnings. This is important because package delivery tends to be closely correlated with the strength (or weakness) of the economy.

But not only did they report weaker-than-expected results, FedEx also issued an overt warning about the global economy. Specifically, FedEx’s chief financial officer stated, Slowing international macroeconomic conditions and weaker global trade growth trends continue, as seen in the year-over-year decline in our FedEx Express international revenue.” [emphasis mine] Continue reading “FedEx’s Warning, Slowing Growth and Valuations”

Every Time This Has Happened Over the Last 50 Years A Recession Followed

Danielle DiMartino Booth, a former Federal Reserve insider, recently wrote a great article for Bloomberg. In it she provides a couple informative stats involving the relationship between unemployment rate changes and recessions.

First, she points out, “According to historic payroll data and the National Bureau of Economic Research, every time the three-month average unemployment rate exceeded its six-month average at cycle peaks over the past 50 years — like it did in January — the U.S. economy has experienced a recession.” Continue reading “Every Time This Has Happened Over the Last 50 Years A Recession Followed”

Bull Case and Bear Case for Investing in Treasury Bonds Right Now

Today, I wanted to provide two opposing views of the merits of investing in U.S. Treasuries in today’s environment.

Whenever I make investment decisions for clients, I always try to consider arguments both in favor and against the investment. It’s important to understand both sides of any issue and do our best to remove our own personal biases and emotions from the decision. In this particular case, with regards to U.S. Treasuries, both sides of the argument contain valid points causing stark disagreement among even the most respected managers and pundits. Continue reading “Bull Case and Bear Case for Investing in Treasury Bonds Right Now”