Markets Rise Anticipating Rates Cuts and China Deal…

Markets on the Rise! 

With US Treasury rates continuing to stay low, I think it’s in the bank that the Federal Reserve will continue to slash interest rates, which certainly makes stocks more attractive.  One of the negatives, is that I’ve already seen my American Express High Yield Savings Account reduce the rate from 2.0% to 1.9%… and I anticipate this will continue.

Last Friday’s job report saying we added just 130,000 jobs in August reflects some weakness, which gives the Federal Reserve more ammunition to reduce rates.  I’m anticipating 2 more rate cuts by year end, UNLESS we get a China deal.

The story of our market continues; negative data about the trade deal brings the market down temporarily, then Trump tweets suggesting negotiations are moving forward, and the market responds moving higher.  The opinions of whether or not we get a trade deal prior to the election are all of over the place and no more than pure speculation.

So what’s the real deal with the economy?  GDP is very positive so far in 2019… however our manufacturing sector last week showed contraction for the first time in a while.  This is reflective of the hesitation of Corporate America to expand and spend money because of trade uncertainties.  If we do get a trade deal, I would anticipate this will reverse almost immediately and that would assist in driving our expansion longer.  Our service sector continues to expand, reflecting our low unemployment rate and rising wages.  Millennials would much rather spend money going out to dinner and other services than buying homes.  If that changes, we could really seethe economy move forward.  Perhaps Trump can tweet the Millennials into buying homes!!!!

Markets Last Week

All equity boats moved higher last week with the S&P 500 rising 1.83%, the Dow 1.53%, the Russell 2000 .71% and the Nasdaq Composite moving up 1.76%.

Over the pond, equities were strong with the developed market EAFE rising 2.23% and the Emerging Market Index rising 2.44%.

Bond yields in the US were little changed with the 10 year Treasury finishing the week with a yield of 1.55%.  I still shake my head with the level of rates and the fact we are hearing that US rates may end of negative like many other parts of the world.  Will this happen?  As always, time will tell!

 

US Battleship New Jersey 


This weekend I had the pleasure to visit the Battleship New Jersey on the Camden waterfront.

 

I was accompanied by my daughter, Vanessa, my assistant Ellen and her boyfriend Mike.  When you first approach the ship, it’s breathtaking.  I immediately wondered, how many years did it take to build it?  The tour of the ship is really awesome as you can pretty much go anywhere on the ship.  From weaponry to the many historical displays, the 45,000-ton Vessel is an eye opener and a reminder of the history of our country.

I walked away with an appreciation and a proud feeling about the history of the ship and our country.

 

Question of the Week…

How many times does our Federal Reserve meet during the course of the year to decide on interest rates policies?

  1. 8 times
  2. 6 times
  3. 12 times
  4. 4 times

Answer to last week’s question…!

Which of the following is not a Medicare Enrollment period that lets you enroll in Medicare for the very first time?

  1. The Initial Enrollment Period
  2. The Special Enrollment Period
  3. The Open Enrollment Period
  4. The General Enrollment Period

The correct answer is #3 — The Open Enrollment Period.  This period runs annually between October 15th and December 7th.  A Medicare Beneficiary can switch Drug plans, Medicare Advantage plans to another and more, however this is not a first time enrollment period.

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