Message from Jon
The FED has cut rates another 25 points, giving the investment arena an accommodative nod offering more confidence to the late Oct rally.1 While the US seems to be confident of a year-end development to a trade war resolution, China has expressed a lower level of optimism toward a trade war agreement by year's end.2 My opinion is that we will see more posturing by both sides but no real traction until after the election.
Markets are at highs, and companies continue to offer earnings beats followed by low earnings forecasts, sending mixed signals and a gloomy, questionable outlook for the near term. We have been here for several earnings forecasts now-and this should not be much of a surprise here.3 In my opinion, we have not seen signs of an impending recession surface yet, because the consumer has not yet been affected by negative circumstances. They are still employed; they still see help wanted signs everywhere; and they are not losing money on your house values. They still can afford to go to the mall, eat out, and take vacations, and until those feelings become endangered, we will continue to see this market hang around. Seeing how the consumer makes up over 60% of our GDP-manufacturing, housing, transports and the like take a back seat to jobs, pay rates, and hours worked-the latter are seemingly more important at the moment.4
We are seeing our indications we follow holding steady with very little movement and are not really expected to make much change unless we see the trade war tariffs increase in December as they are scheduled to do, or we see more deterioration in the material economic data that continues to be reported weekly and monthly.
Till we speak again,
More Historic Highs
WEEKLY UPDATE - NOVEMBER 4, 2019
The Week on Wall Street
A better-than-forecast jobs report prompted a stock market rally Friday, two days after traders witnessed another interest rate cut by the Federal Reserve.
Both the S&P 500 and Nasdaq Composite ended the week at historic peaks, while the Dow Jones Industrial Average settled less than 12 points under its all-time record close. The Nasdaq rose 1.74% for the week; the S&P gained 1.47%. The Dow added 1.44%. MSCI's EAFE benchmark, which measures developed stock market performance outside the U.S. and Canada, improved 0.58%.
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