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The Northern Star Newsletter 9/12/19 - Dow, Nasdaq, S&P 500 Advance

4

Message from Jon


Market Update

Well, now that awful August is behind us, the markets have seemingly settled down a bit and reclaimed some of their losses-but for how long, is anyone's guess. We have mixed data that makes for some challenging decisions at present.

We have our technical data from Stormguard indicating a bearish measurement while our Dorsey/wright information is weaker than it was in July, but it's still in favor of domestic equities and international positions.1,2 We have the US and China indicating a renewed desire to return to the table and negotiate a deal, while a stalemate is unfolding with Brexit.3,4

We have a recession setting in within the manufacturing sector and a weakening NFIB monthly report (although it's still quite high) that shows the confidence & optimism of Small Business Owners.5 In my opinion, although this ugliness persists, the US consumer has shown resilience, which is in large part the reason for the current relief rally(s) we have experienced 3 times this year alone (January off the lows of December, June off the lows of May and now September off the lows of August).

Caution:

Don't fall prey to your emotions and allow the noise and uncertainty to get the upper hand. We have been here before. Stay in the present and be patient. The long-term is just that...long-term.

Recession:

In my opinion, we are not near a recession yet. We will see other signs along the way that will forecast the coming recession. 2020 brings the election year and with that, more uncertainty, but historically, it's been a positive year...so be patient and realize that we are experiencing normal market behavior in a secular bear market condition, and yes, I did say secular bear market condition.6,7

Till we speak again...Go Irish and Boiler-Up! 

Jon

 

Sources:

  1. https://alphadroid.com/MyPages/StrategiesAG2.aspx
  2. https://business.nasdaq.com/intel/dorsey-wright/disclosures-tou.html
  3. https://www.ft.com/content/2da4da9a-cf80-11e9-99a4-b5ded7a7fe3f
  4. https://www.ft.com/content/75f7a066-ce72-11e9-99a4-b5ded7a7fe3f
  5. https://www.marketwatch.com/story/nfib-small-business-optimism-index-falls-in-august-to-a-five-month-low-2019-09-10
  6. https://www.barrons.com/articles/midterm-election-stocks-1538086186
  7. https://www.crestmontresearch.com/stock-market/


Dow, Nasdaq, S&P 500 Advance

WEEKLY UPDATE - SEPTEMBER 9, 2019


The Week on Wall Street
Stocks rose last week, with help from two developments: the announcement of further U.S.-China trade talks as well as August hiring and manufacturing numbers that seemed to bolster the argument for a rate cut by the Federal Reserve.


The broad U.S. equity market, as represented by the S&P 500, added 1.79% during a 4-day trading week. The Dow Jones Industrial Average improved 1.49%; the Nasdaq Composite, 1.76%. Foreign shares tracked by the MSCI EAFE index gained 1.69%.[1][2][3]

Trade Talks Poised to Restart
Trade representatives from the U.S. and China are planning to head back to the negotiating table early next month. This news came Thursday from China's ministry of commerce, which confirmed a verbal agreement among Secretary of the Treasury Steven Mnuchin, U.S. Trade Representative Robert Lighthizer, and Chinese Vice Premier Liu He. 

Formal trade discussions between the U.S. and China last happened in July. China has said that it wants punitive U.S. tariffs on its products removed in the event of a deal.[4]

Weaker Hiring & Manufacturing Data
Payrolls expanded with just 130,000 net new jobs in August, according to the Department of Labor; 25,000 were temp jobs linked to the federal government's 2020 Census. The main jobless rate stayed at 3.7%. The U-6 rate, which measures both unemployment and underemployment, rose 0.2% to 7.2%.

A key gauge of U.S. factory activity, the Institute for Supply Management's manufacturing purchasing manager index, fell to 49.1 in August. A number below 50 indicates factory sector contraction. Some investors took these hiring and manufacturing reports as hints of a slowing economy, one which the Federal Reserve could potentially try to stimulate with an interest rate cut.[5][6]

What's Ahead
August inflation data arrives this week, and if looks especially mild, it may amount to another suggestion that the Fed should ease. The European Central Bank concludes a meeting on Thursday, and Fed officials will certainly pay attention to its latest policy statement.[7]

THE WEEK AHEAD: KEY ECONOMIC DATA
Thursday: A new Consumer Price Index, tracking both monthly and yearly inflation.
Friday: The August retail sales report from the Census Bureau.

Source: Econoday / MarketWatch Calendar, September 6, 2019
The Econoday and MarketWatch economic calendars list upcoming U.S. economic data releases (including key economic indicators), Federal Reserve policy meetings, and speaking engagements of Federal Reserve officials. The content is developed from sources believed to be providing accurate information. The forecasts or forward-looking statements are based on assumptions and may not materialize. The forecasts also are subject to revision.

THE WEEK AHEAD: COMPANIES REPORTING EARNINGS
Thursday: Broadcom (AVGO), Kroger (KR)

Source: Zacks, September 6, 2019
Companies mentioned are for informational purposes only. It should not be considered a solicitation for the purchase or sale of the securities. Any investment should be consistent with your objectives, time frame and risk tolerance. The return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Companies may reschedule when they report earnings without notice.


Gray

Quote Of The Week

Fountain Pen


"Education is the key to unlocking the world, a passport to freedom."

-Oprah Winfrey

Recipe Of The Week

Fork and Knife

Egg Muffins


[12 muffins]

Ingredients:
  • 12 eggs
  • Topping of choice, including bacon, cheddar, tomatoes, spinach, mozzarella, mushrooms, etc. 
  • Salt and pepper, to taste

Directions:

Whether you're sending the children or grandchildren out the door for school or are in need of a healthy, quick breakfast for yourself, these easy breakfast muffins will quickly become your secret weapon. Plus, you can cook them in the beginning of the week and store them for about four days in the fridge.

  1. Preheat the oven to 350° F and spray a 12-cup muffin tin with nonstick spray.
     
  2. Whisk the eggs and fill each muffin cup about halfway full.
     
  3. Add in your desired toppings.
     
  4. Bake for 20 minutes. 


Recipe adapted from Cafe Delites[8]

 

Gray


Tax Tips

Document

Tax Incentives Can Help You Further Your Education


All this back-to-school season excitement might make you want to consider furthering your own education, and the IRS might be able to help. Tax credits, deductions, and savings plans can help taxpayers with their expenses for higher education.

  • Tax credits help with the cost of higher education by reducing the amount of income tax you may have to pay. The two tax credits available are the American Opportunity Tax Credit and the Lifetime Learning Credit.
     
  • Some education savings plans allow your earnings to grow, tax free, until the money is taken out; some allow the deduction to be tax free; some do both.
     
  • You may be able to deduct higher-education costs, such as tuition, student loan interest, and qualified education expenses, from your tax return. 

If you've always dreamt about going back to school, whether to further your career or just learn something new, knowing your potential tax benefits may be able to save you money. 

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.


Tip adapted from IRS.gov[9]


Golf Tip

Golfer

The Best Golf Tip? Always Keep Learning


Even if you've been playing the sport for years, there's always something you can learn when looking to get better at golf. One of the best ways to improve your game is to attend a golf school or academy. These training programs are led by highly trained instructors and players, and most feature intimate, teacher-to-student ratios and other great amenities. This face-to-face time is priceless if you want to improve your game. 

There are top-tier schools throughout the country, even if you don't live near one of the most-famous courses. They also range in intensity, from lessons for beginners to intensive golf workshops for seasoned players who want to fine-tune their skills. Golf Digest shares a comprehensive list of some of the best golf schools and academies in the U.S. While you might not be hitting 350-yard drives like the pros, you can definitely learn a thing or two from these highly skilled coaches (and make some golf-minded friends along the way). 


Tip adapted from Golf Advisor[10]


Healthy Lifestyle

Medical Cross

The Benefits of Brain Training


We know how important it is to exercise our bodies, but exercising our brains is just as important. When we continue to learn, our brains are better for it. Here are just a few benefits of "brain training," or exercising your brain:

  • Improved executive functions
     
  • Improved working memory
     
  • Improved processing speed
     
  • Preserved cognitive health
     
  • Fewer problems in daily function
     
  • Better control over our mental processing abilities

There are lots of fun ways to exercise your brain. One common way is to continue to learn new things. Attend a pottery, painting, or foreign language class in your neighborhood, or check for any discounts on community college courses. Another great way to exercise your brain is to socialize with others, spend time in nature, and practice mind puzzles, such as crosswords, Sudoku, or a game in a brain training app. 



Tip adapted from American Psychological Association[11]

Green Living

Leaf

Green Tips for the Office and the Classroom


If you're sending your kids or grandkids off to another year of school or want to implement more green tips in your own office, here are some places to start:
  • Inventory what you have before buying new supplies. Not only does this tip save money, but it focuses on reusing when we can.

  • Choose nontoxic office supplies. Many school and office supplies contain PVC (a dangerous plastic) and other harmful materials. Look for PVC-free binders, recycled pencils and markers, refillable pens, and recycled notebooks and printer paper.

  • Try to implement the "100-mile" diet for you and your kids, meaning that your food doesn't come from more than 100 miles away. This is a great step in thinking local first and organic for other, nonlocal options.

  • Try to cut down on printed material. Some offices have even gone completely paperless!
     
  • Buy fair-trade, organic coffee, tea, and drinks for the kids.
Tip adapted from Small Footprint Family[12]

Share the Wealth of Knowledge!

 

Please share this market update with family, friends, or colleagues. If you would like us to add them to our list, simply click on the "Forward email" link below. We love being introduced!

 

Gray 

Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

Diversification does not guarantee profit nor is it guaranteed to protect assets.

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors.

The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.

The Dow Jones Industrial Average is a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. The DJIA was invented by Charles Dow back in 1896.

The Nasdaq Composite is an index of the common stocks and similar securities listed on the NASDAQ stock market and is considered a broad indicator of the performance of stocks of technology companies and growth companies. 

The MSCI EAFE Index was created by Morgan Stanley Capital International (MSCI) that serves as a benchmark of the performance in major international equity markets as represented by 21 major MSCI indices from Europe, Australia, and Southeast Asia. 

The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

Past performance does not guarantee future results.

You cannot invest directly in an index.

Consult your financial professional before making any investment decision.

Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.

These are the views of Platinum Advisor Strategies, LLC, and not necessarily those of the named representative, 
Broker dealer or Investment Advisor and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.

By clicking on these links, you will leave our server, as the links are located on another server. We have not independently verified the information available through this link. The link is provided to you as a matter of interest. Please click on the links below to leave and proceed to the selected site.

Alphadroid
Notice: Your use of this site is considered evidence that you accept our Terms of Use and Privacy Policy, and is considered equivalent to your signature. AlphaDroid,Merlyn.AI, True
Sector Rotation, StormGuard-Armor, Polymorphic Momentum and Temporal Portfolio Theory are registered trademarks of SumGrowth Strategies, LLC. All materials copyrighted 2016
SumGrowth Strategies, LLC. Neither SumGrowth Strategies nor its AlphaDroid automated investment analysis tool provides financial investment advice specific to anyone's life situation. 
SumGrowth Strategies is not a registered investment advisor. Modeled strategy and portfolio performance is hypothetical and does not include fees associated with your account, trading, 
or advisor. AlphaDroid is limited to the private and non-commercial use of its professional financial advisor subscribers and their end clients as described further on the Terms of Use page.
Dorsey/Wright
Dorsey, Wright & Associates, LLC is a subsidiary of Nasdaq, Inc. Nasdaq, Inc. is a publicly-traded corporation (NDAQ). Its subsidiaries include The Nasdaq Stock Market LLC, Nasdaq PHLX LLC and Nasdaq BX, Inc., all of which are SEC-registered national securities exchanges, Nasdaq Execution Services, LLC, a registered broker-dealer that routes orders in equities and options to the appropriate market center for execution, Chi-X Canada ATS Ltd., a Canadian alternative trading system for the trading of TSX and TSXV-listed securities, and Nasdaq Futures, Inc., a CFTC Designated Contract Market for the trading of energy futures in oil, gas, and U.S. power. Nasdaq, Inc. also has subsidiaries that are foreign securities exchanges that receive listing and trading fees.Dorsey Wright will not publish research or make recommendations concerning NDAQ, nor trade the security for its Investment Management clients. Dorsey Wright may, however, publish research on, recommend or trade other securities listed on the Nasdaq exchanges, which receive fees from the listed companies and futures. Dorsey Wright will not take into account where a security is listed or traded in exercising its independent judgment for clients. In addition, Dorsey Wright does not manage or control where clients' broker/dealers route orders for execution. Accordingly, client orders may be routed to the subsidiaries of Nasdaq, Inc. for execution. These markets receive trading fees.Nasdaq, Inc. and its subsidiaries receive index licensing fees from investment product sponsors, as well as index calculation fees from index providers. These fees may be asset based. With respect to ETFs and other investment products for which Nasdaq, Inc. or its subsidiaries may receive licensing or asset-based fees, Dorsey Wright may, from time to time, (i) recommend such an ETF or other investment product in research for which Dorsey Wright receives fees; (ii) include such an ETF or other investment product in models or indexes for which Dorsey Wright receives an asset based fee; and/or (iii) recommend or include such an ETF or other investment product in the investment management accounts. While Dorsey Wright does not receive any portion of Nasdaq's fees directly, the firm may indirectly benefit as a subsidiary that is part of a Nasdaq business unit. To manage this potential conflict of interest, in the case of Dorsey Wright research or index and model licensing, Dorsey Wright would only include the Nasdaq investment product if the product helps to meet the stated objectives of the strategy and it otherwise meets the rules-based methodology associated with the strategy. In the case of the investment management accounts, Dorsey Wright will only recommend or include the Nasdaq investment product when the recommendation is suitable and meets the client's stated investment objectives. Dorsey Wright will not take into account the fees received by Nasdaq, Inc. and its affiliates in exercising Dorsey Wright's independent judgment for clients.Some performance information presented on this website is the result of back-tested performance. Back-tested performance is hypothetical and is provided for informational purposes to illustrate the effects of the strategy during a specific period. The hypothetical returns have been developed and tested by DWA, but have not been verified by any third party and are unaudited. Back-testing performance differs from actual performance because it is achieved through retroactive application of a model investment methodology designed with the benefit of hindsight. Model performance data (both back-tested and live) does not represent the impact of material economic and market factors might have on an investment advisor's decision making process if the advisor were actually managing client money. Past performance is not a guide to future performance. Future returns are not guaranteed, and a loss of original capital may occur.There are risks inherent in international investments, which may make such investments unsuitable for certain clients. These include, for example, economic, political, currency exchange, rate fluctuations, and limited availability of information on international securities. DWA, and its affiliates make no representation that the companies which issue securities which are the subject of their research reports are subject to, or in compliance with certain informational reporting requirements imposed by the Securities Exchange Act of 1934. Sales of securities covered on this site or in this report may be made in only those jurisdictions where such securities are qualified for sale. Investors in securities with values influenced by foreign currencies, effectively assume currency risk, because foreign-currency-denominated securities are subject to fluctuations in exchange rates that could have an adverse effect on the value or price of, or income derived from, such securities.Options trading involves risk and is not suitable for all investors. When participating in a covered call strategy, the investor is at risk of having to sell the stock if the stock's price rises above the strike price. Remember, in exchange for receiving the premium of having sold the calls, the investor is obligated to sell the stock if the option is exercised. The relative strength strategy is NOT a guarantee. There may be times where all investments and strategies are unfavorable and depreciate in value. There may be instances when fundamental, technical, and quantitative opinions may not be in concert.
 
[1] www.wsj.com/market-data

[2] www.wsj.com/market-data

[3] quotes.wsj.com/index/XX/990300/historical-prices

[4] www.cbsnews.com/news/u-s-china-trade-talks-scheduled-for-october-beijing-says-2019-09-05/

[5] www.bloomberg.com/news/articles/2019-09-06/u-s-payrolls-rise-130-000-boosted-by-25-000-for-census-count

[6] tradingeconomics.com/united-states/business-confidence

[7] www.cnbc.com/2019/09/06/stocks-look-to-reclaim-their-all-time-highs-in-the-week-ahead.html

[8] cafedelites.com/breakfast-egg-muffins-3-ways/ 

[9] www.irs.gov/newsroom/tax-benefits-for-education-information-center 

[10] www.golfdigest.com/story/best-golf-schools-and-academies 

[11] www.apa.org/monitor/2014/10/mind-games 

[12] www.smallfootprintfamily.com/10-green-back-to-school-tips 

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Summit Financial Group of Indiana
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