\

You Can’t Read the Economy By The Headlines

by | Mar 18, 2019 | Article, News, Opinion, Politics, Stock Market | 0 comments

As we celebrate a ten year old bull market it is worthwhile to see how we got here. Yogi Berra called it correctly with his statement, “It’s tough to make predictions, especially about the future.” At a press conference on March 3, 2009, it was at the time President Obama who said, “What you’re now seeing is profit and earning rations are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long term perspective on in.” The stock market hi its low point less than a week later on March 9, 2009. On that day the S&P 500 closed at 676. The S&P 500 closed at 2743 on March 8, 2019, which makes for a 306 percent gain, according to Yahoo Finance.

The president also expressed optimism that hiring and business investment would pick up. But it wasn’t until June 2014, over five years after the president’s high hopes for hiring that the economy fully recovered all the jobs lost during the Great Recession, according to CNN Business, March 9, 2015.

We begin the 11th year of a bull market with the market opening on March 11, 2019. The date is interesting on a couple of fronts. First, President Donald Trump proposed a record $4.7 trillion federal budget for 2020 on Monday. This president is counting on an optimistic 3.1 percent economic growth projections, along with accounting adjustments, and steep domestic cuts to balance future spending in 15 years. Trump’s argument is that the nation is experiencing “an economic miracle.” While the national debt is $22 trillion, the deficit is likely to hit $1.1 trillion in fiscal year 2020, the highest in a decade. Trump is certain the tax cuts will fuel robust growth. Some economists, however, submit the tax cut bump is flattening, as they see slower growth in the coming years. What concerns this observer the most is the piling on of even more debt by this administration with no planned correction.

The second reason the second Monday, March 2019 is notable is there is an increasing number of economists on Wall Street who are downgrading their expectations for U.S. first quarter growth. December’s retail figures dropped sharply which may be an indication consumers are losing their enthusiasm for spending. “The nearly $21 trillion U.S. economy relies heavily on consumer spending, which comprises about ⅔ of gross domestic product,” according to yahoo Finance, March 11, 2019.

A number of those who watch the economy have tempered their expectations for growth during the first three months of this year. The Q1 GDP is ”tracking very weak,” Goldman Sachs opined. Capital Economics suggests that consumer spending “is likely to remain unusually weak in the first quarter.” As some suggest overall GDP growth will slow to below 2%, others see softer retail data that GDP could check in at 1.5% in the first quarter. Last month, the Atlanta Federal Reserve forecasted “that fourth quarter 2018 growth would fall under 2 percent, well below the government’s initial estimate of 2.7 percent and short of President Donald Trump’s self-imposed target of 3 percent,” reported Yahoo Finance.

Rather than believing hope is a strategy and optimism is an investment foundation, let me suggest that you review your portfolio expectations. Greg Davis Vanguard Group Chief Investment Officer sees “near 50-50 chance of recession in 2020,” said on CNBC February 11. 2019. Davis said further, “Our expectations around U.S. equity markets if for about a 5 percent median, annualized return.” Now is the time to do for your portfolio what your car’s GPS does when you miss a turn, ‘Recalculating…’

 

More Investor’s Intelligence

The Greatest Economy Ever is Not Happening Now

Whether or not you thought a Fed move on interest rates would greenlight a brilliant move or cause for some improvement on the economic dial, this graph tells the whole story:What you see is an entrenched, self-interested, and Acela Corridor-dominated global elite...

read more

What’s Happening Here? Lack of Sex

“And these are desperate times… Markets are corrupted by monetary central planning. They’re confused. And the road back is going to be treacherous. We’re looking at a major re-pricing for all financial assets. And thousand-point intraday or day-to-day swings are part...

read more

200 N. Westlake Blvd., Suite 109

Westlake Village, California 91362-3783

805.495.2077   800.266.2077   888.WHY.BEPOOR

Fax: 805.497.8342

wordpress-173703-781067.cloudwaysapps.com


Securities offered through Securities America, Inc. (SAI), Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Investors Advantage and SAI are separate entities.

Important Information from FINRA to consider before transferring your account. Trading instructions sent via email may not be honored. Please contact my office at (805) 495-2077 or Securities America, Inc. at 800‐747‐6111 for all buy/sell orders. Please be advised that communications regarding trades in your account are for informational purposes only. You should continue to rely on confirmations and statements received from the custodian(s) of your assets. The text of this communication is confidential and use by any person who is not the intended recipient is prohibited. Any person who receives this communication in error is requested to immediately destroy the text of this communication without copying or further dissemination. Your cooperation is appreciated.

Share This