POCKETBOOK Week Ending May 17, 2019

 

• Happy Spenders and our Great(?) Economy

Whoa. I was at the brand new multi-thousand foot At Home décor store yesterday in North Palm Beach, FL. The hugely huge parking lot was jammed as were the too-many-to-count aisles. As you might imagine, the check-out line snaked around and you would have thought the joint was giving away stuff. They weren’t.

From there it was on to a Sunday stop at Costco and then Aldi’s. Jammola in both stores and their respective parking lots. I said something to the cashier at Costco about the crowd and he said, “It’s a great economy.”

Apparently it is.

Then again, Ford just announced it’s laying off about 10% of its 7,000 white collar work force with about 2,400 of the cuts coming to those in North America and 1,500 others to be eliminated via oluntary buyouts, according to CNN Business.

Then again, again, American households are now holding more debt than they did prior to the 2008 financial crisis. According to CNBC.com, 55% of U.S adults have credit card debt with 22% of them reporting the balances they carry range between $100 and $500 while10% have balances over $5,000.

But wait there’s more: Consumer sentiment is the highest it’s been in 15 years, according to a new University of Michigan survey.

“Consumers viewed prospect for the overall economy much more favorable, with the economic outlook for the near and longer term reaching their highest levels since 2004,” said Richard Curtin, chief economist for the Surveys of Consumers.

So happy moods are here again.

Then again, so far this year at least 10 stores– whose names we are all familiar with– are closing some of their stores. They include: Victoria’s Secret; JCPenny; Family Dollar; Gymboree; Payless ShoeSource; Charlotte Russe; GAP; Ann Taylor, Loft, Lane Brant: the Ascena Retail Group; Macy’s; and LifeWay Christian Stores.

Huh. I wonder how long our reportedly lowest unemployment rate in decades is going to last.

 

• Market Quick Glance

Last week there were downers everywhere as in on both the year-to-date returns and 1-year ones for the DJIA, S&P500 and NASDAQ.

Below are the weekly and 1-year index performance results for the three major indices—DJIA, S&P 500 and NASDAQ — including the dates each reached new highs. Data is according to CNBC.com and based on prices at the close of business on Friday, May 17, 2019.

–DJIA 10.44% YTD down again from the previous week–it closed at 11.21%.

• 1 yr. Rtn 4.25% down again from the previous week 4.86%

Most recent DJIA a new ALL-TIME CLOSING HIGH was reached on Oct.3, 2018 of 26,951.81. The previous high was reached on Sept. 21, 2018 of 26,796.16.

 

-S&P 500   14.07% YTD down from the previous week’s 14.95%

• 1 yr. Rtn 5.12% down from the previous week’s 5.81%.

*****The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on Friday April 26, 2019 of 2,939.88. The previous all-time closing high was on Sept. 21, 2018 of 2,940.91. Prior to that, the high of 2,916.50 was reached on August 29, 2018.

 

-NASDAQ 17.80% YTD down again from last week’s 19.32%.

• 1yr Rtn 5.88% way down from last week’s 6.91%.

*********Nasdaq reached a BRAND NEW All-Time CLOSING HIGH on Friday, April 26, 2019 of 8,146.40. Prior to that, the previous high of 8,1333.30 was reached on August 30, 2018. Before that, on August 24, 2018 reached it’s then all-time high of 7,949.71.

 

-Mutual funds

The slide continues.

At the close of business on Thursday, May 16, 2019, the year-to-date cumulative total reinvested performance of U.S. Diversified Equity Fund was 15.04%,according to Lipper. That’s down from the previous week’s close of 15.11%.

Even though there has been a slide in the average year-to-date returns, many different types of funds have average returns near 20% and more. A few of them under the large umbrella heading of U.S. Diversified Equity Funds include;

-Large-Cap Growth funds, 19.30%;

-Multi-Cap Growth funds, 19.50%;

-Mid-Cap Growth Funds, 22.51%;

-Small-Cap Growth funds, 20.73%;

-and Equity Leverage funds, 24.84%.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

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POCKETBOOK:Week ending March 3, 2018

• 

• Another bull’s birthday

The bull market is going to be 9 this week. In dog years that would be 63 in human years. Okay okay—I know there’s nothing that really connects bulls with dogs and humans but then again, from a human’s point of view, 63 represents an age of maturity. One, that some figure, is an age worthy of retirement.

A look back at the historic lengths of  bull markets between 1926 through 2017 represented by  S&P 500 Index total returns reveals that a bull market lasts on average  9 years, according to FirstTrust (FTPortfolios.com). That puts this market in  watch-for-bears territory.

The longest bull market ,relating to that same index, lasted 13.9 years (from the 1930s-early 1940s), with an average annualized rate of return of 17.2%.  The shortest, 2.5 years in the early 1970s in which the average annualized gain was 25.3%.

Clearly, this bull market has been running a long time but more importantly,  bulls don’t run forever.

Then again, this same source reveals that S&P500 Index  bear markets have a history of being much shorter in length averaging only 1.4 years.

 

• Market Quick Glance

Back peddling and who knows for how long.

If, at the beginning of this year, you invested into an S&P 500 index fund or one that tracks the Russell 2000 you’ve lost money. Not so with the Nasdaq.

Who knows what the year-to-date returns will be by the end of this week but here’s a bet worth considering: If Trump continues to be hell-bent on imposing tariffs on the steel and aluminum that the US imports, the market might have a hell-bent time of moving upward.

Below are the weekly and 1-year index performance results for four major indices— including the dates each reached new highs—according to CNBC.com based on prices at the close of business on Friday, March 3, 2018.

 

–DJIA -0.73% YTD down and back into minus land–the previous week +2.02%  

• 1 yr Rtn 16.83% down from the previous week’s 22.31%

Most recent DJIA all-time high was reached on January 26, 2018 of 26,616.71. The previous high was reached January 18, 2018 was 26,153.42.

 

-S&P 500 +0.66% YTD significantly down from last week’s 2.76%

• 1 yr Rtn +12.99% down from last week’s 16.40%

The S&P 500 reached its most recent all-time high on January 26, 2018 of 2,872.87. The previous high was reached on January 19, 2018 of 2810.33.

 

-NASDAQ +5.13 YTD down from last week’s 6.29%

• 1yr Rtn +23.83% down from last week’s 27.74%

Nasdaq latest new all-time high of 7,505.77 was reached on January 26, 2018. The previous high was reached on January 19, 2018 of 7,336.38.

 

-Russell 2000 -0.15%YTD down into minus land from last week’s 0.89%

• 1yr Rtn +9.85% down from last week’s +11.08%

The Russell 2000 reached an all-time high on January 24, of 1,615.52. The previous high was reached on January 16, 2018 of 1,604.02.

 

-Mutual funds

Reflecting a not-so-hot week for stocks, the year-to-date average cumulative total reinvested returns for equity funds that fall under the broad U.S. Diversified Equity Funds heading was -0.31% at the close of business on Thursday, March 2, 2018, according to Lipper.

Near the end of 2017, many talking heads were projecting that markets outside of the U.S. were going to be the ones likely to score well this year. That however, hasn’t necessarily been the case. For instance, the year-to-date return for the average World Equity Fund was 0.11% as of Thursday’s close. There are 4,453 funds that fall under that broad heading.

Areas doing well and not-so-well under that heading include: Latin American Funds and China Region Funds, up 6.28% and3.66% respectively, on average. And, on the other hand,  India Region Funds and Global Equity Income Funds were down on average -5.40% and -2.08% respectively.

Visit www.allaboutfunds.com for more information about how various equity and fixed-income funds have rewarded investors over the short-and long-term, based upon Lipper data. Short-term meaning weekly and monthly performance returns; longer-term includes quarterly, year-to-date, 1-yr, 2-yr, 3-yr and 5-yr returns.

 

• Kohl’s and Aldi a match made in heaven?

There’s a maybe unlikely new couple coming to town: Kohl’s, the retailer that sends out so many discount coupons to their credit card holders that you wonder how in the world they make any money—-and Aldi, the German grocer that sells its food stuff and goodies at prices that don’t need any coupons to get shoppers into their stores.

The deal is, Kohl’s has too many stores with too much space in them and has plans to cut the size of its footprints, while Aldi is expected to open 900 new stores over the next five years, according to USA Today.

So,  the idea is to lob off some of existing Kolh’s stores space to make Aldi its next door neighbor.

If you’re a shopper of both, the idea makes sense. If you’re not, it might be time to try shopping at either.

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