Tag Archives: Inflation

POCKETBOOK Week Ending March 22, 2019

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  • Recession coming?

The bond market is signaling a recession could be in our near future and if that is the case, word is recessions typically last around a year and during them stocks don’t always perform horribly during one. The bugaboo in it all, however, is inflation: It and recessions are first cousins and no one is a fan of it. Then again, we’re already seeing price increases on plenty of the items we purchase thanks to the tariffs Trump has imposed.

Oh well, another day in the upside down, topsy turvery pretzel-like who-is-on-first world we all are currently living in.

But I degress.

Back to the recession subject.

From CNBC MarketInsider.com comes this: “As far as recession goes, our economist feels quite optimistic that a recession will be avoided, at least this year. The market is focused not only on U.S. fundamentals but also on what’s happening in China, what’s happening in the rest of the world and how likely it is that political uncertainty, whether through trade policy or whatever, how likely is that to persist and beget a recession,” said Mark Cabana, head of short U.S.rate strategy at Bank of America Merrill Lynch…..
“As recession signals begin to flash and recession probabilities increase, I would expect market participants and people who deploy capital will become more cautious and there’s a risk that it’s a self-fulfilling prophecy,” Cabana said.”

Okay then.

 

  • Pew Research’s not-so-bright future study returns

A recent Pew research report has shed light on some not-so-happy or inspiring future outcomes. In other words, looking out 30 years, things aren’t looking very rosy.

Below are a few of results from the Pew Research Center Social & Demographic Trends report dated March 21, 2019:

  • 7 in 10 Americans were dissatisfied with the way things are going in this country.
  • 60% of those interviewed say the U.S. will be less important in the world by 2050.
  • 73% think that the gap between the rich and poor will continue to grow.
  • 65% say the country will be more politically devided over the next 30 years.
  • And, the majority of those responding expect the economy to be weaker, health care less affordable, the environment worse and  that older Americans will have a harder time makes ends meet than they do now.

Oh my.

 

  • Market Quick Glance

A week of mixed year-to-date returns with 1-year returns up.

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, March 22, 2019.

DJIA 9.32% YTD up a tad from the previous week’s 9.10%.

  • 1 yr. Rtn 6.45% way up from the previous week 2.23%

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   11.72% YTD down from the previous week’s 12.59%

  • 1 yr. Rtn 5.94% way up from the previous week’s 2.74%.

The S&P 500 reached a BRAND NEW CLOSING ALL-TIME HIGH on Sept. 21, 2018 of 2,940.91. The previous closing high was reached on August 29, 2018 of 2,916.50.

 

-NASDAQ 15.18% YTD down a hair from last week’s 15.87%%

  • 1yr Rtn 6.64% up from last week’s 2.76%

Nasdaq reached a BRAND NEW 52-week CLOSING HIGH on August 30, 2018 of 8,1333.30. The previous high was reached on August 24, 2018 of 7,949.71.

 

-Mutual funds

The year-to-date cumulative total reinvested performance for equity funds that fall under the  U.S. Diversified Equity Fund heading was 14.26% at the close of business on Thursday, March 21, 2019, according to Lipper.

Among the 408 Mid-Cap Growth Funds that fall under that huge Diversified category, the average year-to-date return was an impressive 20.17%. Small-Cap Growth Funds, however, performed better: 20.37% for the 592 funds that Lipper tracks in that group.

And then there are Equity Leverage Funds—-the average YTD performance of the 228 funds under that heading was 28.36%.

On the other hand, Dedicated Short Bias Funds’ average YTD return was -20.61%.

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 Oct. 13, 2017

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  • Inflation

 The wicked stepmother in the world of money is inflation. Like that hateful woman, should you know one, does all of her nasty business right in front of your very eyes without you noticing. Until it’s spending time and you find out the money you thought you had doesn’t nearly buy the same amount of goods and services it once did.

Like I said, it happens right in front of your very eyes.

Jack A. Ablin, BMOs chief investment officer, wrote about inflation in his most recent Current Market Update. Here’s history about inflation taken from that Update: “In an economic expansion spanning nearly 10 years, one missing ingredient has been inflation.  Year over year inflation has remained stubbornly below three percent consistently for more than six years.  Lackluster pricing power has vexed business leaders and the Federal Reserve who both would like to see incremental price growth.  Headline inflation has fallen short of the Fed’s two-percent target in 66 of the last 100 months.  Moreover, 2011 was the last calendar year when inflation hit three percent.  The trend has picked up marginally between 2014 and 2016, but last year’s inflation rate was a tepid 2.1 percent. ….”

If you’re wondering when inflation’s bite will get stronger, Ablin wasn’t specific. But he points out that if inflation flares up when there is no economic growth happening, that would represent a “bull markets financial threat.”

We shall see…

 

  • Market Quick Glance

Nothing spooky about Friday the 13th for three of the four indices followed below. All, with the exception of the Russell 2000, reached brand new highs.

All of this new high stuff is getting a little boring, if you ask me. And hard to figure if you’re looking for why’s from the talking heads. One of whom said that this market is going to continue upward as long as there are bundles of cash sitting on the sidelines.

Which– those in the know– say there is.

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, October 13, 2017.

-DJIA +15.73% YTD up a tad from last week’s 15.24%.

  • 1 yr Rtn +26.37% up from last week’s 24.66%

And another new all-time high for the DJIA. This one of 22,905.33 was reached on October 13, 2017.

Its previous high was reached October 5, 2017 at 22,777.04.

On March 1, the Dow stood at 21,169.11.

 

-S&P 500 +14.04% YTD up from last week’s 13.87%.

  • 1yr Rtn +19.72% up from last week’s +17.98%

The S&P 500 reached a new high of 2,556,65 on October 13, 2017.

The previous high of 2,552.51 was reached on October 5, 2017.

On March 1, 2017, that index stood at 2,400.98.

 

-NASDAQ +22.71% YTD up a tiny bit from last week’s +22.42%.

  • 1yr Rtn +26.71% up from last week’s 24.18%

The Nasdaq reached a new all-time high of 6,,616.58 was reached on October 13, 2017.

Its previous high of 6,590.18 was reached on October 5, 2017.

On April 5, 2017 the index closed at 5,936.39.

 

-Russell 2000 +10.72% YTD down from last week’s +11.28%.

  • 1yr Rtn +23.60% up considerably from last week’s +21.18%

The Russell 2000 reached a new all-time high of 1,514.94 on October 5, 2017.

Its previous high of 1493.56 was reached on September 29, 2017.

On March 1, 2017 this index stood at 1,414,82.

 

-Mutual funds

Even with a week resulting in new highs for many indices, the year-to-date average cumulative total reinvested return for equity funds falling under the broad U.S. Diversified Equity Funds didn’t move much. It closed with a 13.54% average return on Thursday, October 12, 2017, according to Lipper. That’s down a tiny bit from the previous week’s figure of 13.65.

The average Sector Fund had a year-to-date total return of 9.83% with two fund types under that heading up over 30%: Global Science & Technology funds up on average 39.38% and your basic Science & Technology funds, +32.01.

World Equity Funds were up on average 24.54%. Four of them have year-to-date average returns up over 30%: China Region Funds, +39.04; Pacific Ex-Japan Funds, +33.61%; India Region Funds, +32.05; and Latin American Funds, +30.94.

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.

•Best and worst ETFs

 There’s no overlooking the popularity of Exchange Traded Funds, ETFs. Their popularity and investment choice numbers have grown faster than, I’m gonna guess here, even Wall Street wizards could have ever imagined.

Knowing that, below are the three best and three worst ETF performers year-to-date through October 10, 2017 from ETFTrends.com:

  • Best: Ark Inovation (ARKK) up 74.3%; WisdomTree China Ex State Owned Enterprises Fund (CXSE) up 70.8%; and Kraneshares CSI China Internet ETF, (KWEB) up 68.2%.
  • Worst: United States Natural Gas Fund (UNG) down33.9%; PowerShares S&P Smallcap Eneegy Portfolio (PSCE), down 31.4%; and SPDR S&P Oil& Gas Equipment & Services Etf (XES), down 26.6%.

 

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