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The Best of What They Said and I Read Week Ending 11/18/18

Short excerpts from articles I found interesting

I may not agree with the author and the following material is not intended as investment advice

U.S. Global Investors Investor Alert– November 16, 2018 – Frank Holmes

  • “Former Federal Reserve Chairman Alan Greenspan said in a Bloomberg TV interview this week that he’s beginning to see the first signs of inflation due to a tight labor market. Greenspan also warned that the rising U.S. debt level could undermine the current economic expansion. “The tax cut actually did get a buoyancy, and we’re still feeling some of it, but it’s nowhere near enough to offset the actual deficit,” Greenspan said. “You can’t have a tax cut without finding the revenues elsewhere, or you run into problems.”

  • “…The major market indices finished down this week. The Dow Jones Industrial Average lost 2.22 percent. The S&P 500 Stock Index fell 1.61 percent, while the Nasdaq Composite fell 2.15 percent. The Russell 2000 small capitalization index lost 1.42 percent this week…The 10-year Treasury bond yield fell 11 basis points to 3.07 percent”

  • “…Pacific Gas and Electric Company (PG&E) was the worst performing stock for the week, falling 38.88 percent…PG&E, California's biggest utility provider, has seen more than half its market value wiped out since the wildfires started.…Apple stock slid into a bear market this week, with shares down more than 20 percent... Apple’s stock price dropped near $187 amid analyst downgrades and concerns about weaker demand for iPhones. Traders haven't been this worried about tech stocks for 14 years, writes Business Insider, and this nervousness could be bad news for the market…Crude oil was the worst performing commodity this week. The commodity dropped 5.62 percent after the Energy Information Administration reported a huge crude oil inventory build of 10.3 million barrels…The dollar’s bull run has ended and it’s time to sell the currency, according to Morgan Stanley. “The U.S. dollar may weaken as credit spreads widen, equity prices fall, and sovereign bond yields also begin falling amid dis-inflationary pressure and falling oil prices,”

Kiplinger’s Personal Finance– December, 2018 – A Tribute to Sears – Mark Solheim

  • “As I write this column in mid October, the financial world is dealing with a bad case of the jitters.  The stock market is a on a roller-coaster ride, inflation is heating up, mortgage rates are closing in on 5% - and now Sears has filed for bankruptcy.”
  • “…Besides creating iconic brands, Sears was a financial innovator.  The company introduced its customers to shopping on credit in 1906 and launched the Discover card in 1985.  It created Allstate insurance in 1931 and eventually added the Dean Witter Reynolds stock brokerage and Coldwell Banker real estate firms to its corporate holdings…The initial public offering of Sears in 1906 was the first major IPO in America.  Bearing one of the coveted single-letter stock symbols, S, it traded on the New York Stock Exchange until Sears merged with Kmart.”

The Kiplinger Letter – November 16, 2018

  • “The bull market may not be over quite yet.But investors should use extra caution in 2019…Start thinking more about playing defense with your investments.The stock market is likely to grind a bit higher…perhaps to 3,000 for Standard & Poors 500 stock index.However, there’s no guarantee that stocks will end the year at their highs, and sudden, sharp moves are likely.”
  • “Sure, the economy is still in good shape…miniscule unemployment, healthy corporate profits and GDP growth that figures to be solid in 2019.  But it won’t be as robust as it was in 2018.  After a surge in corporate earnings fueled by tax cuts and strong demand powered partly by more spending in Washington, things are bound to slow down again.  And slowing corporate profit growth is bad for stocks.  The risks to the market are on the rise:  Trade fights that could intensify next year.  Higher interest rates.  Thinner profit margins.”

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