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The Best of What They Said and I Read Week Ending 11/24/2019

Short excerpts from articles I found interesting.   I may not agree with the author and the following material is not intended as investment advice

Barron’s – November 22, 2019 – The Dow’s Winning Streak Ended With a Whimper as Trade Worries Return -  Nicholas Jasinski 

  •  “U.S. stock indexes took a breather from their long march toward record highs this past week, as investors got a reminder that trade wars can be hard to win.Negotiators from the U.S. and China are stuck on fundamental points of their “phase one” deal. It has been well over a month since the U.S. announced an “agreement in principle” on a partial settlement of the nearly two-year old trade war. The phase-one agreement would deal with some low-hanging fruit—think agricultural exports to China and a delay of planned U.S. tariffs—while setting the stage to deal with thornier questions, including intellectual-property rights and scaling back existing tariffs. Now it appears that a narrow phase-one deal may not come until next year.”

  • “The S&P 500 index fell 0.3% this week, to 3110.29. The Dow Jones Industrial Average lost 0.5%, to 27,875.62, and the Nasdaq Composite slipped 0.2%, to 8519.88. Optimism about some measure of improvement on U.S.-China trade relations may have reached a near-term peak, with concrete details of concessions from both sides needed to help boost stocks further. “Our view of U.S. and China is that it’s a competition that’s going to go on for a generation economically, diplomatically, militarily,” says CIBC Private Wealth Management Chief Investment Officer Dave Donabedian. “We don’t have very high expectations of a broad structural trade arrangement, but markets would be satisfied with a de-escalation that at least puts the trade issue on the back burner for 2020.”

  • “Add to a potentially improving trade situation an accommodative Federal Reserve, better-than-expected third-quarter earnings growth, and an economy that doesn’t appear to be tumbling into recession, and you have the strong tailwinds behind U.S. stocks’ recent gains. Each major index has returned well over 20%, including dividends, in 2019.”

The Wall Street Journal – November 21, 2019 – Charles Schwab Holds Talks to Buy TD Ameritrade -  Rachel Louise Ensign and Christina Rexrode

  • “Charles Schwab Corp. is in talks to buy TD Ameritrade Holding Corp. in a deal that would reshape the discount-brokerage market, where millions of individual investors buy and sell stocks. The companies have held on-and-off talks for months and were close to a deal Thursday, though there is still no guarantee they will reach one, people familiar with the matter said. If they do, it would likely value TD Ameritrade at around its current market value of $26 billion.  A merger would cement Schwab’s role as the dominant player in the industry. The San Francisco-based firm is the largest discount broker, while TD Ameritrade, based in Omaha, Neb., is No. 2.” 

U.S. Global Investors - Investor Alert – November 22, 2019 – Frank Holmes 

  • “…Ray Dalio’s Bridgewater Associations has bet more than $1 billion that stock markets will fall by March, according to people familiar with the matter. The Wall Street Journal reports that there has been a surge in put options outstanding tied to the S&P 500 index, hitting the highest level in more than four years. This is a sign that more investors are becoming increasingly bearish on the market, especially ahead of the 2020 presidential elections.”

  • “The world’s wealthiest investors are becoming more rattled and are looking for traditional security in the form of highly secured vaults. IBV International Vaults is opening its sixth location, this one in London, where the company will offer apartment-sized spaces for securing valuables. Swiss Gold Safe says it has seen extraordinary demand for safe-deposit boxes since it started offering them in 2015. Sincona Trading AG, a precious metals dealer in Zurich, said it had many empty safety deposit boxes three years ago, but now they are renting about five a day and will soon be full.”

  • “…A Phase One U.S.-China trade deal remains an opportunity, with the latest updates on the week being that the U.S. and China are reportedly “close,” according to President Trump, and that China would “like” to make a deal, but that Hong Kong appears to be increasingly problematic. Markets still appear to remain reasonably optimistic that a deal of some kind is more likely than not, and given that the two sides remain in close conversation with invitations for further talks on the table and a December 15 deadline incentivizing serious discussion, perhaps no “big” news is good news for the moment.”  

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