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The Best of What They Said and I Read Week Ending 1/27/19

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 – January 25, 2019 – The S&P 500 Goes Nowhere After Its Big Runup – Ben Levisohn

  • “What do you do after you have the best start to a year since 1987? If you’re the S&P 500, you take a break.  The broad-market index dipped 0.2%, to 2664.76 last week, ending a four-week winning streak that saw it gain 11%. The Dow Jones Industrial Average advanced 30.85 points, or 0.1%, to 24,737.20, while the Nasdaq Composite ticked up 0.1%, to 7,164.86.”
  • “…When news broke on Friday that a deal to end the government shutdown had been reached, the market...did almost nothing. That’s likely because the market never bothered to price it in…Global economic growth is slowing, trade remains an overhang, and analysts are busy cutting their 2019 earnings estimates, which are now forecast to grow by just over 6%, down from more than 10% last September. “It’s tough to make an argument for tightening policy into 2019, given what’s happening on the economic front,” says Charlie Ryan, portfolio manager at Evercore Wealth Management.”
  • “…the market has already made back a big chunk of its December losses. The S&P 500 has gained 13.3% from the Dec. 24 low…That gain means that the easy money has been made, but valuations suggest more upside, Citi’s Levkovich says. Historically, when the S&P 500 trades at a trailing price/earnings ratio between 16 and 18, as it does now, it gains a median 9% over the next 12 months. “If the concerns moderate, stocks could and should move higher,” he says.”

U.S. Global Investors Investor Alert – January 25, 2019 – Frank Holmes 

  • “…U.S. jobless claims fell 13,000 to 199,000 last week, the lowest level since 1969, signaling the labor market remains tight even amid the government shutdown.”
  • “…An offer by two Chinese vice-ministers to travel to the United States this week for preparatory trade talks was rejected by the Trump administration…The U.S. turned down the offer due to lack of progress on two important issues. It highlights the difficulty that Washington and Beijing will face in trying to reach an agreement by the March 1 deadline. The stalemate could ultimately derail the higher-level meeting next week between the two countries and cause more worry for financial markets, the article explains.”
  • “…China’s economy cooled in the fourth quarter under pressure from faltering domestic demand and bruising U.S. tariffs, dragging 2018 growth to the lowest in nearly three decades and pressuring Beijing to roll out more stimulus to avert a sharper slowdown…Citing a bigger-than-expected slowdown in China-U.S. trade tensions, a possible no “Brexit” deal and weakness in Europe and emerging markets. The IMF expects global growth to decline to 3.5 percent this year.”
  • “…The Nikkei Asian Review this week highlighted a recent report by New York-based research firm eMarketer that China “is expected to overtake the U.S. to become the world’s largest consumer of goods this year despite a slowdown in the economy and retail sales.” The forecast, the article went on, is based on estimates of retail sales growth of some 7.5 percent for China and 3.3 percent for the United States. Monica Peart, the senor forecasting director at eMarketer, explained, “The rising incomes of Chinese over the past years have catapulted millions into a middle class that has experienced a marked expansion in purchasing power.”

MarketWatch – January 25, 2019 – Opinion: 10 retirement lessons from a retired retirement pro – Richard Quinn

  • “For the better part of 40 years, I spent a great deal of time helping thousands of workers prepare for retirement…Since then, I’ve learned a great deal more about retirement, both from my own experience and from others. Here are my top 10 lessons:
  • Where did all the “friends” go? …But when you retire, and you lose your authority and influence…Your true friends will remain. But your value to others will be gone—and so will they. Don’t be surprised.
  • There is an old saying, “I married you for better or worse, but not for lunch.” …When you add eight to 12 hours a day to the time you spend with a person, there’s an adjustment. Talk about it.
  • There is an end to retirement. I don’t want to be maudlin. But before graduating school or college, we look forward to a career. During our career, we look forward to retirement. Once retired, we look forward to waking up.  OK, it isn’t that bad and it isn’t like the end of the movie is a big secret. Still, when you receive notices of former co-workers passing, it’s a little depressing. Keep calm and carry on.”

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