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The Best of What They Said and I Read Week Ending 2/18/18

Short excerpts from articles I found interesting.

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

The Wall Street Journal – February 16 - 17, 2018 – US Stocks Pare Gains After Mueller Probe Incident– by Michael Wursthorn and Riva Gold

  • “The Dow Jones Industrial Average and S&P 500 edged higher Friday to extend their rebounds as stocks showed firm signs of regaining their footing after tumbling earlier this month. The blue-chip index gained 4.3% over the past five trading days to notch its best week since President Donald Trump’s election, while the S&P 500’s 4.3% move upward was its biggest weekly jump since 2013…the Nasdaq had risen enough earlier in the week to add 5.3%, its biggest weekly gain in seven years.”
  • “Jitters about the threat of faster inflation subsided this past week, as many investors said strong economic growth and robust corporate profits should support major indexes’ move higher, similar to the sentiment for much of last year. The upbeat economic backdrop helped many investors use the recent drawdown as a buying opportunity to add to their stock portfolios at lower prices.”
  • “…Earlier this month, stocks fell dramatically, pushing the Dow and the S&P 500 into correction territory after strong wage figures in the monthly U.S. jobs report suggested inflation had picked up. New data this past week further showed inflation is firming, with U.S. producer prices rising in January and consumer-price data exceeding expectations. While an uptick in inflation is concerning, investors expect the pace to be slow enough to avoid additional tightening of monetary policy.”

The Kiplinger Letter – February 16, 2018

  • "The president’s proposed annual budget is growing more irrelevant in an era when Congress can barely keep the government funded. Lawmakers will stick with bipartisan plans that boost spending and punt tough deficit-reducing decisions. Congress will ignore President Trump’s call for deep spending cuts in 2019, as it did last year. Capitol Hill won’t cede its powers of the purse to the White House. Trump had to OK up to $300 billion in new spending for fiscal years 2019 and 2020 before unveiling his 2019 budget, rendering it meaningless before the ink was dry. Trump’s plan doesn’t even pretend to balance the budget…more confirmation that neither party cares about deficits. The GOP did when it was the party out of power. What will resurrect fiscal discipline? Election of a Democratic president, probably. Republicans prefer cutting deficits when Democrats are in the White House. For example: President Clinton signed the last balanced budget. President Obama agreed to budget sequestration. Both times, Republicans in Congress forced the moves.”

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

  • “…Today marks the first day of the Chinese Lunar New Year, also known as the Spring Festival, China’s most important holiday. The fire rooster struts off-stage, clearing the way for the loyal earth dog.”
  • “…China is a veritable wealth factory…Last year, the China region added more new billionaires than the U.S. for the first time ever.”
  • “… Expectations are especially high for electric vehicle (EV) production and sales, as the Chinese government sweetened the incentive for families to trade in their gas-powered automobile for one that runs on a battery-powered electric motor. Those with a range greater than 400 kilometers (249 miles) on a single charge now come with a 50,000 yuan ($7,881) cashback incentive, up from 44,000 yuan ($6,937) last year, according to Bloomberg. The government also increased the number of kilometers a car must be able to travel on a single charge to qualify for the incentive, from 100 last year to 150…According to UBS, China overtook the U.S. and Japan in 2016 in installed robotics systems, and by 2020 it’s set to manufacture up to 40 percent of all robots globally.”
  • “…Nearly 40 percent of the world’s unicorns call China home. As you probably know, a “unicorn” is a company valued at more than $1 billion that hasn’t been listed yet. Think Uber, Dropbox, Airbnb and more.  A September report by Deloitte and China Venture found that China is home to 98 of the world’s 252 unicorns, accounting for 38.9 percent of the total number. Only the U.S. has more at 106…”

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