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The Best of What They Said and I Read Week Ending 3/18/18

 Short excerpts from articles I found interesting.

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

Bloomberg Business Week – March 12, 2018 – Increase Your Nest Egg by Rob Mandelbaum

“Oregon is pioneering an auto IRA for workers of small companies without 401(k) plans…The key feature in the Oregon plan is the automatic enrollment…people with workplace plans are 10 to 15 times more likely to save than those without, says David John, an AARP policy advisor who helped develop the model for OregonSaves.  “When you have payroll deduction, you don’t think about it,” he says.  The inertia works both ways.  In Oregon about 80 percent of participants have stuck with the program…”

““The market is so discombobulated right now that it can’t even decide what it’s afraid of.  What do we mean? When the Standard & Poor’s 500 index suffered its first correction since the beginning of 2016 last month, the cause was easily identified—a good old-fashioned inflation scare caused by a larger-than-expected increase in wages and a rapidly rising 10-year Treasury yield, which almost hit 3%.  Fast-forward more than a month, and those fears seem almost quaint. February’s payrolls print on March 9 alleviated those inflation concerns when wages rose far less than expected, but that hasn’t relieved the tension in the market...”

“…The Dow Jones Industrial Average dropped 389.23 points, or 1.5%, to 24,946.51, while the Nasdaq Composite declined 1%, to 7481.99. The S&P 500 fell 1.2%, to 2752.01, after slipping for four consecutive days to start last week.  The funny part is that each day’s drop was caused by an apparently different reason—Special Counsel Robert Mueller’s subpoena of the Trump Organization, reports of new tariffs being planned for China, the exit of Secretary of State Rex Tillerson.  Our favorite, though, has to be the response to this past week’s retail-sales data. The number was bad—sales dropped 0.1% in February from January, its third consecutive monthly decline—and one that came despite the recent tax cuts that were supposed to get consumers spending again. The fact that the Atlanta Fed’s GDPNow forecast for first-quarter gross-domestic product growth dropped below 2% only added to the concern, and caused the 10-year Treasury yield to drop as low as 2.80%. With that, concerns about too much growth were replaced by fears there’s too little, a flip-flop worthy of a good politician…”

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

“… Amazon's TV shows brought 5 million people to its Prime subscription service in early 2017. This is the first indication to date of how successful the company’s TV offering has been at driving subscribers.”

“…The narrowing spread between short- and long-dated U.S. Treasuries has resumed this month after inflationary fears triggered a steepening of the yield curve in the February market rout. This bodes well for stock valuations and a continued risk rally, according to Evercore ISI’s Dennis DeBusschere. A flatter curve signals subdued economic volatility and muted premiums for price risk over the long haul, he wrote in a Wednesday note…Treasury yields are reaching a point at which “bonds can challenge stock returns,” according to David Templeton, a money manager and principal at Horan Capital Advisors LLC. Templeton cited the gap between the yield on 10-year notes and the dividend yield on the S&P 500 Index, which topped one percentage point last month for the first time since January 2014. The potential for the spread to widen further “will serve as a headwind for stocks,” he wrote.”

“…Consumer sentiment in March unexpectedly jumped to a 14-year high after tax cuts boosted disposable incomes, while new tariffs boosted inflation expectations and dimmed the outlook, a University of Michigan survey showed. The sentiment index rose to 102 (estimated 99.3) from 99.7 in February…”


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