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The Best of What They Said and I Read Week Ending 3/31/2019

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 – March 29, 2019 – The S&P 500 Is Off to Its Best Start Since 1998 – Ari Salzman

  •  “Incomes and spending are surprisingly weak, corporate earnings are expected to drop, and a top presidential adviser is calling for the Federal Reserve to cut interest rates. Nonetheless, the S&P 500 index has soared 13.1% since the start of the year, its largest first-quarter gain since 1998.”
  • “I would define this environment, year to date, as fascinatingly counterintuitive,” Michael Arone, chief investment strategist at State Street Global Advisors, told Barron’s. “Stocks are rallying, but bond yields are reflecting much lower growth.” Stocks rose during the quarter because the Fed backed away from raising interest rates, and investors grew more confident that the U.S. and China would sign a trade deal, Arone said. The market was also rebounding from a very rough fourth quarter—“conditions at the end of the year were wildly oversold,” he noted.
  • “For the week, the Dow Jones Industrial Average rose 426.36 points, or 1.7%, to 25,968.68. For the quarter, the Dow was up 11.2%, its best first-quarter gain since 2013. The S&P 500 rose 1.2% on the week to 2834.40, and the Nasdaq Composite was up 1.1%, to 7729.32.”
  • “…Nothing is screaming recession yet, but the bond market was at least whispering it for much of the week, as the three-month Treasury yield traded above the 10-year yield, a so-called inversion. When the economy is healthy, the 10-year normally yields more because investors don’t want their money tied up in a long-duration security when there are other, more promising investments. The numbers flipped again on Friday, making the signal less clear.”

U.S. Global Investors - Investor Alert – March 29, 2019 – Frank Holmes

  • “…UPS just beat out Amazon, FedEx and Uber to make America's first revenue-generating drone delivery operations. UPS, in partnership with drone technology company Matternet, began its daily drone delivery of medical supplies within the WakeMed Raleigh campus on Tuesday.”
  • “…Whether or not the U.S. will fall into recession in the coming year is a main point of disagreement among economists lately – and that in itself may be an ominous sign, writes Bloomberg’s Mark Whitehouse. As of Friday, Bloomberg’s survey of dozens of economists, on the outlook for the U.S., show that they expected the economy to grow 2.25 percent in the next 12 months. However, there was a lot of variation as well, particularly on the downside – ranging from 3.2 percent growth to 0.8 percent contraction. According to Whitehouse, variation matters. Back in 2007, although economists weren’t very good at predicting recessions, they did tend to disagree more when one was imminent. That’s what happened before the downturns of 1990 and 2001, and what ultimately happened before 2008.”

Bloomberg’s Five Things Newsletter – March 25, 2019 – And finally, here’s what Joe is interested in this morning

  •  “…The media theorist Marshall McLuhan argued that one of the laws of media is that all potential new media forms, when pushed to their limits, end up having the reverse effect to what one would expect. So take, for example, the mobile phone: it hastened the death of the voice phone call. Or social media: tools to facilitate online interaction have reportedly led to loneliness and alienation. People have thought for a while that the internet might make cities obsolete, as technology allows people to learn and communicate from anywhere, but instead we saw global mega-cities grow and grow, while also getting more expensive. In the New York Times this weekend, Nellie Bowles has a provocative piece arguing that human contact is increasingly becoming a luxury good. You can see this: the rich pay up to live in tightly clustered urban areas, and jet from one conference to another, where they see people in the flesh that they could just as easily talk to via Skype. There's probably no reason to think this trend is going to go away, and so it's worth thinking about what other kinds of long-term implications there will be from a small group of people paying top dollar to be in proximity with each other. Real estate is the obvious way it will play out, but in areas like travel, services, medical care, education, and hospitality, probably the same trends can be observed.”

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