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The Best of What They Said and I Read Week Ending 4/14/2019

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 – April 12, 2019 – Stocks Near Record Highs as Investors Sit Tight – Ben Levison 

  •  “…last week…The S&P 500 rose just 0.5% to 2907.41, while the Nasdaq Composite advanced 0.6% to 7984.16, and the Dow Jones Industrial Average dipped 12.69 points to 26412.30.”

  • “…Trading volume was tepid at best. This past Monday, fewer shares changed hands than on any day since Dec. 24—when the market closed early for Christmas. Tuesday’s volume was lower than Monday’s, Wednesday’s was lower than Tuesday’s, and...well, you get the point. That was just another sign that no one wanted to place any big bets on the market this past week—in either direction.…The urge to do nothing makes sense, if only because the S&P 500 has gained 16% so far this year and is just 0.8% away from a new all-time high. “We’ve had such a strong run through the first quarter. At some point the market is going to be due for a rest,” says David Donabedian, chief investment officer of CIBC U.S. Private Wealth Management.”

  • “…Then JPMorgan Chase reported stronger-than-expected earnings on Friday, helping to boost its stock and the exchange-traded fund. There were also signs that China’s fiscal and monetary stimulus is finally starting to have an impact, as its exports increased by 14% in March…Even better, the yield curve is no longer inverted. The 10-year Treasury yield rose 0.057 percentage point to 2.56% this past week, its highest in nearly a month—safely above the yield of the three-month bill. That means the yield curve, which briefly inverted three weeks ago, is no longer signaling a recession, at least for now. “Right now, when the yield on the 10-year goes up, that’s viewed as good news in the market,” says CIBC’s Donabedian.”

Barron’s – April 12, 2019 – Does Trump Care Too Much About the Stock Market? – Randall W. Forsyth 

  •  “…President Donald Trump pays close attention to the stock market, which he views as a key barometer of the success of his administration. And this is a bad thing?   Ruchir Sharma, chief global strategist of Morgan Stanley Investment Management…thinks it could be. Writing in the op-ed pages of Wednesday’s New York Times, he contended that Trump’s “dangerous obsession with the markets” caused him to adjust policies to keep equity prices high.”

  • “Trump likes to brag about the stock market’s performance since his election, and not without justification. According to Wilshire Associates, as of Friday, the value of the broad U.S. stock market had increased by $9.1 trillion, or 35.6%, since its close on Election Day, Nov. 8, 2016. Since Inauguration Day, Jan. 20, 2017, the Wilshire 5000 had increased by $6.9 trillion, or 26.6%.  The major averages are a chip shot away from their records, with the S&P 500 index less than 1% under its Sept. 21 high. And if dividends are included, the S&P 500 total return index made it over the top to a new high on Friday, according to Dan Wiener, who co-edits the Independent Adviser for Vanguard Investors newsletter. The Dow Jones Industrial Average, meanwhile, was within 416 points of its high-water mark, set on Oct. 3.”

  • “…The much-discussed inverted Treasury yield curve, a recessionary portent, also has uninverted. The benchmark 10-year note’s yield last month had briefly dipped below that of the three-month bill, but since has moved back to 2.56%, from 2.37% on March 27, while the T-bill remained essentially unchanged around 2.44%. The restoration of a positively sloped yield curve has boosted shares of banks and other financials, with the exchange-traded fund (ticker: XLF) up 6.8% since the recent low in Treasury yields.”

Kiplinger’s Retirement Report – April 2019 – Information to Act On

  •  “…IRA contributions.  You still have time to make last-minute IRA contributions for 2018.  Savers 50 age 50 and older can stash up to $6,500 in traditional and Roth IRAs for 2018 by the mid April deadline for your federal tax return.   At the same time , consider getting a jumpstart on IRA contributions for 2019 – those 50 and older can stash up to $7,000 in traditional and Roth IRAs this tax year.  You or a spouse must have earned income to contribute to the IRA.   People age 70 ½ or older can no longer contribute to a traditional IRA but a taxpayer of any age can contribute to a Roth IRA.” 

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