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The Best of What They Said and I Read Week Ending 4/21/2019

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 19, 2019 – The Stock Market Did Nearly Nothing This Week.  Why That’s a Good Thing. – Ben Levison 

  •  “…This past week’s market action was certainly uneventful. The Dow Jones Industrial Average gained 147.24 points, or 0.6%, to close at 26,559.54, while the S&P 500 dipped 0.1% to 2905.03, and the Nasdaq Composite advanced 0.2% to 7998.06.”

  • “…If market volatility is a reflection of uncertainty—good or bad—there’s very little of either right now. Consider recent economic data. Jobless claims remain at their lowest levels since 1969 and retail sales bounced back in March, but neither were good enough to suggest that the economy is overheating. In fact, the Conference Board’s index of leading economic indicators increased by 0.4% in March, a level that means the U.S. economy should grow by about 2% in 2019, the research group said.”

  • “…And that means everything could come up twos. Not only is the economy growing at around 2%, but inflation also sits near 2%, and the federal-funds rate is just over 2%, observes Torsten Sløk, chief economist at Deutsche Bank. He sees little reason for any of that to change, not even with the risks associated with Brexit or elections in the U.S. and abroad. That means that stocks can continue to benefit from an environment that is neither too hot nor too cold.”

The Wall Street Journal – April 20, 2019 – Driving?  The Kid’s Are So Over It – Adrienne Roberts

  •  “If teenagers are any guide, Americans’ love affair with the automobile may no longer be something car makers can bank on.  The percentage of teens with a driver’s license has tumbled in the last few decades and more young people are delaying purchasing their first car—if buying one at all…About a quarter of 16-year-olds had a driver’s license in 2017, a sharp decline from nearly half in 1983, according to an analysis of licensing data by transportation researcher Michael Sivak.”

  • “Whereas a driver’s license once was a symbol of freedom, teenagers are reaching their driving age at a time when most have access to ride-hailing services such as Uber and Lyft to shuttle them around town. At the same time, social media and video chat let them hang out with friends without actually leaving the house.  When they reach their 20s, more are moving to big cities with mass transit, where owning a car is neither necessary nor practical. And of those who do buy a car, many more than in older generations opt for a used one, according to J.D. Power.”

  • “One reason for that is rising new-vehicle prices. Detroit has jettisoned many of their lower-priced compact and subcompact cars like the Ford Fiesta and Chevy Cruze that have traditionally been starter cars for young buyers. For the auto makers, the strategy makes sense: Sport-utility vehicles or trucks have steadily become more popular over the past decade, and also have much better profit margins.”

  • …Meanwhile, appealing to Gen Zers was part of the motivation behind Ford Motor Co.’s purchase last year of electric-scooter startup Spin, says Sheryl Connelly, Ford’s manager for consumer trends. She said the auto maker is also looking to invest in other urban-mobility ventures such as electric bikes, as well as ride-hailing and car-sharing services.”

U.S. Global Investors - Investor Alert – April 19, 2019 – Frank Holmes 

  • “…Another Tax Day has come and gone. Although it might be some time before we get the full picture of what Americans earned and paid in taxes last year, it’s probably safe to assume that the top 1 percent of earners shouldered most of the U.S. tax burden.   In 2016, the most recent year of available data, the top 1 percent was responsible for over 37 percent of all income taxes. Compare that to the bottom 50 percent, which was responsible for about 3 percent of all taxes.  Of course, the highest earners also paid the highest average income tax rate of 26.9 percent, which is seven times more than the rate faced by the bottom 50 percent.”

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