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The Best of What They Said and I Read Week Ending 7/15/18

Short excerpts from articles I found interesting.

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

Barron’s  – July 13, 2018 – Nasdaq Hits Record High, Defying Tariffs – by Ben Levisohn

“…The big headline was the Trump administration’s Wednesday announcement of additional tariffs on $200 billion in Chinese goods. The Dow Jones Industrial Average dropped more than 200 points that day, but climbed 562.93 points, or 2.3%, to 25,019.41 for the week. The S&P 500 rose 1.5%, to 2801.31—its highest level in more than five months—and the Nasdaq Composite gained 1.8%, to a record 7825.98.  Are investors ignoring the trade war? Hardly. It’s just that they’ve stopped trading “the market” and have instead focused their bets on stocks and sectors in a way that bears little resemblance to the risk-on/risk-off trading that has been dominant in the post-financial-crisis world.”

 “In a risk-on/risk-off market, everything moves with the market. From 2010 through 2016, the 11 sectors of the S&P 500 had an average correlation of 0.82 with the overall index, explains Nicholas Colas, co-founder of DataTrek Research. (A correlation of one means that two assets move in lockstep.) Since then, correlations have been falling, with the average now around 0.59.  “We went from a market where everything moved largely together to one where sector fundamentals began to matter more than where the S&P 500 was going,” Colas says…”

U.S Global Investors – July 14, 2018 – by Frank Holmes

“…The U.S. is on track to become the world's biggest oil producer. The Energy Information Administration released data on Wednesday showing the U.S. will produce 11.8 million barrels a day next year, putting it ahead of both Saudi Arabia and Russia, the Associated Press reports. This could be a boon for U.S. oil companies if the price of crude holds up.”

“…The prices of goods subject to foreign competition, such as toys and television sets, have tumbled over the past two decades as trade barriers have come down around the world. Prices of so-called non-tradeables, such as hospital stays and college tuition, have surged. Just as globalization has been a headwind holding back inflation, its unraveling could end up being a tailwind in the years ahead, pushing costs higher as countries and companies retreat from the international marketplace. That would be on top of the one-time effect that Trump’s tariffs will have on prices of selected imports, putting pressure on the Fed to raise interest rates at a faster pace than the gradual path it has currently mapped out.”

“…A Bloomberg opinion piece from Noah Smith shows that tightened immigration policies might have been a contributing factor to the stock market crash of 1929. In 1924 immigration was severely curtailed and the result of this dramatic drop in population influx was that it reduced long-term economic growth. Reducing the flow of people also limited the economy. The housing crash in the mid-1920’s might have been a direct result of the tightening of immigration, which then exacerbated the stock market crash in 1929. History can repeat itself if the lessons are forgotten.”

Blue Zones  – July 14, 2018 – Research Says Walking This Much Per Week Extends Your Life

“…“Our bodies were designed to move,” said Dr. David Agus, Professor of Medicine and Engineering at the University of Southern California.  The world’s longest-lived people don’t pump iron, run marathons, or join gyms. Instead, they live in environments that constantly nudge them into moving without thinking about it. They grow gardens and don’t have mechanical conveniences for house and yard work. They have jobs that require them to move or get up frequently. And they walk every single day. Almost everywhere.”

 “In Amish communities in North America, one study showed that the average woman logged 14,000 steps per day and the average man logged 18,000 steps per day, and both genders averaged about 10,000 on their day of rest. These Amish communities also had the lowest rates of obesity of any community in North America. This study eventually hit the media and began the movement to reach at least 10,000 steps per day.”

“Walking benefits:  Activates lymphatic system, Eliminates toxins, Fights infection, Strengthens immunity”

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