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The Best of What They Said and I Read Week Ending 9/2/18

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  – August 31, 2018 – Stocks Roll Through Summer’s End.  But Now Comes September  – by Randall W. Forsyth

“…That is especially so for stock investors, with the S&P 500 and the Nasdaq Composite posting their fifth straight winning months, with respective gains of 3% and 5.7%, and ending August just shy of records set last Wednesday. The Dow Jones Industrial Average added 2.2% for the month but ended 2.4% short of January’s peak. By Wilshire Associates’ calculation, August left investors in U.S. stocks richer by approximately $1.1 trillion.”

“…Then there’s the calendar. To paraphrase Mark Twain, September is a peculiarly dangerous month to speculate in stocks. Since 1950, it has been the worst month of the year for the Dow and the S&P 500, with average respective declines of 0.7% and 0.5%, according to the Stock Trader’s Almanac, with similar dismal records for the Nasdaq and the Russell 1000 and 2000 in their shorter histories. September also has seen historic events, like 9/11 and the Lehman Brothers bankruptcy in 2008, which resulted in respective declines in the Dow of 11.1% and 6%, although the worst performing September was in 2002, which saw a 12.4% drop in the dot-com bust bear market.”

The Kiplinger Letter – August 31, 2018

"…The Trump administration is upping the ante in its hardball trade tactics. Trade officials are betting heavily on the U.S.’s outsize economic clout to get Canada and China to yield to demands. After reaching a bilateral deal with Mexico, hailed by U.S. officials as a revised North American free trade pact, President Trump is telling Canada to quickly sign up or be left behind. If Ottawa fails to join, Trump says new tariffs will hit Canadian-built autos sold in the U.S. As we went to press, it was still unclear whether Canada would give in to Trump. Washington is sending a clear signal it wants to reorder global trading rules.”

“…Though factories are humming right now and the rest of the year looks solid… A few clouds are gathering for manufacturers, all worth paying attention to. Rising interest rates will make borrowing more costly. Stricter immigration policies will make it harder to find skilled workers when labor markets are already tight. And there will be more protectionism from key trading partners against U.S. exports. Tariffs are already acting as a drag, especially the tit for tat with China. Beijing has launched retaliatory duties for each round of U.S. tariffs, causing prices of raw materials to rise. That has manufacturers worried about price increases that they’ll have to pass on to customers, who might go elsewhere for cheaper products. The end result: Manufacturing will cool a bit in 2019 as growth moderates in the face of the waning benefit of corporate tax cuts and the looming headwinds."

U.S. Global Investors  – August 31, 2018 by Frank Holmes

“It was the best of times, it was the worst of times. A tale of two world leaders, U.S. president Donald Trump and China president Xi Jinping—both of whose countries have among the world’s best economies right now. But whereas Xi is playing Santa Claus to the rest of the world, doling out loans to finance-starved countries, Trump is playing Scrooge, waging an economic war with Canada, the European Union, China and others.”

“…Post-World War II, it was the U.S. that led global trade and infrastructure build-out—the Marshall Plan in Europe, the Interstate Highway System domestically. Both projects required massive amounts of commodities and raw materials, and employed hundreds of thousands of people.  Today, of the two leaders mentioned above, it’s Xi who has a clear foreign policy when it comes to trade and infrastructure.”

 “…Cryptocurrencies are a hit in higher education. A recent survey conducted by Coinbase found that 42 percent of the world’s top 50 universities, including Stanford, Cornell and Harvard, now offer one or more courses on blockchain or cryptocurrencies. Cornell leads the bunch, offering as many as 28 courses, with titles such as “Introduction to Blockchains, Cryptocurrencies and Smart Contracts.” The survey also showed that 18 percent of U.S. college students presently own at least one type of digital currency…”

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