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The Best of What They Said and I Read Week Ending 9/29/2019

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 – September 27, 2019 – The Dow Dropped for the Week.   Impeachment Was Only Part of It -   Ben Levisohn

  •  “…The market dropped for the second straight week, with the Dow declining 114.82 points, or 0.4%, to 26,820.25, the S&P 500 falling 1%, to 2961.79, and the Nasdaq Composite dropping 2.2%, to 7939.63.  Impeachment makes for riveting television. For markets, the impact is far less clear. From the beginning of Richard Nixon’s impeachment inquiry in February 1974 through his resignation in August that year, the S&P 500 dropped about 13%. But from Bill Clinton’s impeachment in 1998 through his acquittal in the Senate in 1999, the S&P 500 gained 28%.”

  • “Obviously, something besides impeachment is going on—and that’s the market itself. Stocks were already falling when the Nixon impeachment process began, notes Frank Gretz of Wellington Shields, and continued to fall. The market was heading higher before Clinton’s impeachment, and only missed a beat when Long-Term Capital Management nearly took it down. The upshot: “Impeachment sounds serious,” Gretz writes. “It depends—like most things when it comes to the market—on the market.”

  • “…If you’re an optimist, you might note that the S&P 500 is just 2.1% away from an all-time high, despite the dribs and drabs of bad news that have come out in recent weeks. If you’re a pessimist, you point to the fact that the S&P 500 just created a dreaded “double top” and will probably need corporate profit growth to accelerate before picking up again.”

U.S. Global Investors - Investor Alert – September 27, 2019 – Frank Holmes 

  •  “…Indeed, if we look overseas, there’s much more that could rattle markets than U.S. political theater. Germany, for instance, may be on the cusp of recession, if it has not already entered one. The preliminary purchasing manager’s index (PMI) for September shows that the manufacturing sector in the world’s fourth largest economy is contracting at its fastest pace since the depths of the global financial crisis a decade ago. The flash PMI registered 41.4, an alarming 123-month low.”

  • “…According to Jefferies LLC, a 2020 election that pits Trump against Warren could finally crack the U.S. dollar’s multiyear rise by creating a massive spend fest, reports Bloomberg. Brad Bechtel, global head of foreign-exchange, says, “Warren and Trump’s tone would be different but the end result would be the same, massive blowouts of the U.S. government budget.”

  • “…President Trump announced that he has no interest in some partial deal; he wants a full deal…While there were indeed some positive developments this week in the media turnaround on the farm tour and the granting of Chinese waivers for the purchase of U.S. soybeans, and the reiteration that Vice Premier Liu He remains on the schedule…the White House announced late in the week that it was considering restrictions on portfolio flows into Chinese securities—perhaps those listed there, perhaps even those listed here—which obviously at face value seems like a major potential negative for markets, sentiment, and the trade talks. Then again, given the regular shifts in sentiment around tweets, on-again/off-again talks and meetings, tariff hike implementation and delays, etc. the late-breaking announcement from the White House on Friday may also just be designed to ratchet up pressure and up the ante heading into the upcoming high-level talks and around the week-long Chinese holidays.”

  • “…The U.S. dollar hit new 52-week closing highs this week, which, as noted in the past, could continue to exert a degree of pressure on emerging markets.”

Bloomberg BusinessWeek - September 23, 2019 – Bracing for A Beer Run – Lisa Du and Grace Huang 

  •  “Japan’s bars are lining up extra brews ahead of rugby’s biggest tournament.  As fans prepare to descend on Japan for the Rugby World Cup, there’s one question organizers are asking:  Will there be enough beer?”

  • “Watching rugby and drinking beer go hand in hand.   While the Japanese like beer – they drank 53.5 liters per person in 2018 – the British, Australians, and Irish, some of the sport’s biggest aficionados, typically consume about double that amount.   About of a third of ticket sales have gone to overseas fans, mostly from those countries.  Foreigners are expected to drink about four times as much as Japanese spectators, according to the organizing committee.  That has brewers, distributors, and bars in Japan taking steps to avert a shortage, as the six-week competition gets under way on Sept. 20 for the first time in Asia.”  

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