HIGHLIGHTS

• US and international stocks were up by 2.71% and 1.77%.
• Trade news on China appears to be moving in the right direction.
• A government shutdown is avoided.
• Economic news has generally been negative.

MARKET RECAP

US stocks were up by 2.71% and international stocks advanced by 1.77%. The Dow Jones Industrial Average is now on an 8-week winning streak. Stocks were helped by positive news on China. Trump said if negotiations with China are going well, he would consider delaying the deadline before the next increase in tariffs are scheduled to start: “If we’re close to a deal…I could see myself letting that slide for a little while.” Congress agreed on a compromise to avoid another shutdown, although Trump then went on to declare a “national emergency” to try to get the balance of the funding for his wall that was not included in the compromise bill.

ECONOMY

The market continues to go up despite economic news that has been negative. The OECD US Composite Leading Indicator fell by 0.2 to 99.4 in December, it was the eighth straight decline and the lowest level since October of 2016, indicating below-trend growth. The six-month annualized rate of change is declining at the fastest pace since January of 2016.

Retail sales for December came in way below expectations. The data was delayed to the government shutdown. The number showed a 1.2% month over month decline, which would be the biggest drop since September of 2009. However, many economists are of the opinion that the number just does not add up with the other reports from December, in other words, there is a mistake in the data. The retail sales report is often subject to big revisions so time will tell.

As a result of the weak retail sales report, the Atlanta Fed’s GDPNow model dropped forecasted Q4 growth from 2.7% to 1.5%. Obviously, a big negative change.

Job openings hit an all-time record in December. Openings were greater than the number of unemployed by 1.04 million. However, jobless claims were up by 4,000 to 239,000 last week. The last couple of weeks have been higher than the prior trend. The four-week moving average is at its highest point since January of 2018.

AMAZON

Amazon backed out of their plan to move to NYC after weeks of protests. The proposed deal, that was negotiated by the Governor and the Mayor, included about $500 million in capital grants and about $2.5 billion in incentives. The $3 billion investment would be over 10-years, but the payoff would be $27 billion in tax revenue over 20-years, 25,000 jobs at an average pay of $150,000 per year, plus all of the positive multiplier effects from having what is probably the world’s best-run business and technology company in NYC.

But that wasn’t good enough for many of the politicians and “progressives”, who immediately went into attack mode from the day the deal was announced. There were problems with the proposed deal. Mainly that local leaders were kept out of the loop as the Governor and Mayor conducted the negotiations. And then an argument could be made that New York gave away too much to lure Amazon in. But even with that, this was a huge win for NYC and $27 billion in tax revenue for a $3 billion dollar investment over 10-years adds up to a positive present value at just about any discount rate!

The political backlash against Amazon was overwhelming, and on Thursday, the Company announced it would pull out of the deal. Incredibly, the activists and politicians celebrated, as if they had accomplished something good for their community. Here is what Representative Alexandria Ocasio-Cortez (AOC) said, “We were subsidizing those jobs, the city was paying for those jobs, so frankly, if we were willing to give Amazon $3 billion for this deal we can invest those $3 billion in our district ourselves if we wanted to.”

So according to AOC, New York can now go and spend that $3 billion in the local community, right? Wrong! You would think that a member of Congress from New York would understand basic financial math. Apparently not. What the Representative from New York does not understand is that with the exception of the $500 million in capital grants, the remaining $2.5 billion was structured mostly as tax breaks out of future tax revenue that, guess what, does not exist now. $27 billion in future tax revenue was just lost.

NY Governor Cuomo said “a small group of politicians put their own narrow political interests above their community – which poll after poll showed overwhelmingly support…above the state’s economic future and the best interests of the people of this state. The New York State Senate has done tremendous damage. They should be held accountable for this lost economic opportunity.”

The real message here is the danger that is lurking on the extremes in both political parties in the US. It manifests itself in different ways. On the Democratic extreme left, attacks on business and wealth creation may make great politics, but it is bad for the economy and the very people that these politicians supposedly represent. Creating an unfriendly and extremely difficult environment for business will mean less of it.

As the saying going, “be careful what you wish for, you might just get it.” Well, New York just got it.

SCOREBOARD

Past performance does not guarantee future results.

The purpose of this commentary is to provide readers with a summary of recent market and economic news. It is not intended to provide trading advice. Investors should have a long-term plan and should consider working with a professional investment advisor. Any discussion of investments and investment strategies represents the presenter’s views as of the date created and are subject to change without notice. The opinions expressed are for general information only and are not intended to provide specific advice or recommendations for any individual. The information and opinions contained in this material are derived from sources believed to be reliable, but they are not necessarily all inclusive and are not guaranteed as to accuracy. Any forecasts may not prove to be correct. Economic predictions are based on estimates and are subject to change. Reliance upon information in this material is at the sole discretion of the reader.

HIGHLIGHTS

• US stocks managed a small advance, but international equities fell.
• Worries about the global economy and trade talks hurt the market.
• Growth forecasts in Europe and the UK are revised down.
• Jinping and Trump won’t meet this month.
• Stocks cannot break through the 200-day moving average.

MARKET RECAP

A rally in the final 10-minutes of the Friday session helped the US markets eke out 0.17% gain for the week. Stocks were up on Monday and Tuesday, flat on Wednesday and weak on Thursday and Friday on worries about the global economy and trade talks between the US and China. International stocks fell by 1.18%.

On Thursday, the European Commission lowered its growth forecasts for Germany, Italy, and the Netherlands. Overall, the European Union GDP is now forecast to grow by 1.5% in 2019, down from 1.9% in the prior forecast. The Bank of England cut growth forecasts to 1.2% for 2019, down from 1.7%, and warned that a no-deal Brexit could cause a recession.

Markets were also disappointed when Trump said he would not be meeting with Chinese President Xi Jinping until March. A meeting between the two would signal that an agreement was close at hand. White House economic adviser Larry Kudlow said that an agreement between the two countries is still “far away.”

From a technical perspective, the market appears to have lost near-term momentum. The S&P 500 closed just under the 200-day moving average on Monday and Tuesday but failed to crack it, falling back on Wednesday, Thursday and Friday. Another negative sign for stocks was the out-performance this week by the defensive groups like utilities and REITs as interest rates fell.

ECONOMY

While the US did have a positive bounce last month in the purchasing manager’s index, the trend around the world continues to be down. China is already in contractionary territory and the rest of the world is not far behind.

The ISM Non-Manufacturing Index in the US also declined in January, although the absolute number was still strong. The index declined to 56.7 from 58. New export orders took the biggest hit, dropping to 50.5 from 59.5, more proof of a slowing global economy.

Given the continuing decline in economies around the world, it will become more difficult for recent growth in the US to continue.

A possible early sign of a slowing US economy is light vehicle sales, which fell by 5.1% in January to an annual rate of 16.6 million, the lowest level since August of 2017. Severe weather in the Midwest is getting some of the blame. Year over year, there was a 3% decline.

Jobless claims fell last week to 234,000, down from the big increase the previous week to 253,000.

SCOREBOARD

Past performance does not guarantee future results.

The purpose of this commentary is to provide readers with a summary of recent market and economic news. It is not intended to provide trading advice. Investors should have a long-term plan and should consider working with a professional investment advisor. Any discussion of investments and investment strategies represents the presenter’s views as of the date created and are subject to change without notice. The opinions expressed are for general information only and are not intended to provide specific advice or recommendations for any individual. The information and opinions contained in this material are derived from sources believed to be reliable, but they are not necessarily all inclusive and are not guaranteed as to accuracy. Any forecasts may not prove to be correct. Economic predictions are based on estimates and are subject to change. Reliance upon information in this material is at the sole discretion of the reader.

HIGHLIGHTS

• Stocks rally on a market-friendly Fed press conference.
• Another strong jobs report.
• Estimated earnings for 2019 continue to be sharply cut.
• Howard Schultz may run for President and Corey Booker is.

MARKET RECAP

Stocks advanced and were helped mightily by a Fed press conference mid-week. Fed Chairman Jerome Powell said, “I would want to see a need for further rate increases,” referring to an increase in inflation. And then to make it even better, the Fed signaled that they would maintain their balance sheet at a higher level than previously thought, indicating that the unwind of the balance sheet might be coming to a close. It was just about everything the market could ask for, and stocks shot up by 1.51% on the day. For the week, US stocks increased by 1.66% and international equities were up by 0.91%. Bonds were up on the week by 0.27% but fell on Friday on the news of a very strong jobs report.

The market has rallied by 15.9% off of the December low and is now at the midpoint between the range that was established through most of October and all of November.

JOBS / ECONOMY

The US job market made it 100 straight months of increased payrolls. Nonfarm payrolls  rose by 304,000. It was the biggest increase since February of 2018. Wages were up by 3% year over year. That is six months in a row of increases at or greater than 3%. The unemployment rate did increase to 4% from 3.9% in December, but the government shutdown probably impacted that number. The share of American adults working or looking for work increased to 63.2%, up 1/2% from last year. This indicates that the strong job market is pulling in workers that have been sidelined, a positive development for the economy.

In more good news, the ISM Manufacturing Index climbed 2.3 points in January to 56.6, the biggest increase in five months.

One weak datapoint was jobless claims. After falling to a stunningly low 199,000 last week, they shot up to 253,000 this week. That was the highest level since September of 2017. The government shutdown will get the blame for now.

Overseas, the economic reports are still coming in weak. The Markit January Manufacturing PMIs fell. Emerging markets are now at an even 50.0 versus 50.5 last month, and developed markets fell to 52.2 from 52.9, greater than 50 is considered expansionary. Italy fell into a recession.

FUTURE ESTIMATED EARNINGS

Analysts continue to aggressively cut future earnings estimates. 2019 estimates are now at $169.60, down from a peak of $178.90 in September. That is down 5.2% in about 5-months. Estimates have now been cut eight-weeks in a row and 16 of the last 17 weeks.

HOWARD SCHULTZ / CORY BOOKER

Howard Schultz, a lifelong Democrat, announced that he might run for president as an independent in 2020. The reaction was instantaneous and vicious. Democrats and the media establishment went on a rampage trashing Shultz in every way possible, from his intellect to his wealth to the way he ran Starbucks. Most of the “comments” and accusations were caricatures and inaccurate. But that is what goes for public discourse nowadays. With both parties currently ruled by the extremes, it would appear there is an opening for someone close to the center. Schultz will test the waters and consider filling that gap.

Cory Booker announced that he will run for president. Booker’s initial comments were positive and focused on uniting the entire country, “We used to be a people who could look at the sky, point at the moon and change it from a dream to a destiny. There’s no Democratic or Republican way to get there. You definitely don’t get there by fighting each other, tearing each other down or dividing people against each other.” Booker joins a field that includes Kamela Harris, Elizabeth Warren and Kirsten Gillebrand.

SCOREBOARD

Past performance does not guarantee future results.

The purpose of this commentary is to provide readers with a summary of recent market and economic news. It is not intended to provide trading advice. Investors should have a long-term plan and should consider working with a professional investment advisor. Any discussion of investments and investment strategies represents the presenter’s views as of the date created and are subject to change without notice. The opinions expressed are for general information only and are not intended to provide specific advice or recommendations for any individual. The information and opinions contained in this material are derived from sources believed to be reliable, but they are not necessarily all inclusive and are not guaranteed as to accuracy. Any forecasts may not prove to be correct. Economic predictions are based on estimates and are subject to change. Reliance upon information in this material is at the sole discretion of the reader.

HIGHLIGHTS

• US stocks fall slightly.
• The S&P is up by 13.34% since the December 24th low.
• The government reopens for at least three weeks.
• Tax proposals by the Democratic left.
• More chaos in Venezuela.
• The LEI declines.
• Jobless claims hit the lowest level since 1969.

MARKET RECAP

US stocks fell slightly, down 0.13%, while international equities were up by 0.54%. Bonds advanced by 0.31%.

ONE MONTH LATER

It has been one month since the market low on December 24th. At that point, the S&P 500 had fallen by over 15% during a 14-day period. A descent of 15% or more over a 14-day period had happened 7 other times since 1970. In all but one of those cases, the market had a nice rally in the subsequent one-month period. In this instance, the S&P finished up by 13.34%, which ranks second on the list.

GOVERNMENT REOPENED

The government shutdown ended as Trump and congressional leaders reached a deal to reopen the government for three weeks. Trump did not get any of the funding for the wall that he demanded.

TAX PROPOSALS…

In recent weeks proposals for tax increases from the far left of the Democratic party have been picking up steam. First, Alexandria Ocasio-Cortez (AOC) put a 70% marginal tax rate on the table and now Elizabeth Warren has come out in favor of a wealth tax. 70% marginal rates were the standard in the 60s and 70s. Of course, the tax code was taken advantage via loopholes and tax shelters to make sure that essentially no one came close to paying that. The entire idea behind lowering rates in the Reagan era (80s) was to simplify the tax code and take away incentives that did not make economic sense. That set off a long period of positive growth. But if anyone thinks the 70s are the economic period to emulate they need to look again. That is not to say we don’t need some tax increases and tax reform. We do. But ideas like a wealth tax are what one might expect from countries like Venezuela…

VENEZUELA

Speaking of, Venezuela continues to spiral out of control. The opposition leader, Juan Guaido, declared himself president. The military said it still supports current president, Nicolas Maduro. Street protests demanding Maduro’s resignation are constant and nationwide. Years of hardcore socialism from Chavez and Maduro have turned the country into a complete, economic and social disaster.

LEI

The Conference Board Leading Economic Index fell by 0.1% to 111.7 in December. “The US LEI declined slightly in December and the recent moderation in the LEI suggests that the US economic growth rate may slow down this year,” said Ataman Ozyildirim, Director of Economic Research at The Conference Board. “While the effects of the government shutdown are not yet reflected here, the LEI suggests that the economy could decelerate towards 2 percent growth by the end of 2019.”

JOBLESS CLAIMS

Incredibly, initial claims for unemployment insurance dropped 13,000 last week to 199,000, the lowest level since November 1969. The previous week was revised down by 1,000 to 212,000 claims. The four-week average of claims fell 5,500 to 215,000, also near its lowest level since 1969, as labor market conditions remained tight.

SCOREBOARD

Past performance does not guarantee future results.

The purpose of this commentary is to provide readers with a summary of recent market and economic news. It is not intended to provide trading advice. Investors should have a long-term plan and should consider working with a professional investment advisor. Any discussion of investments and investment strategies represents the presenter’s views as of the date created and are subject to change without notice. The opinions expressed are for general information only and are not intended to provide specific advice or recommendations for any individual. The information and opinions contained in this material are derived from sources believed to be reliable, but they are not necessarily all inclusive and are not guaranteed as to accuracy. Any forecasts may not prove to be correct. Economic predictions are based on estimates and are subject to change. Reliance upon information in this material is at the sole discretion of the reader.

Our Quarterly Market Outlook/Review Webinar, titled “Crazy Mr. Market”,  was just published on January 20. Please view the link below as we discuss.

1. Market Performance
2. Current economic conditions.
3. Equity valuations.

As always, feel free to contact us with any questions.

Link to the Webinar

HIGHLIGHTS

• Stocks are up again, +2.87% in the US and 1.97% x-USA.
• It is still early, but earnings reports have been positive, sales have been mixed.
• Economic reports slightly on the negative side.
• Investment legend Jack Bogle passes.

MARKET RECAP

US stocks fell slightly on Monday, and then rallied the remainder of the week to finish up by 2.87%. International equities advanced by 1.97%. Bonds fell by 0.19%. The S&P 500 is off to its 6th best start of all-time at +6.5%. Small-cap stocks are up by 10.03%. Since the low on December 24th, the S&P is up by 13.6%.

Stocks were helped by progress on trade talks between the US and China and by earnings reports. It is still very early in the earnings season, 69% of companies have reported earnings higher than the consensus and 49% have beaten sales estimates. Companies that have reported have generally had a favorable reaction in the market. This is the opposite of last quarter, where even positive reports were often ignored or sold on. However, guidance going forward has been more negative than positive.

ECONOMY

There was actually a positive report this week. The Philly Fed General Business Activity Index hit a three-month high, up by 7.9 points to 17.0. New orders increased at the fastest rate in six months. But managers were less certain about orders going forward. However, the Empire Manufacturing report came in much less than the estimate, 3.9 versus 10.0 and down from 10.9. Overall last week, economic indicators slightly missed projections.

The labor market remains very strong. Jobless claims came in at 213,000, that is near historical lows.

The news was worse in China. Imports and exports are falling. Imports were down by 7.6%.

JACK BOGLE

Investment legend Jack Bogle passed this week. Jack was the founder of Vanguard and essentially invented the index fund. His efforts at reducing costs and making investing more efficient have saved investors billions. His common-sense approach to investing inspired legions of followers and it can be said that he, more than anyone else, has single-handily changed the way people invest.

SCOREBOARD

Past performance does not guarantee future results.

The purpose of this commentary is to provide readers with a summary of recent market and economic news. It is not intended to provide trading advice. Investors should have a long-term plan and should consider working with a professional investment advisor. Any discussion of investments and investment strategies represents the presenter’s views as of the date created and are subject to change without notice. The opinions expressed are for general information only and are not intended to provide specific advice or recommendations for any individual. The information and opinions contained in this material are derived from sources believed to be reliable, but they are not necessarily all inclusive and are not guaranteed as to accuracy. Any forecasts may not prove to be correct. Economic predictions are based on estimates and are subject to change. Reliance upon information in this material is at the sole discretion of the reader.

HIGHLIGHTS

• US stocks up by 3% and international stocks by 2%.
• The V-shaped recovery is now at an important technical point.
• High-yield spreads have fallen by almost 1%.
• Earnings continue to decline week by week.
• Some brick and mortar stores sales were much less than originally thought.
• Ford to cut jobs in Europe.

MARKET RECAP

It was another strong week in equity markets around the world. US stocks advanced by 3.06% and international markets rose by 2.06%. Stocks closed higher than they opened every day this week, and on Thursday and Friday, the market closed at the high for the day.

So far it has been a sharp “V” shaped recovery in prices, but we are now essentially back to the point where stocks fell through support on December 14 (see 8 below). The support level of about $133 (on the VTI) now is resistance. This is an important technical level and how the market reacts to it may give a hint to where we go from here. Although stocks did close at the high on Friday, they could not crack the Thursday high.

When stocks fell on December 24th by about 2.7% the S&P 500s 10-day advance/decline line was measured at -2,440 according to the Bespoke Investment Group, the lowest level since 2011 and indicative of extreme negative sentiment. As of Wednesday, the level was at 1,938. The positive change of 4,378 was the largest ever.

After the market fell through support on December 14, the drop accelerated the following week when investors perceived that they did not get the “dovish” increase in interest rates that they were hoping for. Since then, the Fed has walked back on those comments and is now in the camp of responding to the data, watching the markets and being patient.

Another big drag on stocks has been the threat of a trade war. News on that has also improved. The US and China have continued recent talks on settling the dispute.

While news on the Fed and China have improved, the government shutdown continues and is now the longest ever. Expect the heat on that to begin to ramp up quickly. Merrill Lynch estimates that the shutdown costs the economy 0.1% in growth every two weeks.

HIGH-YIELD

The recovery in equities has been matched, may be exceeded, by that in high-yield. The US High Yield Option-Adjusted Spread which ballooned to a high of 5.44% on January 2, has now fallen by almost 1% to 4.54%. The dramatic fall in rates is reflected in the rally by the Invesco Senior Loan ETF (BKLN) that we highlighted back on November 23.

EARNINGS

Earnings estimates for the S&P 500 (source: Refinitiv) continue to fall week by week. 2019 estimates are down by 3.8% since the September 7 peak.

RETAIL

Initial reports of a strong holiday season for some brick and mortar retailers turned out to be false. “The holiday season began strong – particularly Black Friday and the following Cyber Week, but weakened in the mid-December period,” according to Macy’s Chief Executive Jeff Gennette. Macy’s said same-store sales were up by 1.1% for November and December but lowered their sales and profit forecasts for the current year ending in February. The stock fell 2.64% on the news and was joined by retailers like Kohl’s, L Brands and JC Penny.  The news from Target was positive, sales were up by 5.7% from November 4 through January 5 and Costco had a 7% increase for the five weeks ended January 6.

FORD CUTTING JOBS IN EUROPE

Ford has begun talking to trade unions about cutting thousands of jobs in Europe as it cancels production of unprofitable models. The move is part of a company-wide cost-cutting program to help adapt to the fast-changing dynamics of the auto industry, specifically electric vehicles and autonomous driving. The move has been amplified in Europe with a slowing economy that has been impacted by Brexit and an economic slowdown in China.

In addition, Jaguar Land Rover, is expected to cut 5,000 jobs due to weak demand from China and a decline in diesel sales in Europe.

SCOREBOARD

Past performance does not guarantee future results.

The purpose of this commentary is to provide readers with a summary of recent market and economic news. It is not intended to provide trading advice. Investors should have a long-term plan and should consider working with a professional investment advisor. Any discussion of investments and investment strategies represents the presenter’s views as of the date created and are subject to change without notice. The opinions expressed are for general information only and are not intended to provide specific advice or recommendations for any individual. The information and opinions contained in this material are derived from sources believed to be reliable, but they are not necessarily all inclusive and are not guaranteed as to accuracy. Any forecasts may not prove to be correct. Economic predictions are based on estimates and are subject to change. Reliance upon information in this material is at the sole discretion of the reader.

Meb Faber on the CAPE ratio.

HIGHLIGHTS

• Another up and down week but stocks end in the black on a powerful labor report.
• Chinese PMI falls below 50.
• US PMI for manufacturing has a big drop to 54.1.
• A very strong payroll report in the US as nonfarm payrolls increased by 312,000.
• Economic growth in Q4 should be about 2.5%.

MARKET RECAP

2018 closed out on Monday with a 1% advance on news that the US and China were talking trade. When markets reopened on Wednesday after the New Year, a dreadful Chinese PMI report had the market fall by 1.5% on the open. But the market staged a strong comeback and closed just above the Monday close fueled by an oil price rally. Having somehow managed to withstand the poor PMI report from China, stocks took another punch on Thursday when Apple preannounced that sales had fallen sharply in Q4, by about $6 billion. That was followed by a US ISM Manufacturing report that showed the PMI at 54.1%, down from 59.3% in November, the market fell sharply by 2.31%.

The news going into the release of the Friday unemployment report was downright depressing, as it appeared the economy was beginning to accelerate much faster to the downside than anticipated. That is when economists were surprised with a much stronger than anticipated employment report. Investors loved the news as it put the threat of a recession on hold, at least for one day, and stocks rallied by 3.31%. For the week, US stocks were up by 1.95% and international markets were up by 2.14%

Looking back at the year 2018, the US was down by 5.21% and international markets fell by 14.43%.

PAYROLL

Nonfarm payrolls jumped by 312,000 in December, blowing out the consensus number of 176,000. It was the biggest increase since February. Even better, the prior two months were revised up by 58,000. The average workweek increased by 0.1 hours to 34.5 hours and average hourly earnings were up by 3.2% year over year. The unemployment rate did go up to 3.9% from 3.7%, but that was because more people were attracted to enter the labor market.

Institute for Supply Management PMI

The PMI for the US for the manufacturing sector fell to 54.1% in December from 59.3% in November. That is a large drop and was well below the consensus of 58%. The report indicates that while manufacturing is still growing, the pace of the increase slowed in December. A reading above 50 is considered expansionary.

CHINA

The trading year got off to a bad start on Tuesday morning when the China Caixin manufacturing purchasing managers index fell to 49.7 in December. It was the first drop below 50 since May 2017. A reading below 50 is considered contractionary.

ECONOMY

Q4 growth is estimated to come in around 2.5% or so. The Atlanta Fed GDPNow model has growth at 2.7% and the NY Fed NowCast model is projecting 2.48%.

SCOREBOARD

Past performance does not guarantee future results.

The purpose of this commentary is to provide readers with a summary of recent market and economic news. It is not intended to provide trading advice. Investors should have a long-term plan and should consider working with a professional investment advisor. Any discussion of investments and investment strategies represents the presenter’s views as of the date created and are subject to change without notice. The opinions expressed are for general information only and are not intended to provide specific advice or recommendations for any individual. The information and opinions contained in this material are derived from sources believed to be reliable, but they are not necessarily all inclusive and are not guaranteed as to accuracy. Any forecasts may not prove to be correct. Economic predictions are based on estimates and are subject to change. Reliance upon information in this material is at the sole discretion of the reader.

This is a holiday-shortened commentary. We wish everyone a Happy New Year! Please feel free to contact us with any questions or comments. 

MARKET RECAP

You didn’t have to visit Disney to go on one world-class roller coaster ride this week. The chart below from Marketwatch says it all. Stocks got off to a terrible start to the week on Monday, dropping by 2.7%. Trading resumed on Wednesday, after Christmas, with the biggest one day climb in terms of points for the Dow, over 1,000 (but not in terms of percentages). Thursday started down and ended with another monumental comeback. And on Friday, stocks were mixed. But for the week, US equities were up by just under 3% and international stocks by just under 2%.

The technical action looked good from Wednesday on. And it was similar to what we have seen at the low point of other market downturns. But three days is not nearly enough to say that a bottom is in, and it might just be a fake out.

Where we go from here will be impacted by political decisions in Washington. To give the economy and the markets a fighting chance we have to avoid a fumble by the Trump administration, especially regarding the trade war in China and the government shutdown. We want global markets that will grow, not contract. The Fed will have to do its part and keep interest rates in line with how the economy is responding.

There was some good economic news this past week in the US. The preliminary retail reports showed a strong holiday season.

SCOREBOARD

Past performance does not guarantee future results.

The purpose of this commentary is to provide readers with a summary of recent market and economic news. It is not intended to provide trading advice. Investors should have a long-term plan and should consider working with a professional investment advisor. Any discussion of investments and investment strategies represents the presenter’s views as of the date created and are subject to change without notice. The opinions expressed are for general information only and are not intended to provide specific advice or recommendations for any individual. The information and opinions contained in this material are derived from sources believed to be reliable, but they are not necessarily all inclusive and are not guaranteed as to accuracy. Any forecasts may not prove to be correct. Economic predictions are based on estimates and are subject to change. Reliance upon information in this material is at the sole discretion of the reader.