Weekly Market Snapshot – October 28, 2019

Created by: Sam Tenney

Talks between China and US officials continued over the weekend of October 28th and agreed to finalize and sign an agreement on November 16th and 17th, China is expected to ask for a reduction in existing tariffs while the US is expected to ask for increased agricultural exports to China, including Pork. There is no guarantee that the agreement will actually be finalized but these are hopeful signs.¹
Durable goods orders fell 1.1% in October with orders in the automotive and aeronautics industries led this fall. When durable goods orders fall it indicates businesses may be investing less in capital goods, signaling a reduction in business investments.²
The National Retail Federation expects holiday retail sales to increase between 3.8% and 4.2% over the coming holiday season.³

SOURCES

1. https://seekingalpha.com/news/3509524-china-seek-removal-u-s-tariffs-ret…

2. https://www.marketwatch.com/story/durable-goods-orders-fall-11-business-…

3. https://nrf.com/media-center/press-releases/nrf-forecasts-holiday-sales-…

4. weekly_market_recap.pdf JP Morgan Weekly Market Recap October 28th, 2019

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This blog is general communication being provided for informational purposes only. This information is in no way a solicitation or offer to sell securities or investment advisory services. It is educational in nature and not to be taken as advice or a recommendation for any specific investment product or investment strategy. This does not contain sufficient information to support an investment decision. Any investment or investment strategy mentioned may not be suitable for all investors or in their best interest. Statistical information, quotes, charts, references to articles or any other quoted statement or statements regarding market or other financial information is obtained from sources which we believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. All rights are reserved. No part of this blog including text, graphics, et al, may be reproduced or copied in any format, electronic, print, et al, without written consent from Fidelis Wealth Advisors, LLC. Fidelis Wealth Advisors does not provide legal or tax advice. Please be advised to consult with your investment advisor, attorney or tax professional before making any investment decisions.

Fidelis Wealth Advisors invites you to join us for our annual holiday party and open house.

We are hosting a holiday drive for a local charity, A Precious Child.

See below for more details about the charity and the list of acceptable donations.

Click here to RSVP or signup to donate a gift

Please donate the following items:

Infant Toys
Barbie Dolls
Arts & crafts
Legos
Hot Wheels
Sports balls & equipment
Cologne & body spray
Broncos gear
Bath & body works items
Jewelry
Nerf Gear

Remote control cars
Coats & winter Gear
Board Games
“Dress up” toys
Books for children & teens
Superhero figurines
Giftcards for teens
New and gently used clothing
Baby products (diapers, wipes, powder, etc)
Blankets

A Precious Child assists children and families facing difficult life challenges such as abuse and neglect, crisis situations and poverty. We work with more than 440 Agency Partners throughout eight Denver Metro counties including Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson and Weld to identify children and families in the most need of our services. Our core initiatives help build the whole child. In addition to meeting basic human needs through our Resource Center and Boutiques (satellite resource centers), we also help children and their families navigate community resources. This work is done through our COR (Child Outcomes Resource) Center where our Child Outcomes Advocates provide personalized case management to disadvantaged and displaced children and families, connecting them with needed resources, services, opportunities and educational support.

Through our four Key Focus Areas, A Precious Child aims to bridge the gap in children’s education so they can become secure, self-reliant, contributing members of their communities as adults

Click here for more information about A Precious Child

Weekly Market Snapshot – October 21, 2019

Created by: Sam Tenney

On black Friday in 2008 I went to the outlet mall in Castle Rock to score some big holiday deals. You may remember, in the weeks leading up to the 2008 shopping season Lehman Brothers had gone bankrupt, AIG, GM, and Ford all received or were in the process of requesting a massive bailout from the government and the stock market was fluctuating 500 to 800 points up and down it seemed daily.

To my surprise, the activity at the outlet mall was incredible. There were cars parked everywhere and there was a line of lights from cars backed up for miles on I-25 to get to the outlets. I thought to myself, “This doesn’t seem like the type of activity you’d see if the economy is struggling that badly.” Perhaps I was naive, or maybe more activity was focused on discount retailers given the recent events and shoppers were seeking “deals” anticipating harder times ahead. Either way, sometimes what we observe and what is happening don’t seem to align.

Consumer confidence can sometimes be misleading. For example, the chart below takes the University of Michigan Consumer Confidence Index (which measures how individuals feel about their own financial situation) versus the Conference Board’s Consumer Confidence Index (which measures how they feel about the overall economy). This chart takes the reading from the U of M index minus the Conference Board’s index. When consumers are concerned about their own situation but feel better about the overall economy the measures diverge and the chart plummets. The composite indicator typically reaches a low prior to recessions, and it currently is lower than at any other time since 1979. We see this as an additional indicator to stay defensive at this time.

Chinese Gross Domestic Product growth has slowed again to 6.0% year over year, the lowest in two decades. This has been impacted by Chinese policy maker efforts to slow down on excessive credit growth.¹
Market rates for 2-year treasuries have completely priced in another rate cut at the Federal Reserve Open Committee meeting for October 29th. As of October 18th, the yield curve has flattened on the 3-month to 10-year marks and is less than a 10 basis-point spread on the 3-month to 2-year.²
The S&P finished the week at 0.55% growth, with the Dow slightly trailing at 0.30% growth. High trade expectations and earnings led early gains, but were cut short end of week by Boeing and Johnson & Johnson legal troubles.³

SOURCES

1. https://www.bloomberg.com/news/articles/2019-10-18/china-economic-growth…

2. https://www.ft.com/content/06954916-f083-11e9-ad1e-4367d8281195

3. https://www.marketwatch.com/story/stock-index-futures-struggle-for-direc…

4. weekly_market_recap 10-14.pdf

Weekly Market Snapshot – October 14, 2019

Created by: Sam Tenney

The Dow Jones rose 1.2% and the S&P 500 rallied 0.7% Friday due to possible good news coming from US and China trade talks taking place.¹
Tuesday, October 8th, The Federal Reserve chairman Jerome Powell announced the Federal Reserve intends to rebuild its balance sheet at $60 billion a month until second quarter 2020 for the first time in five years. Powell stated this was not to be confused with the Fed’s quantitative easing practices that ended five years ago, but is a separate operation to keep overnight borrowing rates from spiking long-term.²
Banking and Investment Firms HSBC and Charles Schwab have announced they are laying off around 3% of their collective workforces. Lower margins were cited by management as the reason behind these layoffs.³

SOURCES

1. https://www.marketwatch.com/story/trump-announces-preliminary-trade-deal…

2. https://www.washingtonpost.com/business/2019/10/08/fed-chair-powell-says…

3. https://www.bizjournals.com/buffalo/news/2019/10/09/mums-the-word-on-pot…

4. weekly_market_recap 10-14.pdf

Weekly Market Snapshot – October 7, 2019

Created by: Sam Tenney

The monthly payrolls number of 136k was lower than the median estimate of 145k but revisions to the prior two months added back 45k jobs. Looking at the employment report from a cyclical standpoint, total employment growth increased to 1.44% year over year, remaining in the cyclical downturn starting in January of 2019.¹
The Purchasing Manufacturers Index (PMI) fell to 47.8% for September. This is the second month in a row the US manufacturing sector has been in a contractionary environment. This led to a 1.9% drop for the Dow Jones and 1.8% drop for the S&P 500 on Wednesday, October 3rd²
Many Central Banks met in September, and JP Morgan suggests that the global outlook is trending towards broad based monetary easing. Eurozone PMI fell to 45.7 and Japanese PMI fell to 48.9 for September, further supporting this assessment.³

SOURCES

1. https://seekingalpha.com/research/48075864-eric-basmajian/5359392-daily-…

2. https://www.instituteforsupplymanagement.org/ISMReport/MfgROB.cfm?SSO=1

3. weekly_market_recap JP MORGAN 9-30-19.pdf.

Weekly Market Snapshot – September 30, 2019

Created by: Sam Tenney

China and US trade talks are back on the table, and set to resume October 10th.¹
Going forward, the Federal Reserve Open Committee (FOMC) is divided on further rate cuts for the year. Five members believe rates should go higher, five believe it should stay the same, and seven think it should be lowered again. This could signal further volatility as the FOMC is divided on the market’s direction.²
The size of the Federal Reserve overnight repo operations has been raised from $75 billion to $100 billion. This shows that banks have a larger appetite for day to day liquidity then the Fed initially thought they would need.³
A Duetsche Bank analysis noted that worldwide we currently have the highest debt to Gross Domestic Product (GDP) ratios ever in a peace-time scenario, with global debt to GDP sitting at around 70% led largely by Japan, Greece, and Venezuela. The only other time this ratio has been higher was during World War II, with a 112% Debt to GDP ratio.⁴

SOURCES

1. https://www.cnbc.com/2019/09/26/china-trade-talks-set-to-resume-oct-10.html

2. https://am.jpmorgan.com/us/en/asset-management/gim/adv/insights/weekly-m…

3. https://www.bloomberg.com/news/articles/2019-09-25/n-y-fed-boosts-size-o…

4. https://www.ft.com/content/661f5c8a-dec9-11e9-9743-db5a370481bc

Weekly Market Snapshot – September 23, 2019

Created by: Sam Tenney

At the Federal Reserve open Committee Meeting on Wednesday, September 18th, Chairman Jerome Powell reduced the Federal Funds interest rate 25 basis points to 1.75%. Powell indicated he was open to more easing as the year progresses. ¹
The Federal Reserve has (as of September 20th) conducted 4-days of Repo operations to provide liquidity into the banking sector after banks were hit with a “cash crunch.” This news may erode confidence with regard to liquidity within financial markets.²
Does monetary deceleration by the Fed have a larger impact than the trade war? See the video below of a recent interview with Dr. Lacy Hunt. Dr. Hunt is regarded as one of the best economists around today who can explain the collision between secular economic forces (debt and demographics) and the business cycle better than just about anyone. Take a listen to the 13-minute interview if you have time. ³

SOURCES

1. https://www.marketwatch.com/story/fed-lowers-interest-rate-by-a-quarter-…

2. https://seekingalpha.com/news/3500833-new-york-fed-ramps-repo-operations…

3. https://www.youtube.com/yzDCe5wXuok

Weekly Market Snapshot – September 16, 2019

Created by: Sam Tenney

Retail Sales for August grew 0.4%, for 4.1% growth year-over-year. The rise was driven largely by auto sector sales.¹
The European Central Bank (ECB) Met on August 12th. The European Union (EU) benchmark interest rate was lowered to -0.5%, and the bank outlined plans to restart its easing program by buying 20 billion in bonds monthly.²
The Ford Corporation was downgraded to a junk credit rating with its $35 Billion of corporate bonds on Tuesday, August 10th. This could mean extra pressures in the high-yield bond markets pushing yields higher.³
Attacks on the Saudi Armaco Oil production facility caused a nearly 10% spike in oil prices on Monday, August 16th. One concern is higher oil prices could cause higher fuel prices and slow economic growth.⁴

SOURCES

1. https://www.wsj.com/articles/retail-sales-increased-0-4-in-august-115683…

2. https://markets.businessinsider.com/news/stocks/global-central-bank-sept…

3. https://www.marketwatch.com/story/heres-why-corporate-debt-investors-may…

4. https://www.cnn.com/2019/09/15/business/oil-prices-donald-trump-spr/inde…

CASTLE ROCK ECONOMIC DEVELOPMENT COUNCIL

Fidelis Wealth is proud to be a member of the Castle Rock Community. One of the programs we support as a member of the community is the Castle Rock Economic Development Council (CREDC). As one of the Directing businesses on the voting board we work with the CREDC to grow the community by supporting businesses in the area, growing the local business knowledgebase, and raising awareness of Castle Rock area developments. The CREDC ensures local businesses have access to the resources they need to succeed and expand, including area demographic information and labor data.

Sam is also a member of the Business Retention Committee within the CREDC.

At Fidelis Wealth we like to see the numbers and statistics behind something, so here are some of the great facts about the Castle Rock area;

Castle Rock’s population grew by 19.5 percent from 2010 to 2016 and another 5.1 percent from 2016 to 2017.
Castle Rock is one of the 7 fastest growing cities in America, according to recent U.S. Census Data (May 2017).
Forbes magazine named Douglas County the No. 9 Wealthiest County in the United States. (2016)
CNN Money named Castle Rock the No. 19 Best Places to Live (populations under 50,000) in the United States. (2011).

At Fidelis Wealth we know that Castle Rock is a great place to live and grow our business and we are committed to joining with the CREDC to make our community even better.

“We love the Castle Rock community and Fidelis is committed to its growth and encouraging primary employers to our community. We are happy to be on the board of the Castle Rock EDC.” (Sam Tenney, CFP®, AIF®, Founder of Fidelis Wealth Advisors)

Click here to learn more about the Castle Rock Economic Development Council and find more facts about the area.

Weekly Market Snapshot – September 9, 2019

Created by: Sam Tenney

Non-farm payroll growth has fallen to 8-year lows of 1.56%, while not contractionary this signals a slowing of growth in private employment, which could show further weakness given sufficient economic shocks.¹
Expectations of a 25-basis point cut at the September 17-18, Federal Reserve meeting has been 95% priced into bonds, if it goes through this will be the second rate cut by the Fed this year.²
With only about a dozen S&P 500 Index companies left to report, second quarter 2019 earnings are tracking down 0.4% year over year, although they are above June 30, 2019, estimates (-2.7%) . Forward earnings estimates have fallen 1.8% since June 30 amid tariffs, slower global growth, and a strong dollar.³