Fourth Quarter, 2019- Comments And Opinions
FOURTH QUARTER, 2019 – COMMENTS AND OPINIONS
“Great learning and superior abilities…will be of little value and small estimation unless virtue, honor, truth, and integrity are added to them.” – Abigail Adams, 2nd First Lady of the United States
The Santa of Economic Good Things left a lot of presents under the tree at the end of the Fourth Quarter. With only a few exceptions, such as home buying in the U.S., the packages were bigger this Christmastime. The U.S. and many foreign stock markets gained appreciably during the last quarter of 2019. The S&P 500 Index increased by 8.53%. (1) Gold and oil increased in value. China and the U.S. announced a pending agreement, to be signed on January 15th, which will cancel a scheduled 15% tariff on Chinese goods. China has agreed to buy more American farm products. We are already buying more from them than they buy from us. This is Phase One of a larger agreement. It sets the tone on addressing the very important issue of protecting U.S. intellectual property in China. The theft of industrial and national secrets has been a serious overhanging problem that has not been solved to date. This early portion of the Sino-American trade agreement has been greeted by the markets very favorably. No one wants a trade war.
Our Federal Reserve made its third interest rate cut of the year in October. Then the Fed signaled that it may not adjust short-term interest rates during 2020. Currently the Federal Funds Rate is in the neighborhood of 1.50% to 1.75%. The U.S. Dept. of Labor offered presents with happy news inside. During October employers added 156,000 new jobs. During November we gained 266,000 new jobs. December saw an increase of 145,000 new jobs. (2)
There are several official unemployment numbers issued by the U.S. Labor Dept. The most commonly used report is called U-3. This counts unemployed workers who are seeking work. U-3 was 3.6% of the workforce in October and 3.5% in November. These are extremely good numbers. The most accurate indicator is U-6. This number is higher because it includes all workers who are either unemployed or under-employed. U-6 was 7.0% in October and 6.9% in November (3) – very good numbers indeed. “The trend is our friend” is an old and well-loved mantra of the markets. At the time of this writing most trends are positive. More good news: The Conference Board’s Consumer Confidence Index, which measures consumer optimism, was 126.1 in October, 126.5 in November and 126.5 in December. (4) The University of Michigan’s consumer sentiment gauge rose from 95.5 in October to 96.8 in November to 99.3 in December. (5)
During the Fourth Quarter of 2019 Congress passed and the President signed a new law that will affect retirement plans in America. It’s called SETTING UP EVERY COMMUNITY for RETIREMENT (SECURE) ACT. For those who have not yet attained the age of 70 ½, SECURE changes the age for taking Required Minimum Distributions from their IRAs or other retirement plans to 72. This affects those who will turn 70 ½ during 2020 or later.
To Our Clients and Those Who Are Not Yet Our Clients:
Start off the New Year with a fresh look at your investments and your financial plans. Call us to make an appointment for a complimentary review of your portfolio. Also, come with your financial planning questions.
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Susan Lemieux, Registered Representative, Investment Advisor Representative, Branch Manager
Robert Brimmer, Registered Representative, Investment Advisor Representative, Certified Financial Planner™ professional
Alecia Wright, Registered Representative, BSc Mathematics, University of the West Indies
Disclaimers: The opinions expressed herein are those of Robert Brimmer of Brimmer Financial and are current as of this report’s posting date. This commentary is general in nature and should not be construed as investment advice. Opinions are subject to change with market conditions. The views and strategies may not be suitable for all investors and are not intended to be relied on for legal or tax advice. Please note that any investment involves risk including loss of principal. Interest rate risk is the possibility that the value of an investment will decline as the result of an unexpected change of interest rates. Securities offered through National Securities Corp., member FINRA/SIPC. Advisory services offered through National Asset Management, an SEC Registered Investment Adviser. Fixed Insurance Products offered through National Insurance Corporation.
Sources:  us.spindices.com/indices/equity/sp-500[12/31/19]; , investing.com/economic-calendar[12/31/19];  investing.com/economic-calendar/cbconsumer-confidence-48[1/3/20]; tradingeconomics.com/united-states/consumer-confidence [1/3/20];