July 16, 2019

Market in a Minute

July 16, 2019

Index Performance: As of July 12, 2019

Index

Price

Last Week

YTD

Dow Jones 30

27332.03 1.5%

17.2%

S&P 500

3013.77 0.8%

20.2%

NASDAQ

8244.14 1.0%

24.2%

Russell 2000

7822.64 -1.1%

16.4%

Russell 2000 Growth

7238.45 -0.8%

20.1%

Russell 2000 Value 11357.64 -1.4%

12.5%

Russell 1000 Growth

1602.26 0.7%

24.9%

Russell 1000 Value 1674.61 -0.1%

17.7%

Shanghai SE Index 3,069.43 -2.7%

17.5%

SPDR Gold Shares 133.53 1.1%

10.1%

GS Crude Oil Total

Return

6.45

1.9%

34.7%

Powershares US $ Index

26.19 -0.3%

2.9%

Ishares EAFE Index

65.8

-0.6%

11.9%

iShares Barclays 20+ Yr Treasury Bond

130.22 -1.7%

7.2%

Utilities Select Sector ETF

60.61 -0.1%

14.5%

Vanguard REIT ETF

89.46 -0.2%

20.0%

iShares Mortgage Real Estate

42.93

0.8%

7.5%

Wells Fargo BDC

19.72 -2.0%

11.5%

Alerian MLP ETF

10.12

0.7%

15.9%

iShares Global Telecom

59.03

0.9%

17.6%

ETFMG Alternative Harvest ETF

29.46

-7.2%

18.1%

BitCoin Investment Trust

14.85

1.2%

275.0%

Source: Bloomberg & , Returns are appreciation only.

S&P Sector Performance: As of July 12, 2019

Index

Price

Last Week

YTD

Information Technology

1424.52 1.5%

30.8%

A Word on the Market by Pat Adams, CFA

We are entering the active part of earnings season over the next couple of weeks. Earnings are expected to be down 2.7%. You can see from the chart below estimates have been cut significantly over the past year. Over the past year estimates have been reduced by about -10% for the 2nd quarter of 2019. It does not get much worse unless the economy is in a recession.

The key to the earnings reports is the next quarter guidance and any sort of visibility of the current trends to give the market some confidence that we are going to see a pickup in the second half. The market does not want to see another leg down in earnings. The market is discounting a 100% chance the Federal Reserve will cut rates at the end of July, and some expect a total of three .25% cuts by year-end. If that were to occur, it should stimulate growth in 2020. Just one cut is not going to do much.

Consumer Disc.

985.83 2.1%

26.2%

Consumer Staples

615.88 0.9%

18.0%

Health Care

1069.57 -1.3%

6.9%

Financials

469.97 0.5%

18.6%

Industrials

660.45 1.2%

21.9%

Energy

476.89 2.2%

12.4%

Communications Services

170.73 1.2%

22.9%

Utilities

307.55 -0.1%

14.5%

Materials

366.04 -0.8%

15.7%

Real Estate

233

-0.2%

21.2%

Source: Bloomberg website, Returns are appreciation only.

Interest Rates

Fed Fund

2.25-2.50 5Year

1.84

3-Month

2.16

10-

Year

2.09

6-Month

2.06

30-

Year

2.61

2-Year

1.83

Source:

Economic Events This Week

Empire State

15-Jul

Manufacturi 1.6

-8.6

ng Index

16-Jul

Core Retail Sales m/m

0.1%

0.5%

16-Jul

Retail Sales m/m

0.1%

0.5%

16-Jul

Industrial Production

m/m

0.1%

0.4%

16-Jul

Fed Chair Powell Speaks

17-Jul

Building 1.30

Permits

M

1.29M

17-Jul

Housing 1.26

Starts

M

1.27M

Philly Fed

18-Jul

Manufacturi 5.0

0.3

ng Index

18-Jul

Unemploym ent Claims

216K

209K

Prelim UoM

19-Jul

Consumer 98.6

98.2

Sentiment

Source:

Economic Events Last Week

Date

Event

08-Jul

U.S. consumer credit reported at $17.1 billion in May, an annual growth rate of 5%

09-Jul

Job openings in the U.S. fell slightly to 7.32 million in May, still a near record high

Current GDP growth for the 2nd quarter is tracking only 1.4%. The remarkable decline in the Unemployment Rate over the last 10 years certainly drove the economy, due to the fiscal and monetary stimulus. There is only so much the Fed can do at this point. On a technical basis, the market is overbought, while there is very little upward slope to the 200-day moving average. Please see below the S&P 500 in blue and the 200-day in red. The S&P 500 is 8.4% above the 200-day, which is significant, and indicates there is risk of a pullback or correction.

Lastly, we have written a white paper regarding the markets, the economy, the current opportunities in the market, and a suggested alternative asset allocation versus traditional, given the low bond yields and expensive stock prices. I think you will find it helpful. If we get a bear market, bonds are not going to provide very much downside protection. We will send it this week, if you would like to discuss please let us know. The next 5-10 years will not look like the last 10 years and investors need to have a plan. The return potential of both stocks and bonds is minimal

10-Jul 11-Jul 11-Jul 11-Jul

Fed Chairman Jerome Powell testified and said the economy has not improved since June

Unemployment claims drop to a low of 209K in the week leading up to the July 4th holiday

The consumer price index rose 0.1% in June matching market consensus

The core CPI rose 0.3% last month, resulting in a 12 month increase of 2.1% from 2%

Please let us know if you would like to discuss. 800.777.0818

Please visit our website for more information.

12-Jul

The producer price index rose as expected by 0.1% in June

12-Jul

Core PPI rate was flat last month resulting in a yearly rate decrease of 2.1% from 2.3%

Source:

Phone: (800) 777-0818 Email: Information@ Web:

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