Financial Expert Witness - Securities Expert Witness, FINRA Expert Witness
401k Consulting Minneapolis
Financial Road Map
Minneapolis Wealth Management | Minneapolis Investment Advisor

Recent Posts

December 5, 2019

November 7, 2019

September 13, 2019

Please reload

February Economic Update

February 7, 2019

Market Summary

Market sentiment and optimism has swung 180 degrees from just one month ago. The last quarter of 2018 saw the major U.S. indices take a sudden and unexpected swing to the downside. The begin 2019, we’ve seen almost nothing but upside to start the year and regain much of December’s losses.

 

The S&P 500 advanced 7.87% in January, with a new earnings season as well as trade and monetary policy developments providing tailwinds. Most of the economic data that rolled in was good, recent employment numbers were stellar, and the partial federal government shutdown may have negatively impacted some of the numbers. (1)

 

The "Fed" and Trade Talks

Last month we noted a few positive developments which must occur to help turn the market around. The Federal Reserve delivered on one of them by leaving interest rates unchanged in January. However, what really intrigued investors was the “dovish” tone of the Fed’s latest policy statement. It noted that the Federal Open Market Committee would be “patient as it determines what future adjustments to the target range for the federal funds rate may be appropriate” for the economy. The central bank appeared newly cautious: language implying that rate hikes might be merited was now absent.

 

Another large boost to the markets provided by the Fed was their decision regarding balance sheet assets. In short, the Fed took many troubled assets onto their books during the 2008/2009 Great Recession to ease financial strain and spur economic growth. Last year, they began selling these assets back into the market. Many were concerned that this was placing too much selling pressure onto the markets, especially during the decent down swings. In January, the Fed stated that they would slow down the liquidation of these assets, which was music to Wall Street’s ears. (2)

 

In mid-January, China made a move in the U.S.-China trade dispute. It offered a plan to address the U.S. trade deficit, with an objective of cutting it to $0 by 2024. China would undertake a strategy to buy greater amounts of American goods: $45 billion more during 2019, and gradually, more in each of the following five years, with the multiyear increase reaching $1 trillion. Bloomberg News reported that U.S. negotiators wanted China to try and wipe out the trade imbalance within two years, not six. American demand for Chinese-made products is so strong, however, that making any real dent in the trade deficit might be a tall order, given current free market conditions. (3)

 

Market Outlook

Patient investors sighed with relief at January’s major Wall Street advance. The S&P 500 had not rallied so strongly in January since 1987. It just goes to show that when the bears come out, the bulls are quite capable of coming right back. Going into February, investors have three preoccupations: earnings, the rate of progress in the trade negotiations between the U.S. and China, and the lingering risk of a shutdown in Washington. In the best-case scenario, this month would see a return to business as usual on Wall Street: a leveling out of extreme volatility, a fading memory of December and its anxieties. With luck, maybe we will see that this month instead of a retreat inspired by poor quarterly results or sudden headlines. (4)

 

Monthly Financial Tip:

Many people sign-up for credit cards without first looking at the interest rates or terms. Be sure to read ALL of the fine print when applying for any card, and opt for plastic which offers the best “cash back” rewards. 

 

 

 

Citations

1 - markets.wsj.com/us [1/31/19]
2 - nbcnews.com/business/economy/federal-reserve-leaves-interest-rate-unchanged-first-meeting-2019-n964726 [1/30/19]
3 - bloomberg.com/news/articles/2019-01-18/china-is-said-to-offer-path-to-eliminate-u-s-trade-imbalance [1/18/19]  
4 - marketwatch.com/story/what-does-the-stock-markets-monster-january-rally-mean-for-february-2019-01-31 [1/31/19]   

 

 

This post has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. Bob Lawson is not engaged in rendering legal or accounting services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

Please reload

Financial Plan | Personalized Report | Financial Advisor - Minneapolis

Barrington's Financial Blog

 About    |    Our Services    |    Financial Planning    |    Employer Retirement Plans    |    Contact

Litigation Support    |    Expert Witness    |    Pro Bono Services    |    Careers       

Barrington Capital Management, Inc.  |  3800 American Boulevard West  |  Suite 1110  |  Bloomington, MN  55431

952-835-1000   800-944-2419  |   Fax: 952-835-1504  |  Info@BarringtonCap.com

 

Barrington Capital Management, Inc. only conducts business in states and jurisdictions where it is registered or where an exemption from registration exists. This site and its contents do not constitute investment advice or a solicitation to sell securities. Past performance is not indicative of future results. This website is for informational purposes only and Barrington Capital Management, Inc. reserves the right to modify it at any time without notice. Copies of Barrington Capital Management Inc.’s Form ADV Part 2 are available upon request. Images and photographs are included for the sole purpose of visually enhancing the website. No photographs are of current or former clients and they should not be construed as an endorsement or testimonial from any of the persons in the photograph.

All materials used on this site, including all images, are copyrighted and are protected worldwide by copyright laws and treaty provisions. They may not be copied, reproduced, modified, published, uploaded, posted, transmitted, or distributed in any way, without Barrington Capital Management Inc.'s prior written permission.

Neither Barrington Capital Management, Inc., nor any of their Investment Adviser Representatives, provide tax or legal advice. Tax and legal advice should only be obtained from a qualified professional. All written content on this site is for informational purposes only. All information and ideas should be discussed in detail with an advisor prior to implementation. Examples from our news feeds, blogs or articles do not take into consideration commissions, investment management fees, miscellaneous transaction fees, tax considerations, or margin requirements, which are factors that may significantly affect the economic consequences of a given strategy. Investors should review transaction costs, margin requirements and tax considerations with their financial or tax advisor before entering into any investment or financial planning strategy. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness.

Investment Advisory services are offered by Barrington Capital Management, Inc., a Registered Investment Adviser in the states of Minnesota, California, Texas, and Wisconsin. Barrington Capital Management, Inc. may utilize the services of First Ascent Asset Management, LLC for certain investment portfolios. Insurance products and services are also offered through Barrington Capital Management, Inc. 

 

Disclosure: Barrington Capital Management, Inc. is not a law firm. Robert D. Lawson and his associates are not practicing attorneys. The scope of any activities performed by Robert D. Lawson, subcontractors or employees of Barrington Capital Management, Inc. is limited to litigation consulting and litigation support.​

By using this website, you agree to our Terms of Service and Privacy Policy.

Business Continuity Plan

Copyright © 2019 Barrington Capital Management, Inc.  |  A Registered Investment Adviser  |  All Rights Reserved

  

 Financial Advisor Minneapolis, MN