Recent Posts

September Economic Update

Market Summary

The beginning of August was met with an equity pullback spurred by the Trump Administration’s new proposed tariffs on an additional $300 billion of Chinese goods. During this same time period, the Chinese yuan currency dropped in value suddenly and considerably, and the Treasury Department characterized the move as manipulation. As the month progressed, the S&P 500 traded within a close sideways range until finally breaking out to the upside on news that the two sides will once again meet at the negotiating table “sometime” in early October. (1)

Trade Negotiations & Currency Devaluation

Trade representatives from the U.S. and China are planning to head back to the negotiating table early next month. This news came Thursday from China’s ministry of commerce, which confirmed a verbal agreement among Secretary of the Treasury Steven Mnuchin, U.S. Trade Representative Robert Lighthizer, and Chinese Vice Premier Liu He.

On August 5, China shocked financial markets worldwide by devaluing its main currency, the yuan, to a level unseen since the 2008 credit crisis. The rationale for this move was clear: by cheapening the yuan, China could make its exports more affordable for American buyers, effectively countering tariffs. (2)

Reaction on Wall Street was swift with U.S. stocks netting their worst day of the year. The Department of the Treasury immediately called China a “currency manipulator.” With China’s economy growing at its slowest pace in 30 years, the move could invite greater inflation. As the trade war continues, expect to hear more news about currencies in the coming months. If global growth continues to stagnate, central banks will likely justify interest rate cuts as a mean to stimulate business growth. However, another motive for interest rate cuts - which is often overlooked by media coverage - is to weaken the value of the underlying currency to spur inflation.

Global inflation has been stagnant in recent times which is concerning for the current “fiat currency” banking system. Central banks have many tools to control inflation – both to increase and decrease the phenomenon as a means to control economic growth. On the other hand, deflationary environments are very difficult for the current banking system to control, as interest rate and money supply changes do little to spur growth. Japan is one example of a country that has experienced long-term deflationary conditions, yielding little economic growth for decades.

The Fourth Quarter Approaches

Global and domestic economic data continue to flash mixed signals. Among the most perplexing is the substantial rally in bonds and gold over the past two months while the stock market has remained near all-time highs. Generally speaking, bonds and gold tend to move inversely relative to the stock market. The recent parallel between these historically uncorrelated sectors raises many questions as we move toward the fourth quarter.

The Federal Reserve will once again take center stage next week when they announce their latest interest rate policies. One thing that we can say with a high degree of confidence is next month’s Economic update will cover this announcement and the seemingly endless trade war saga. Until then, we remain optimistic, yet cautious, that the U.S. economy may remain steady through the end of this year.

Monthly Financial Tip:

Some insurers are now offering usage based auto insurance. If you happen to drive less than 10,000 to 15,000 miles a year, you may be eligible for a discount on your policy.


1 - [8/30/19]

2 - [9/5/19]

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.

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   |    Five Star Wealth Manager   |    Careers       

Barrington Capital Management, Inc.

3800 American Blvd West   |   Suite 1500

Bloomington, MN  55431

952-835-1000   |    800-741-0704


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 and Texas. 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. View our Business Continuity Plan.

Copyright © 2021 Barrington Capital Management, Inc.

A Registered Investment Adviser  |  All Rights Reserved