If Congress fails to pass another economic rescue bill soon, the United States is likely to experience a resurgence of financial and economic stress that will lead to a severe economic downturn, bankrupting the US financial sector and destroy millions of additional jobs. Government fiscal support saved the economy during the first half of this year. However, extreme risks still remain if no new economic package is passed in a timely manner. US Government Debt jumped by a record-shattering $3.3 trillion during the first half of this year. It was that surge in Government Debt that enabled the Private Sector to remain solvent. The $2.8 trillion increase in Government Debt during the second quarter was four times larger than the previous record, which was set in fourth quarter of 2008. Drawing on data from the
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Markets have closed below their respective supports yesterday and as well as this morning, but markets are now above this critical support. As of 3:49pm EST, markets are up 5%+. 10 more minutes to go! So what happened this week so far? The Federal Reserve attempted to calm markets on Sunday, but this was an utter failure, with markets opening up on Monday limit down, hitting a 2nd worst day of losses since 1987. Powell, the Fed Chair, has had a history of bad calls and this is another misstep that he will likely have to remedy, hopefully, sooner rather than later. This could soon be dubbed the next “Powell Pivot”, where back in late 2018 he repeatedly promised incremental rate hikes and put quantitative tightening on autopilot, which sent markets crashing in Q4 2018.
On March 6th, Boston Fed President Eric Rosengren said in a speech, “We should allow the central bank to purchase a broader range of securities or assets. Such a policy, however, would require a change in the Federal Reserve Act.” Since lowering interest rates and introducing more QE may not be enough to keep the economy and stock market from imploding if the virus continues to spread, the Fed may be forced to directly purchase stocks and other assets to prevent a major market downturn. Japan has already engaged in this policy. Ben Bernanke, a past Fed Chairman, also made similar comments after the 2008 Financial Crisis. The Dow Jones currently remains above its long-term support
With markets in flux, now is an opportune time to consider the following institutional investment funds that can provide you with a variety of benefits, including gaining access to institutionally-managed funds and assets that have proven track records, low volatility and low correlation to the stock market. Here is the list of funds you should consider to enhance your portfolio diversification and risk-adjusted return potential. Griffin Institutional Access Real Estate Fund The Fund strategically invests in an actively-managed combination of large, established private real estate funds and public real estate securities. Fund Performance: Current Distribution/Yield = 5.22% Class I Shares (GRIFX) Annualized Returns Through Dec. 31st 2019 Since Inception = 6.8% https://www.griffincapital.com/griffin-institutional-access-real-estate-fund/performance Griffin Institutional Credit Fund The Fund strategically invests in an actively managed, diversified portfolio of credit instruments, which may include bank loans, high-yield
The latest economic charts suggest the economy overall maintains an upward trajectory. Nonetheless, it appears we are pushing further towards the late-cycle stage. Even so, this last stage in the cycle may take years to play out before the economic and markets once again significantly contracts due to mounting debt, unfavorable demographics, disruptive technology, and monetary policy stimulus unable to provide enough accommodation for the economy. Unemployment Rate Overlayed with the S&P 500 Unemployment Claims Overlayed with the S&P 500 Houses Sold – New One Family Overlayed with the S&P 500
The “Powell Pivot” has pushed markets higher for now. Slow growth is still making strides, but once credit tightens again, markets will fall, likely before year-end.
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2019 is 0.2 percent on March 11, down from 0.5 percent on March 8. After this morning’s retail sales report from the U.S. Census Bureau, the nowcast of first-quarter real personal consumption expenditures growth declined from 1.5 percent to 1.0 percent. Source: Atlanta Fed
January 2, 2019 Market Update & Outlook for 2019 Earnings and economic data remained positive in the U.S. throughout 2018, posting an annual growth rate of 3.4% as of September 2018. Global growth began to slow in late spring of 2018, but still posted a 1.6% growth rate for the Eurozone and approximately 6% for China. Despite the backdrop of strong economic data, 2018 experienced widespread negative market performance that hit virtually all asset classes except cash and short-term Treasuries. (see table below) The dismal performance from both US and global stocks, bonds, real estate and commodities in 2018 was a result of slower US and global growth, rising interest rates, rising debt levels, significant policy errors from the US, China and central banks, and overly optimistic and unrealistic expectations by investors who pushed valuations
Stocks are likely to maintain their longer-term upward trend until the end of the year, and possibly until the summer of 2019. The US Economy remains strong and it is likely that a path towards a trade agreement between China/US trade will surface on or around the G20 meeting on November 30th. However, monetary tightening and rising interest rates will eventually become a drag on corporate earnings, economic growth and credit expansion. This will likely lead to the end of the bull market that investors experienced over the last 9 years, with equities peaking sometime between early- to mid-2019. Investor Challenge #1: Rising Interest Rates, Fading Effects From Fiscal & Monetary Stimulus & Tax Cuts Will Cause Growth to Slow The expansion of credit is a primary factor driving economic growth. As rates continue to rise,
Is it better to contribute to a traditional 401(k) or a Roth 401(k)? That depends on your personal situation and priorities. For example, because Roth 401(k)s allow tax-free withdrawals, they might be more appropriate for workers who expect to be in a higher income tax bracket during retirement. High-income earners who make too much to contribute to a Roth IRA may also find the Roth 401(k) attractive, as there are no income limitations for Roth 401(k) participation. Traditional 401(k)s, on the other hand, may be more appropriate for workers who want a tax break now and/or who expect to be in a lower income tax bracket during retirement. A financial advisor can help you determine which account may be right for your needs. Can I contribute to both a Roth 401(k) plan and
Only marginal declines in Emerging Market earnings suggest that fears of an imminent crisis are overblown There is a relatively strong correlation between the direction of earnings forecasts and the short-term relative performance of equity markets. Over the last 12m, US markets have outperformed peers as Trump’s corporate tax reductions and fiscal stimulus have provided a tailwind for US earnings. In the UK, although weighted earnings forecasts have risen, UK stocks have trailed behind, impacted in our view by the negative domestic sentiment in terms of Brexit. Similarly, in continental Europe, market sentiment has been impacted by international and domestic political events. Intriguingly, the median emerging market forecast has only fallen by 2% since the Q1 peak, similar to the UK and Europe, suggesting fears of an imminent crisis are not at present feeding through
As we step into the final growth stage of our economic cycle, which has been one of the longest in modern history now in its ninth year, the yield curve once again seems to have a high likelihood of predicting the next market peak and crash. The trajectory of the yield curve, along with a few other contributing factors discussed below, suggests a market top and subsequent crash will take place exactly one year from now. Currently, the US is expected to surpass 3% GDP growth in Q2 2018, according to the AtlantaFed GDP Now, and economic conditions are extremely strong, better than we have had for over a decade. Even so, headwinds are mounting and the tailwinds are waning. At the moment, we are benefiting from lower taxes, the increased spending
With rates on the rise, now is the time to invest in… Current Yield = 6.00% Approximate NAV = $25 Minimum Purchase Amount = $2,500* Custodian: TD Institutional Share Class Purchased Through Blue Pacific Wealth Management = I Shares (Institutional Shares) Are you tired of taking on increasing interest rate and credit risk while only getting a mere 2% – 4% yield in fixed-income? Are you invested in individual bonds, bond mutual funds or bond index funds that have a high risk and low return potential? If you are currently invested in traditional corporate or high-yield mutual funds or index funds, you are currently being confronted with multiple headwinds, including rising rates and rich valuations due to the Fed’s multiple stimulus programs since 2009 that have expanded credit. What’s more, it is likely we are entering the
The Main Benefits of Alternative Investments Include: Income – An investment strategy that seeks to provide a steady stream of current income, or yield, over time. Investors have varying needs for dependable current income, whether to meet monthly expenses or achieve long-term financial goals. Especially during periods of low interest rates, some alternatives may offer higher yields than traditional investments. Diversification – A risk management technique that mixes a wide variety of investments within a portfolio. A diversified investment portfolio that includes stocks, bonds and alternatives can help smooth the impact of market volatility and may generate higher returns relative to their levels of risk over time. Many alternative investments tend to have lower correlations to traditional investments. As a result, they can potentially reduce overall portfolio volatility and help mitigate extreme swings in investor sentiment
Bryan’s Market Update – April 10th 2018: Volatility Resurfaced, But Markets Maintain A Long-term Upward Trend
April 10th, 2018 In this issue! – Market Update – Current Investment Considerations – Forecasting The Next Recession – Featured Charts – Featured Alternative Institutional Investment Offerings – Proprietary Asset Class Rankings for US & Global Markets Interested in setting up a meeting? I’d love to connect. Here’s my calendar link to schedule a time. Markets have had a wild ride so far this year. In my last letter after the new year, I mentioned markets would have a spike in volatility. We have seen this increase in volatility coinciding with two sharp drawdowns in just the first three months of the year with subsequent recoveries. After remaining below 14 on the VIX (Volatility Index) for most of 2017, the VIX spiked to 50 in February and maintained an elevated level over 16 so far for most of
Apple, Caterpillar and Wynn Resorts are businesses that could be especially hurt if other countries or trade blocs retaliate. President Trump’s discussion on tariffs has the capacity to initiate a trade war. Surely there’ll be plenty of commotion, as is customary with Trump, and in our investigation, the likelihood of a trade war with dire consequences isn’t large. Nonetheless, it’s only prudent to take preventative actions. Let’s explore using a graph, I shall share the titles of 10 popular stocks which would be in danger if there’s a trade warfare. Read:Here is why the stock exchange is accepting the Trump tariffs so challenging (http://www.marketwatch.com/story/heres-why-the-stock-market-took-the-trump-tariff-announcement-so-hard-2018-03-01) Chart Click here here (https://thearorareport.com/chart-stock-market-trump-trade-war-03022018) to your annotated chart of S&P 500 ETF (SPY). Similar conclusions could be drawn from the graphs of Dow Jones Industrial Average , DJIA ETF (DIA) and