Economic Insights - November 2019

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What is the outlook for the economy?  We’ll give you the insights and analysis you need to make better decisions so that you can make better profits.

As of early November 2019, a Global stock market rally is underway, with key markets showing strength.  Despite the fact that the S&P 500 has meandered around during the last few months, the all-important “uptrend” got a boost with another new all-time high. And it’s the 225th all-time high in this Bull Market cycle, which is quite remarkable.

The index stands about 12 percent off the June 2019 lows.  That was the last time investors were warned about a correction that would bottom in the seasonally weak September-October time frame.  At that time, there were plenty of discussions on why the market could go lower and what would be required to make new highs.  In the minds of many, the scales were tilted to the downside.

Many sources of uncertainty remain there’s another 3-month extension on Brexit, positive comments on the U.S.-China trade situation, and the 10-year treasury at the highest level since early September.  As of November 8, the current bull market had run 3,890 days, easily the 2nd longest on record but still nearly two years away from being history’s longest. Yet, this bull notably more than doubles the average bull market in terms of both length and gain.

Corporate earnings, the FOMC moves, and economic data keep investors worried but not panicked.  The Fed announcement on interest rates came and went as investors watched stocks continue to move higher. Positive economic news and a more upbeat tone from both sides on the trade negotiations has enabled the S&P to reach another all-time high.

The correction period that was forecast to commence for September-October led to a gain of 3.7 percent.  The S&P now sits with a 22 percent gain for the year. Let’s also be fair and balanced and recognize the 6 percent loss for the index in 2018.  And remember that since January 1, 2016, the S&P is up 50 percent.  Which is what a secular Bull market should look like.

Trade angst, recession fears, and impeachment worries have kept plenty of people on edge and unsure of how to proceed in the stock market.  Yet, time-after-time,...

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