This Week in the Market

With Scott McCaghren and Tony LaPorta

Domestic equities are slightly higher at the moment, comparative to last week. Breaking news relating to a Chinese trade agreement was released just prior to the audio portion of the commentary. We have supposedly reached “a deal in principle” for phase 1 of the trade negotiations. It is our view that this is nothing more than continued shuffling of rhetoric without any foundational support.

 

There are many other headwinds facing global markets that we have discussed in several prior commentaries. These are the very reasons that so MANY fund managers are sitting on such a monumental cash position. These are the very reasons that we have taken such a protective stance.

 

However, the Fed has decided to launch yet another round of quantitative easing which is fueling our stock market higher. This must be one of the most perplexing moves from the Fed in a long time, if not, ever.

 

We interpret this as a guard against some sort of future capitulation that they have forecasted. The trouble is Joe Mainstreet has not been made aware of what this fear is stemming from. This is why we believe it is of the upmost importance not to attempt capturing every percentage that the market offers out.

 

This is identical to rampant greed that led up to the “kick in the chest” that 2008 doled out (obviously different circumstances). We cannot urge investors enough to remember that an extra 4% means nothing if it is followed by a 20% drop.

 

These markets must be navigated very methodically due to the news driven nature of today’s environment. We have followed our investment plan for 2019 almost exactly as we had originally laid it out which will continue to be our objective for next year. Keeping greed in check will ultimately be the key differential between a satisfied investor and a sorely disappointed one.

As always, we continue to monitor all equity, treasury, commodity and currency conditions in order to efficiently deploy capital as well as protect invested assets.

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