Volatile Markets Lead to Mixed Week/China Always in the News!

Volatile Markets Lead to Mixed Week/

China Always in the News!

 

 

 

Strong Corporate Earnings could not negate Investor’s concerns about rising interest rates. For the week, the Dow increased by (.41%), the S&P500 rose (.02%). The Nasdaq Composite lost (.64%) and the Small Cap Russell 2000 was down (.30%).   A lot of volatility with the week ending flat!

 

Bonds, as measured by Barclays Aggregate Bond Index lost (.37%).

 

Across the pond, the MSCI EAFE International Index was flattish, down slightly by (.07%). The MSCI Emerging Market Index was down (.88%).

 

 

China

 

 

China reported 6.5% GDP last week, the slowest expansion since 2009. The Chinese Stock Market is down by double digits year to date, suggesting that the trade war may be impacting them sooner than here in the United States. Interestingly, the Chinese Stock Market, over the last couple of days, is up over 5%. Is it a “dead cat bounce”, or will China’s Market Stock begin to recover? I certainly hope for a recovery!!

 

 

Interest Rates

 

 

The 10 year US Treasury started 2018 with a yield at 2.41%. As of last Friday, the yield is up to 3.20%. My guess is, that a fourth Federal Reserve Rate hike this year is already priced into the Bond Market. The Fed has indicated they will continue to increase rates as the economy is very strong. Do they have it correct? In addition, pressure on rates is increased by the Federal Reserves “reverse” “Quantitative Easing” program. The Fed is now letting up to 60 billion of Treasury Bonds mature without reinvesting into additional Bond purchases. The combination will certainly put pressure on longer rates to increase if this current direction continues. The good news is that you can now obtain a “decent” interest rates on shorter term US Treasury Notes, Bills and Certificates of Deposit.

 

 

TIDBITS

 

 

Tax Rates, Up and Down: Congress has raised the top individual marginal tax rate 7 times since 1950, the last in 2013, when the top rate went from 35% to 39.6%. Congress has lowered the top individual marginal rate 13 times since 1950.

 

Bond Market: The Bond Market has been down 3 years over the last 40 years. As of last Friday, October 19, 2018, the Bloomberg Barclays US Aggregate Bond Index is down (2.46%) year-to-date.

 

Japanese Stocks: The Japanese Stock Market, as measured by the Nikkei 225 Index, hit its all-time closing high of 38,916 on December 29, 1989. 2 weeks ago, the index closed 42% below its 1989 high. Will it every recover??

 

 

Question of the Week

 

 

7 National Football Teams have been fortunate to win back-to-back Super-bowl Championships. Which is the only team to have achieved that feat twice? Will the Eagles join the 7?

 

a) The Dallas Cowboys

b) San Francisco 49ers

c) New England Patriots

d) Pittsburgh Steelers

e) Miami Dolphins

Answer to Last Week’s Question of the Week

 

 

Who is the highest paid athlete over the last 12 months ending June 1, 2018?

 

a) LeBron James (Basketball, U.S.)

b) Floyd Mayweather (Boxing, U.S.)

c) Cristiano Ronaldo (Soccer, Portugal)

d) Roger Federer (Tennis, Switzerland)

 

The answer is –

b) Floyd Mayweather (Boxing, U.S.)

Over the last year ending June 1, 2018, Floyd earned $285 Million! That’s a Wow! 2nd on the list is Cristiano Ronaldo (Soccer, Portugal) with $108 Million in earnings. LeBron James, leads all US athletes with $85.5 Million