Markets Continue to Rise As China Phase 1 Trade Deal to be Signed!

On Wednesday January 15th, the United States and China are scheduled to ink a Phase 1 Trade Deal, that may increase global business confidence.

The deal includes a roll back of a previous tariff increase from 15% to 7.5%, and the official cancellation of last December’s scheduled new 15% tariff.  Also included, will be promises for China to purchase approximate amounts of US Agriculture.  I’m guessing we’ll find out more details after the deal is official.

In 2019, US consumers spent money like gangbusters, however Corporations held back with the uncertainty of trade issues.  This trade deal does not solve all of the issues between the US and China however it may encourage Corporations to again start spending money on new projects and expansion instead of buying back their own stock, which by itself has certainly attributed to share price escalation.

Most prognosticators believe that Global Growth will improve this year with improved trade issues between the US and China.

Markets Last Week

Last week showed a continuation of 2019 with most boats rising.  The S&P 500 rose .98%, the Dow Jones Industrial Average .67% and the Nasdaq Composite rising 1.75%.  The small cap Russell 2000 however was off a mere (.18%).

Bond yields increased slightly as the US 10 Year US Treasury Yield rose to 1.82% from 1.79% the week prior.  It is amazing to me that US yields and yields in many countries remain at historic lows, in spite of positive global growth.

Last Friday the monthly jobs number was released showing the US added 145,000 jobs last December, which is below the 6 month average.  The unemployment rates stayed low at an amazing 3.5%.  For the time being, this should keep our Federal Reserve fairly quiet and not talking about either lowering or raising the Discount Rate.

Corporate Earnings Reports to Begin this week!

This week starts 4th quarter 2019 Corporate Earnings reports with our Banking Sector reporting.

Earnings reports have been subdued in 2019, mostly attributed to the uncertainly about US and China Trade.  Most are expecting flat earnings growth in the 4th quarter however they will be given a reprieve, as most expect corporate profit growth to resume the upward climb with some trade uncertainty erased.

Many are expecting Corporate America profit growth to be high single digit, to low double digit growth in 2020.

I do believe what happens with Corporate Profit Growth in 2020 will impact our stock market this year.  What’s going to happen?  As always, time will tell!

Do You Have Concerns?

If you’re approaching retirement or currently retired, do you have questions and/or concerns such as:

  • Is my portfolio properly positioned so I can maintain my lifestyle, even if the stock market has a major correction?
  • What accounts should I be withdrawing money from a tax perspective?
  • When should I truly begin collecting your Social Security Retirement Benefit?
  • Am I paying too much in income tax and how can I possibly reduce Uncle Sam from collecting too much of my hard earned money?
  • When should I sign up for Medicare, and how can I avoid paying the painful Income Related Monthly Adjustment?

The above questions and many others can be discussed and answered by scheduling a complimentary 30 minute phone or “Zoom” (similar to Face-Time) conversation.  You will be able to ask any question whether it pertains to the above list or not.  As always, you’ll receive an unbiased opinion based upon the specifics of your situation!

To schedule your Friday morning complimentary consultation, please click here.

If Friday mornings is not convenient, please email my assistant, Ellen Polcari @ ellen@retirementrefined.com.

 

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Paul Levin CFP®, ChFC®, RICP®

Retirement Income Certified Professional®