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COVID-19, What We Know image

First off, I apologize for not putting a note together until now. I've waited because I continue to read different stats and information on COVID-19 and wanted to wait until all of the information was confirmed. But at this point I think there's enough known about it and it's potential impact on our health and the economy. I apologize in advance for the length and wanted to have my entire perspective in 1 post. What is COVID 19? COVID-19 coronavirus is a novel coronavirus that originated in Wuhan, China, and has spread to more than 30 countries in Asia, Europe, the Middle East and now the U.S.  The World Health Organization and the United States have declared public ...

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Proper Presents “Dark Corners”: Trouble in the Repo Market image

The repo market has been stressed recently and the Fed has had to step in and inject a lot of capital to help alleviate the problem. But they don't know what's causing the problem or how much money it will take to fix it. In this Dark Corners, we will explore the repo market in more detail. But first, what is a repo? “Repo” is short for repurchase agreement. A repurchase agreement is essentially a short-term loan, usually between banks. Imagine you are a bank and you have clients who need to make payroll, but you don’t have enough cash on hand to cover the withdrawal. So you pledge a portion of your holdings (typically ...

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The Year Ahead (and beyond) image

As we enter a new decade, I thought it was appropriate to take a look at the past one as well as my expectations for what's to come specifically in the investment world. I can only imagine there will be countless technological breakthroughs during the next 10 years just as we saw over the previous 10 and am excited for the ones that move humanity forward and not just ones that keep us glued to a phone (or whatever tech comes next). Before we get into 2020 and beyond, let's take a quick stroll through memory lane. 2010's The past 10 years saw incredible gains in the US stock market as few expected the record breaking rally. If ...

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November 2019 Market Update & Outlook image

Monthly Recap November marked a continuation of the impeachment hearings and Hong Kong unrest, Michael Bloomberg throwing his hat in the 2020 Presidential race and a house bill decriminalizing marijuana federally. However, the US equity markets saw solid returns with the S&P returning over +3.5%, while international and emerging markets posted modest gains or were flat. Diversified portfolios continued to struggle vs. the S&P 500 since we saw bond and commodity markets pull back. The US large cap indices continue to be a bright star in the equity markets, although things don't last forever and diversification should not be abandoned. As always, below is a recap of November’s noteworthy events: Political: Testimony by various people (Gordon Sondland, Kurt Volker and ...

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October 2019 Market Update & Outlook image

Monthly Recap After September's noisy month of being dominated by WeWork and a potential impeachment of President Trump, October was equally as busy with a Fed rate cut, continued impeachment discussions, a bailout of WeWork by Softbank and much much more. The markets continued their march higher as the economic expansion continues to break records with each passing month. But one must wonder how much longer can things continue on this path. Negative rates does not make much sense and is a very big experiment most of the developed world is engaged in. My hypothesis is it's not going to end well. A wise man once said that we often meet our destiny on the ...

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September 2019 Market Outlook & Update image

Monthly Recap September was a particularly "noisy" month and was dominated by 2 main stories: 1. impeachment of President Trump and 2. WeWork's IPO and alleged abuses by it's founder Adam Neumann. Starting with impeachment, Nancy Pelosi launched a formal impeachment inquiry after Trump withheld military aid for Ukraine days before telling President Volodymyr Zelenskiy he should investigate Biden and his son Hunter, who was on the board of a Ukrainian gas company. There are now several whistle blowers who've stepped forward who were present or part of an effort to lock down the call records. Then days later President Trump requested China should also start an investigation into the Biden's. It's hard to believe anything ...

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August 2019 Market Outlook & Update image

Monthly Recap Thank goodness August is over with as there was a tremendous amount of noise. Things seemed to reach a fever pitch this past month with the ever evolving US-China trade war, protests in Hong Kong and interest rates which continued to fall globally. The US stock market started off weak and ended up posting only modest losses for the month which was a win in my book due to all the negative headlines that occurred during the month. To recap, here are some of the noteworthy events and stories from August: China responded to President Donald Trump’s tariff threat with another escalation of the trade war, letting the yuan tumble to the weakest level in more than a ...

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July 2019 Market Outlook & Update image

Monthly Recap July was a choppy month with a lot of headlines and somehow the stock market managed to be positive on the month. At the time of my writing however, the markets have had a rough start to August. But as we've seen in the past downturns, they tend to be short lived. To recap, here are some of the noteworthy events and stories from July: The US economic expansion hit 121 months and is now officially the longest in history!The Federal Reserve lowered interest rates by .25% to the 2-2.25% range. The market was pricing in 3 interest rate cuts this year and may have been disappointed in Powell's perspective that this is just a ...

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June 2019 Market Update & Outlook image

Monthly Recap June produced solid returns in the stock and bond markets as US interest rate cut rhetoric was front and center. We had some close calls with an air strike on Iran being called off at the last minute. To recap, here are just some of the noteworthy events and stories from June: President Trump ordered a military strike on Iran and then called it off at the last minute. According to Trump, he called off retaliatory strikes on three Iranian sites following the downing of a U.S. Navy drone because the action wouldn’t have been “proportionate.” That was a close call!There was a break in the US-China trade war (not to be confused with the ...

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May 2019 Market Update & Outlook image

Monthly Recap Another busy month of data and dram with the markets dropping and trade war escalating. To recap, here are just some of the noteworthy events and stories from May: President Trump increased tariffs on Chinese goods to 25% which caught the markets off guard. China responded with their own set of tariffs on around $60B worth of US goods. This continued escalation adds uncertainty at a fragile time in the economy and will surely knock some growth off GDP. Beijing’s threat to use its dominance of rare earths in the trade war risks serious disruption to U.S. industry, by starving manufacturers of components commonplace in everything from cars to dishwashers and military equipmentWith the trade wars front ...

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