We recognize the impact that the volatility has had this year, especially on investor confidence in the last couple of months. It’s important at a time like this to maintain your long-term plan. It’s not good to react too strongly to the type of market swings we have witnessed during the last couple of weeks. Every extended bull market has wild swings and volatility. We are still in a good environment for stocks. We have had consumer confidence, strong spending, high single-digit earnings growth, historically low-interest rates, 2.5-3% GDP, increased dividend growth, strong corporate buyback and above trend manufacturing growth that shows 72% of industries are growing.
There have been a lot of headlines about tariffs and trades the market. This week, however, there was a major positive trade agreement signed with South Korea which isn’t as big as China but still a major market. This will help oil production in the United States with as big of an industry that it is. It could also increase employment. You don’t typically see these types of things in the headlines that are below the surface doing well. The market shot over 3% during the last week of November and ended up being a phenomenal week. That increase was largely due to positive news about trade talks with China and the U.S. Last week a few things happened that caused the market to give those gains back and then some. There was no new fundamental news. GDP data came out and was great and unemployment was still strong. Trade data, however, shows we are still down 4%. This is proof that the market is extremely emotional about a few topics and ignoring a lot of the fundamental positives.
We keep talking about market volatility within the U.S and it’s easy for us to focus on our own domestic markets but we are not the only ones struggling. There’s a global weakness. We heard this morning that the UK will delay the Brexit deal. This news has contributed to an 18-month low on the Sterling right now. Also, Asia markets are down. China agreed to “immediately” make purchases in agriculture specifically soybeans. We are waiting to see if their “immediate” purchases will be at the end of the year, tomorrow or in 90 days and what impacts that will have. Also, we have been tracking this on the vlog, but last week for the first time in 7 years the U.S. exported more oil than we imported which is very good for the U.S long term.
Fi Plan Partners is an independent investment firm in Birmingham, AL, serving clients across the nation through financial planning, wealth management and business consulting. Fi Plan Partners creates strategies in the best interest of their clients using both fee based investing and transactional investing.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Economic forecasts set forth in this presentation may not develop as predicted.
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