Trade Deal or No Trade Deal… Deal - October 14, 2019

Headlines bounced back and forth between optimism and pessimism last week, and movement in the market mirrored headlines. But by week’s end, the U.S. and China agreed in principle to a trade deal. A late Friday Wall Street Journal headline summed it up this way: “Trump Says U.S. Reaches ‘Substantial Phase One Deal’ With China.”

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Headline Volatility - October 9, 2019

The economic fundamentals have taken a backseat to headlines for much of the year, much more than has historically been the case.

Trade headlines helped drive shares higher earlier in the year.

  • The pullbacks in May and August occurred amid an escalation in tensions.
  • June/July’s rally occurred amid more positive trade headlines.
  • Economic concerns linger, but more recent action has been influenced by headlines.

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A 50-Year Low for Unemployment - October 7, 2019

The unemployment rate fell to a 50-year low in September, dropping 0.2% to 3.5% per the U.S. BLS. It ties the low last reached in December 1969. It seemed appropriate to lead off with a graphic that highlights the history going back to 1950.

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Impeachment, History, and Stock Market Reaction - October 2, 2019

We’ve had two instances in the modern era when a president was threatened with impeachment or was impeached—President Nixon (1974) and President Clinton (1998).

Investor reaction—

  • We were grappling with a significant bear market during Nixon’s second term, while stocks performed well during Clinton’s impeachment (St. Louis Federal Reserve data).

Why the contrast?

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Political Drama and Stocks - September 30, 2019

Political drama in the nation’s capital hit a fevered pitch last week, as House Speaker Pelosi announced a formal impeachment inquiry of President Trump. You know I don’t make a habit of staking out political positions in my weekly articles.

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