(315) 624-7300 / Email Us
Ascent Wealth Partners
  • Home
  • Investing
  • Planning
  • 401(k)
  • Knowledge
  • Team
    • Brad Kowalczyk
    • Mark Moshier
    • Scott McCartney
    • Doug Bissonette
    • Neil Edmonds
    • Joe Summa
    • Nancy Kowalczyk
    • Chris Lai
    • Tim Welchons
    • Steve Basile
    • Connie Benson
  • My Account
    • Schwab Login
  • Contact Us
  • Form-CRS
Ascent Wealth Partners
  • Home
  • Investing
  • Planning
  • 401(k)
  • Knowledge
  • Team
    • Brad Kowalczyk
    • Mark Moshier
    • Scott McCartney
    • Doug Bissonette
    • Neil Edmonds
    • Joe Summa
    • Nancy Kowalczyk
    • Chris Lai
    • Tim Welchons
    • Steve Basile
    • Connie Benson
  • My Account
    • Schwab Login
  • Contact Us
  • Form-CRS
Home Chris Lai Market Currents – 6/1/19
Back Home

Market Currents – 6/1/19

byAscentadmin inChris Lai posted onJune 1, 2019
0
0
Market Currents – 6/1/19

 

  • Volatility Returns. The solid start to the year has paused, as investors’ mood turned negative toward risk assets in May.  A deteriorating macro outlook, owing to the trade war and related growth anxieties, drove downward pressures.  The S&P 500 retreated roughly 6% during May, ending the streak of four consecutive months of positive returns that opened the year.

 

  • Trump: “My way or the Huawei”. Trade talks between the US and Chinese delegations are at a low, with rhetoric between the nations hardening.  In early May, following Chinese backtracking on deal talks, the US announced a new round of tariffs on imports, and the Chinese promptly retaliated.  In addition, a new front is emerging in the trade dispute, with Chinese telecom equipment maker Huawei Technologies being banned from the US market.  We would expect the Chinese government to undertake similar countermeasures against US companies and commercial interests.  The prospect of a speedy conclusion to the tensions continues to recede.   A protracted trade war will likely put the global economy on a substantially slower growth trajectory.

 

  • Softening Fundamentals. Growth anxieties are on the rise both domestically and abroad.  Global manufacturing activity, in particular, has been weakening, and some forward-looking surveys are beginning to suggest actual contraction.  Companies worldwide are scrambling to assess and adjust their supply chains to cope with the fractious trade climate.  In the US, we are concerned about the continuing auto slowdown, and its knock-on effects within the broader economy.  The housing sector remains sluggish as well.  Jobs and wages, on the other hand, remain on a positive trajectory, although they tend to be a coincident-to-lagging indicator.

 

  • Yield Curve Inversion. Meanwhile, a key slice of the US Treasury yield curve just became the most inverted (meaning that the interest rate of short maturities exceeds that of longer maturities) since 2007.  Historically, the yield curve is viewed as a precursor to upcoming recessions.  While we ascribe this inversion instance as largely tied to the downward pull of exceptionally low, even negative, interest rates overseas, it remains a caution flag that we are keeping an eye on.

 

  • Outlook for 2019. We are downgrading our outlook somewhat from our recent view.  While the recent deterioration in economic activity is a source of concern, the ongoing trade negotiations with China, Europe and Mexico will dictate market direction in the more intermediate term.  Though we believe the countries involved would want to avoid a man-made, self-inflicted economic stress, the situation is very fluid, and it remains to be seen whether a favorable trade deal can be negotiated.  In the meantime, the uncertainty can weight on investor, business, and consumer behaviors for the worse.  There are a few bright spots:  valuation, at about 15x forward, is inexpensive.  Sentiment is very cautious right now, which might lend the market some contrarian support.  And with inflation pressures still subdued, we suspect that a Federal Reserve rate cut might happen sooner than most expect.

 

 

Christopher Lai

Senior Portfolio Manager

6/01/2019

Share:

Previous

Market Currents 5/7/19

Next

Market Currents - 7/1/19

Related Posts

Market Currents- 01/06/2015
January 6, 2015
Market Currents- 01/06/2015
No Comments
Market Currents – 5/15/23
May 15, 2023
Market Currents – 5/15/23
No Comments
Market Currents 12/10/19
December 10, 2019
Market Currents 12/10/19
No Comments

Leave a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Archives

  • May 2023
  • April 2023
  • March 2023
  • February 2023
  • January 2023
  • November 2022
  • October 2022
  • September 2022
  • August 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • February 2022
  • January 2022
  • December 2021
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • January 2021
  • November 2020
  • October 2020
  • September 2020
  • August 2020
  • July 2020
  • June 2020
  • May 2020
  • April 2020
  • March 2020
  • February 2020
  • January 2020
  • December 2019
  • November 2019
  • October 2019
  • September 2019
  • August 2019
  • July 2019
  • June 2019
  • May 2019
  • April 2019
  • February 2019
  • January 2019
  • December 2018
  • November 2018
  • October 2018
  • July 2018
  • June 2018
  • May 2018
  • April 2018
  • March 2018
  • February 2018
  • January 2018
  • December 2017
  • October 2017
  • September 2017
  • July 2017
  • May 2017
  • March 2017
  • February 2017
  • January 2017
  • December 2016
  • November 2016
  • October 2016
  • August 2016
  • July 2016
  • June 2016
  • April 2016
  • February 2016
  • January 2016
  • November 2015
  • September 2015
  • July 2015
  • January 2015
  • November 2014
  • September 2014
  • May 2014
  • October 2013
  • June 2013
  • November 2012
  • May 2012
  • March 2012

Recent Posts

  • Market Currents – 5/15/23
  • 2023 Q1 Recap
  • Market Currents – 4/11/23

Contact Us

  • Address
    NEW HARTFORD: 89 Genesee Street | New Hartford, NY 13413 | 315.624.7300

    ELMIRA: 1225 W. Water Street, Suite 1 | Elmira, NY 14905 | 607.734.2002

    SARATOGA: 16 Lake Avenue | Saratoga Springs, NY 12866 | 518.306.4220
  • Home
  • Investing
  • Planning
  • 401(k)
  • Team
  • Contact Us
  • Terms of use

Recent Posts

  • Market Currents – 5/15/23 May 15, 2023
  • 2023 Q1 Recap April 24, 2023
  • Market Currents – 4/11/23 April 11, 2023
  • What Is Your Cash Doing For You? March 7, 2023

Login To Your Schwab Account

Copyright © 2023 Ascent Wealth Partners. All Rights Reserved.