Slowdown, Trade & Impeachment

27 Sep

Stocks failed to find much direction this week and ended the week lower with small company stocks being hit the worst.  The three drivers of market movement were:

  1. Slower growth as evidenced by personal-consumption data from the Commerce Department and data from Germany.
  2. The House of Representatives opened a formal impeachment inquiry based on a whistleblower complaint regarding President Trump’s conversation with the president of Ukraine.  Regardless of how you feel about this, it does create uncertainty, which can affect the markets.
  3. Conflicting signals on trade with the president showing optimism for a trade deal one day and the setting of the next high level trade talks for October 10th followed by news of the administration seeking to limit investor’s portfolio flows into China on Friday.

The week saw gold and oil prices fall.  The U.S. dollar was higher against a basket of currencies and the 10-year Treasury yield fell to 1.685%.

In economic numbers this week:

  • In Germany:
    • The manufacturing PMI fell to 41.4 in September from 43.5 in August.  Anything less that 50 represents contraction.
    • The services PMI fell to 49.1 in September from 51.7 in August.
  • S&P CoreLogic Case-Shiller National Home Price Index was unchanged in July.  From a year earlier, the index rose 3.2%.
  • The Commerce Department reported :
    • Personal-consumption expenditures rose a seasonally adjusted 0.1% in August.
    • The price index for personal-consumption-expenditures, the FED’s preferred measure of inflation, rose 0.14% in August.  Excluding volatile food and energy prices, the index rose 0.3%.   From a  year earlier the index has risen 1.44% and excluding food and energy 1.77%.
    • Compensation rose 0.4% in August.
  • The EIA weekly oil report is here wpsrsummary (5).  Also, the EIA reported in the past week:
    • Field production of crude oil rose from 12.4MM barrels per day to 12.5MM barrels per day.
    • Natural gas storage increased by 102BN cubic feet and is at the five year average at this time of year.

Please call us if you have any questions.

Best Regards,

Loren C. Rex, CFP®, AIF®, MA                                                       Erik A Smith

President                                                                                               Managing Partner

Generations Financial Planning & Wealth Management           269-441-4143

77 E. Michigan Ave, Suite 140

Battle Creek, MI  49017

Tel 269-441-4090

Carrie Fuce, Assistant 269-441-4091

Toll Free: 800-513-8180

Fax 866-381-2301

Visit our Website:  www.genfinplan.com

Registered Representative of and securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC.  Investment Advisor Representative, Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor.  Cambridge and Generations Financial Planning & Wealth Management are separate companies and are not affiliated.

These are the opinions of Loren Rex and Erik Smith and are not necessarily those of Cambridge, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.  The Indices mentioned are unmanaged and cannot be invested into directly.