December 6, 2018. There is growing concern about the weak economy and the possibility of a coming recession. Here is some commentary from investyourself.com
That was part of it. But just one part. It has been my opinion that the market is in the process of topping out, and all one needs to do is look around and see why. Rates have risen, and the Fed’s are on the hook to hike again in December. Car sales have fallen. Housing sales have plunged. Hundreds of stores have gone out of business. Apple’s having trouble selling phones. Car manufacturers are laying off thousands. The China tariff situation hasn’t been solved. Add that all up and you come away thinking “wow, what’s left for the market to rise on?” Not much.
Also, everyone is watching for the possibility of a yield curve inversion: note the following from systemsandforecasts.com.
The last piece of the puzzle is the yield curve (difference between two and ten year Treasury note yields). Historically, instances when two-year yields exceeded 10-year yields have always been followed by a recession (with the possible exception of June 1998), although sometimes with a lag of as much as two years. On December 4, 10-year yields were only 0.11% (11 bp) above 2year yields, the narrowest spread since 2006. (See figure above.) Narrow spreads do not count; only true yield curve inversions where 2-year yields exceed 10-year yields have served as a recession warning historically. This bears watching. (No pun intended.) Note that an inversion in the yield curve is not an immediate sell signal for stocks
And finally, Mexico is hurting with the immigration issues. Tijuana tourism is hurting. And tourist travel to Baha Mexico is evidently down 30%, and they have fears of the border closing with no way to return to the US. It is in Mexico’s interest to stop immigration into the US.
Bottom Line: Increasing rates by the FED and China tariffs continue to disrupt markets.
btw The negative stories keep coming out on Facebook…..we are very happy to see the increased scrutiny of these huge radical liberal tech Companies. Amazing stuff. The stock continues to collapse.
NOTE TO NEW READERS: Before you buy anything we discuss here, GO to the Core Portfolio tab to see a CURRENT listing of holdings.
We own the NGL-B preferred in the Core Portfolio. It has tanked and is on sale in our opinion. You can BUY. Here is an article discussing the common stock and preferred:
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