Enjoying the Journey - July 2019

The U.S. stock market reached all time highs in late April, only to weaken after the US and China broke off trade talks when a trade deal could not be reached in the first week of May. That lead to a market selloff throughout the month of May. 

On June 4th, Jerome Powell, chairman of the Federal Reserve Bank stated when talking about the trade dispute "We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2% objective". The stock market then rallied back to all-time highs as investors interpreted this comment to mean that the Federal Reserve was likely to cut interest rates at their July meeting.

The big questions investors are now watching are whether the Federal Reserve will cut interest rates as expected and will companies report earnings for Q2 in line as expected. Q2 Earnings expectations overall are expected to be flat to slightly down relative to the second quarter last year.

Positives we see are the US stock market near all time highs, low unemployment with strong new job numbers, US GDP running about 2%, a possible interest rate cut by the Federal Reserve in July and talks scheduled to resume between the US and China. Negatives include tariffs of 25% continuing on $250B of imports from China, slowing economies abroad, and slowing manufacturing jobs numbers in the US. Our conclusion on the current situation and the outlook for the next quarter, has caused us to conclude that it is a time for some caution and to be somewhat defensive in our portfolios for clients.

You can find our monthly commentary on the stock market on our website by clicking the link below. If you would like to get this market commentary emailed to you monthly, contact Arielle or your advisor and we will add you to the distribution list.

We wanted to remind everyone of the responsibilities of each of our team members, and who you can call if you have questions. Call any of us directly whenever you have a question.

Elaine Manley, Financial Advisor:  408-963-2854
Scott Manley, Financial Advisor:  408-963-2855
Linda Tjiputra, Financial Advisor:  408-963-2896
Ingalill Skoogh, Client Services:  408-963-2858 (Scheduling appointments, helping with any service issues)
Arielle Rowe, Marketing Events Manager:  408-963-2889 (RSVP and any questions about events, creating account forms)
Jennifer Michaelsen, Financial Planning Analyst:  408-963-2884 (Financial planning, supporting the Client Portals and insurance analysis)
Flavio Pando, Jr, Investment Analyst:  408-963-2877 (Placing trades, researching investments, answering questions about the market)
Lynne Houghton, Social Media & Marketing:  408-963-0242, Working Fridays only