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Economic Normalization on the Horizon

During the month of November, the S&P 500 Index jumped 11% on the expectation of improving economic conditions next year. The index is signaling that the U.S. will reach economic normalization in 2021 due to the development of several COVID vaccines, a likely deferment of further trade wars, a potential stimulus package, and a divided government.

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4th Quarter 2019 Investment Update

Supported by stable interest rates and optimism regarding the China trade negotiations, the S&P 500 Index rose 28.9% and the Nasdaq Index, with its high information technology weighting, rose 33% for the year.

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3rd Quarter 2019 Investment Update

The S&P 500 Index has climbed 1.2% during the third quarter as optimism about a China trade deal and the increased probability of a more accommodative Federal Reserve has investors convinced that the economic expansion will continue. The second-quarter earnings reports were generally better than anticipated with 2-4% growth year over year, so overall valuations look reasonable.

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4th Quarter Investment Update

The volatile equity markets continued dramatic price swings while bond yields moved lower in the fourth quarter. The potential for a trade war with China and higher interest rates has investors concerned that economic growth will be constricted. With U.S. annual inflation dormant at 2.2%, reduced home sales for the past nine months, decelerating automobile sales, declining commodity prices and slowing GDP growth, the concern is the Federal Reserve has already raised rates too quickly.

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