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7am Saturday

October 12, 2019

Good morning! Grab your cup of coffee and enjoy this week’s dose of 7am Saturday…

Markets

💲 This week’s action for the US stock market (S&P 500):

  • Monday, October 7: -0.45%
  • Tuesday, October 8: -1.56%
  • Wednesday, October 9: +0.91%
  • Thursday, October 10: +0.64%
  • Friday, October 11: +1.09%

All in all it was a good week with the S&P 500 up 0.62%:

Like last week, we ended on good news for the market. Last week it was the strong job market. This week it was positive developments on the trade war with China.

Early Friday morning President Trump tweeted:

Stock prices were up on Friday based on optimisim that there will soon be a trade deal with China.

With the postive momentum at the end of the week the price of the S&P 500 is now once again above it’s 50-day moving average:

Economy

0️⃣ Inflation was unchanged in September – Consumer prices stayed flat in September after seven months of rising prices. Overall, inflation is up just 1.7% over the past year:

As you can see in the chart above, the inflation rate is down quite a bit from where we were in the summer of 2018 when inflation was near 3%.

📈 …however, “Core” Inflation is at an 11-year high – Consumer prices have been held back by declining costs for energy. If we strip out food and energy and just look at “core” inflation, we see that prices are up 2.4% over the past year. This is the highest level we’ve seen for core inflation in 11 years (since 2008):

🤔 So what does this mean? – Well, with core inflation above 2% I think the Fed is likely to continue with rate cuts. So, I checked the odds based on the way Fed Funds futures are trading. There is now a 70% probability that the Fed will cut rates for the third time this year on October 30th to help acheive their inflation goal of 2%:

Good to Know

📉 Fidelity follows competitors by eliminating online trading commissions – Last week Charles Schwab was the first to announce that they were eliminating commissions on stock, ETF, and options trades. TD Ameritrade and E-Trade both quickly followed with similar announcements. As I expected, this week Fidelity made an announcemnet of their own.

This is the best news I heard all week as it directly impacts the clients I work with! Our firm custodies 90% of our assets under management at Fidelity. The other 10% of our assets are at Schwab. Trading costs have been coming down for years and it was only a matter of time before the hit $0.

The Good Stuff

🐦 Why I like Twitter:

📱 Follow me – …and if you are on Twitter you can follow me here.

🎰 Know the odds – Bookmark this site as we gear up for an election year. The site is updated every 5 minutes with how people are betting real money on the outcome of the election. Studies find that political prediction (betting) markets tend to be better at predicting elections than polls.

❓Really Good Question (RGC) of the week – “What advice would you give your 23 year old self?”​
​
This question makes me feel old. 19 years have passed since I was 23!😮 I think I’ve made some good choices since then, but this is definitely a question I will reflect on.

The question also reminds me of this collection of “Letters to My Younger Self” written by professional athletes.

I’d love to hear your response. If you feel like sharing then simply hit reply.

🏐 Volleyball update – My daughter, Avery, is on the Liberty-Benton High School Volleyball team. They are having an incredible season, and they are getting ready to make a run at a state title! This past week they finished the regular season, and they will play their first tournament game this coming Wednesday night. Here are some highlights of the season so far:

  • This season’s record is 20-2.
  • The two losses were against state ranked Division 1 schools. (LB is Division 3)
  • LB is ranked #2 in the state of Ohio, Division 3.
  • The went undefeated in the Blanchard Valley Conference and never even lost a set to a BVC team. Watch: TV news highlight video.
  • The only two losses they have were against state ranked Division 1 schools. (LB is Division 3)

🏈 Buckeye fans: Did you know Ohio State has the strongest schedule of all the remaining unbeaten teams? Check this out:

Source: Jeff Sagarin @ The USA Today​

This week is a bye week and next week the #3 Buckeyes will have their biggest test of the year so far when they face #8 Wisconsin who is also undefeated.

Make it a great day,

Adam

↩️ PS – If anytime you get an email from me and you want to share a comment or ask a question, simply hit ‘reply.’ I read every email, and try my best to respond.

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