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Market Update November 2019

2018March-market-update

 

My November market update has been a little slow to develop because, well, I’ve been waiting for things to develop. I really feel like I could photocopy last month’s update and send it back out. We’re still talking about politics and trade wars, but it seems as though the general sentiment is a bit more positive, especially as expectations for an uptick in earnings growth for 2020 starts to be calculated.

Positive sentiment is a double-edged sword, though. It’s hard for markets to move higher if everyone has already bought in. For that reason, I expect the market to be somewhat range-bound, and to maybe even have a slight pullback before resuming its upward trend.

A big driver for the markets over the past couple of months has been the direction of interest rates. Since the 10-year Treasury bond hit a low of about 1.43%, it has raced back up to 1.83%, a huge move for bonds in a 2-month period. As it rose, it lifted a lot of lagging stocks with it, especially banks and other financials, which really needed a boost.

Earnings for the third quarter are mostly in, and results were generally better than expected. Still, corporate earnings are expected to end 2019 only about 1% higher than they began the year. 2020 looks like an improvement, with earnings expected to rise about 10%. I suspect that is a lot of the reason that stocks have had the recent rally, with the S&P 500 Index up over 4% already in the 4th quarter (as of November 15). The end of the year is, on average, the best season of the year for stock prices, too. That doesn’t always happen, though, and you don’t have to go back any further than last year to witness that exception.

My position right now is patience. I do expect this bull market–the longest in history–to continue. But there may be a pullback in the market, and there’s almost always a pullback in an attractive stock somewhere, and I hope to use those opportunities to put some cash to work for our clients.

In the meantime, I’d like to give you some homework. If you’ve had capital gains or losses elsewhere, possibly from other brokerage accounts or the sale of property, please check with us to see if we can offset that with gains or losses from your accounts here. Mutual funds will be distributing gains in the 4th quarter, and we’ll be working hard to try to offset those here. Frankly, though, there aren’t many losses left to take, so gains may be pretty high in 2019.

From the investment planning team at Signature Wealth, we hope you have a wonderful Thanksgiving. I always really enjoy it, and I’m looking forward to Thanksgiving this year, too. As a reminder, our office will be closed on Thanksgiving Day, and we close at 1:00 on the day after Thanksgiving.

As always, these opinions are mine, and may or may not be the same as those of Raymond James. This is not a solicitation to invest, although we do invite you to review your portfolio with us to see if any changes should be made.

 

 

 

 

 

 

Past performance may not be indicative of future results. There is no assurance any of the trends mentioned will continue or forecasts will occur. Investing involves risk including the possible loss of capital. Asset allocation and diversification do not guarantee a profit nor protect against loss. The forgoing is not a recommendation to buy or sell any individual security or any combination of securities.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. Individuals cannot invest directly in any index. Index performance does not include transaction costs or other fees, which will affect investment performance. Individual investor results will vary. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification. The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of Scott Mitchell and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James does not provide tax or legal services. Please discuss these matters with the appropriate professional.

 

 

 

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About Scott Mitchell

AAMS ®, Founding Partner SWS, Senior Wealth Advisor RJFS Scott is a cum laude graduate of Wake Forest University School of Business. He received additional training from the College of Financial Planning and earned the accreditation of Accredited Asset Management Specialist℠ as well as earning the Accredited Investment Fiduciary® designation.  Scott began his career at Southern National Bank. He then joined his father, Bob Mitchell, at First Union Securities for six years. At Signature, Scott directs investment strategy for the team and oversees the research and management of individual stocks, bonds and mutual funds. Scott lives in Florence with his wife and two children. He is a member and past President of St. Luke Lutheran Church, member and past President of the Florence Rotary Club, and on the board of directors of the Pee Dee Area Big Brothers and Big Sisters. Follow Scott on LinkedIn.

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