Coronavirus Update

  The risk of recession continues to rise and as the risk plays out equity markets fall and treasury markets rally.  Stocks generally have fallen almost 20% from their all time highs achieved just a few weeks ago.  Conversely 30 year treasuries have risen almost 15% during that same timeframe as record lows in interest rates are embraced.  The 30 year treasury is now yielding less than 1% and 10 year treasuries are yielding approximately 1/2 of 1%.  If the fear of recession turns into reality treasury yields will undoubtedly move into negative territory across the yield curve and equity prices will possibly fall another 10 to 20%.  Gold has not turned out to be much of a hedge for this recent drop in equity prices.  While gold has done well at times historically during periods of fear gold has now become a bit more of a commodity used in jewelry and hence tied to economic strength.  As recession is embraced investors are less thrilled with gold. Treasuries are a much better hedge for inflation then gold it would appear.Read more

Is the Coronavirus (COVID19) just creating Market Volatility, or is this the End of the growth phase of this Economic Cycle

The steady rally in equity markets that we have enjoyed for over 12 months may have come to an end. Our current rally began in January 2019 after our last correction that occurred in October 2018.  The S&P 500 has declined approximately 11% from its all-time high achieved just a few weeks ago.  Volatility has risen to the highest level in several years over the last two weeks.   Has the rally just paused or is this the beginning of a more significant correction as investors discount the likelihood of the growth phase of this economic cycle ending because of the impact of the coronavirus.  We highly suspect that this is not the case! However, we cannot ignore the unknowns that exist with this highly infectious virus that has not proven to be very deadly, but is a threat to people who already have respiratory distress. The last time we had a coronavirus in the globe was in 2003 with SARS. It began in China as well and mutated from animals very similar to this virus. The SARS virus caused little if any damage to the global economy or the American economy and burned itself out within six months. SARS had a much higher death rate and was also very infectious but never spread to a vast part of the globe.  We have had other viruses over the years that were deadly but have never shut down or changed course of the global economy. SARS, MERS, Swine Flu, the list goes on…Hopefully this will just be another one that is added to the list of viruses that burned himself out before they ever damaged the US economy.Read more

Markets Advance as US Economy Ebbs

The US equity markets moved counter to the economy and the bond markets in the fourth of 2019. US equity markets had their best quarter in years as the S&P 500 advanced 9% and MACM’s dynamic growth portfolio (DG) and diversified equity (DE) advanced 11.9% and 12.9% respectively.  The rally was rooted in several beliefs that grew deeper in the minds of investors as the quarter unfolded. The attacks on capitalism by liberal Democrats began to wane as Warren and Sanders retreated from their strong rhetoric of tearing apart corporate American superstars like Amazon, Facebook, Apple, Google, and Netflix.  The trade picture also improved during the quarter as a deal was struck with the Chinese that would be incorporated in two phases.  While trade has really not impacted the economy in America it has slowed the Asian economies dramatically and hurt global growth.  These manufacturing areas of the world purchase significant amounts of American industrial equipment and this part of the US economy has been soft for several quarters.  These areas of the economy came to life in the fourth quarter and we also saw Netflix and Amazon return to the top of the leaderboard.Read more

Equity Market Recovery Stalls As Global Condition Ebb

By Mitchell Anthony October 21 2019   US Economy continues to ebb and flow.  The recovery in the equity markets that began in January paused in the third quarter as investors became uneasy with weak economic data on global economic conditions, as well as a deteriorating industrial sector here in America.  The consumer side of the economy remains quite robust and as contributed to optimism that has kept the market on a plateau and gave sellers reason to pause.Read more

Q2 2019 – Markets advanced with defensive leadership

Q2 2019 - Markets advanced with defensive leadership By Mitchell Anthony The US Economy continues to ebb and flow producing steady but below trend growth for several quarters.  This trend seems likely to continue as the economic environment stays extremely stable with low inflation, friendly fed policy, and employment at all-time highs.  The Current trends in the US economy show a mixed picture but generally improving economic fundamentals are visible. Read more