NetWorth Radio Advance Report - August 12, 2019

In this NetWorth Radio Advance Report, Spencer McGowan, President of McGowanGroup Asset Management, delivers financial news and intelligence with insights you can act on for August 12, 2019.

Advance Report

Radio Show

So much for the summer doldrums! Investors woke up Monday morning to a full blown trade related cat fight between dear leader scrappy little Xi and our own beloved Agent Orange.
Investors wasted no time before selling stocks and buying lots of long duration dangerous treasury bonds betting that trade disruption will create the long dreaded slow down.
China halted imports of U.S. agriculture in spite, sending the commodity markets into turmoil. At the overnight lows of the week, the Dow declined to near 25,000 after July hit new highs above the 27,300 mark, creating about an 8% decline. Oil declined at the lows of the week to near $50 before a rebound. The thesis appeared to be “Global Slowdown and China Won’t Want Energy Imports”.
Russia and Hong Kong appeared to be entering an internet based protest revolution. Both countries are known for enthusiastic oppression and self serving disruptions of the internet.
Gold prices topped $1,500 per ounce. Other than that, not much happened. Finding Peace in Chaos leading to effective investment strategy begins often with great questions:
  • Will trade disruption cause the long dreaded slowdown recession?
  • Why was there massive buying of U.S. Treasuries with minimal yields?
  • What should investors do for the rest of 2019 to prepare for 2020?
  • What is a “safer non-correlated asset? Hint: Not Bitcoin.

 

Headline Round Up!

*Stock Market Plunges and Rebounds!
*Trade War Kung Fu!
*Treasuries Flash Recession?
*Is There a Global Slowdown?
*Cheap Mortgages Everywhere!
*China’s Hong Kong Revolution Complicates Trade Negotiations. What is really going on in Hong Kong?
*Russia Wrestling Revolutionary Bears After Major U.S. European Sanctions Freeze Assets! What is really going on in Russia? NetWorth Radio inside report coming up next.
*MasterCard Takes Over $3 Billion Payment Platform.
*Texas Topo Chico Sales Jump 39%. Investor lessons from Coca Cola takeover synergies.
*Cannabis Replacing Asparagus as Outdoor Crop.
*To Infinity and Beyond! U.S. military space plane appears to be the “space force” transport vehicle. Is there a “space ranger” uniform yet?
*Earnings Season Almost Done! What did we learn for portfolio strategy!
Dow Jones Industrial Average index Futures – e-C.B.O.T Price (8/5/2019 – 8/9/2019)

– Courtesy of Bloomberg

Dow Jones Industrial Average Index (3 Years)

– Courtesy of Bloomberg

Standard & Poor’s 500 Index Earnings Analysis (5/6/2019 – 8/15/2019)

– Courtesy of Bloomberg

C.B.O.E. Short Term Interest Rate Index, 10 Year Treasury Note Yield Index and 30 Year Treasury Bond Yield Index (Approx. 8 Months)

– Courtesy of Bloomberg

C.B.O.E. Short Term Interest Rate Index, 10 Year Treasury Note Yield Index and 30 Year Treasury Bond Yield Index (12 Years)

– Courtesy of Bloomberg

Soybean, Corn and Cotton Future Spot Prices (Approx. 8 Months)

– Courtesy of Bloomberg

Soybean, Corn and Cotton Future Spot Prices (Approx. 5 Years)

– Courtesy of Bloomberg

Texas Black Gold Rush!

*Oil Plunges as Low as $50. Apparently the premise is reduced energy demand?
*Energy Infrastructure Earnings Recap!
*LNG Market Demand Update.
*Phillips 66 Roll Up Latest Updates.
*Texas Gas Flaring Excess Gas.
*Occidental Issuing Bonds to Buy Anadarko! Investor orders exceed issue size by double?
*Iranian Bad Behavior Updates.

 

Profit Report!

What is really happening in Russia and what does it mean for us? Hint: There are reasons that Putin will likely stop short of direct U.S. conflict.

A Helpful Tour of The Toughest Markets in Modern History:

In ’73 and 74 we saw the most grueling pain of any time since 1929. The registered brokers on the NYSE, the only people allowed to enter orders, went from 96000 in 1973 to 36000 in 1975. In 1975, there were more registered real estate agents in the DFW area than there were registered reps in the entire country. The Value Line index was the most used non-NYSE, non-Dow Jones index at the time. It was down 85% at the low level in 1974. There were many investors who swore never to buy another stock or mutual fund during their lifetime.
The dividend yield on Exxon stock was over 10% that year. The 1981 time frame was the end of the 16-year range bound market. It was like the August days of a long hot summer – little interest and little action. Volume had dwindled so low that, when the rebound started in 1982, the daily volume on the exchange doubled. Ronald Reagan had taken office in 1981 and the rebound of interest in business and the economy began to show in the stock markets.
The 1987 time frame was another period where the Federal Reserve had really over-reacted. Interest rates spiked and the stock markets reacted. The over-all damage was much more limited and many equity accounts actually finished the year at a profit. The one-day 20% plus decline was shocking but, after a lot of margin calls, the recovery was rather swift and the markets had healed a lot by year-end. – Pappa Dean

 

Research Round Up!

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