It seems investors, today, are getting a bit nervous due to two major events this morning.
First of all, a portion of the yield curve has inverted … and since yield curve inversion has historically been used to forecast a slowdown in economic activity … many are worried about what the tea leaves might be telling us. What is especially interesting is, according to Daily Shot, it seems there is a bolstering of the thought that the Fed might be cutting rates again in 2020 … something that would typically not be done if the strong economic advance keeps rolling along.
Not helping those invested, of course, is a Bloomberg report claiming that JP Morgan Asset Management feels cash (you heard this correctly … cash) offers a better “risk-adjusted-return” than equities … for the first time in a decade.
A second bit of concern is an aftershock from the G20 meeting. If you recall, this ended with a well-received announcement by the administration that … not only was the meeting with China a success … but tariffs on U.S. autos were being reduced. The problem? There is no confirmation on paper … and any gleeful announcement related to a trade agreement only seems to be coming from the U.S.
Could things have been misunderstood? Investors certainly hope not.
I included a report yesterday on the (allegedly) drunk driver … asleep at the wheel of a Tesla … eventually stopped by the police. I did not have information on how far the car went in “self-driving” mode … but just found out. 7 miles! You can be sure the Tesla advertising department is trying to figure out a way to use this in some future ad … though, of course, in all likelihood they won’t be able.
On a final note for today, I created utter confusion when I texted my wife that I was going to take my son to the mall to go Christmas shopping and to see Satan.
I hate the person who invented auto-correct.
May he burn in hello.
Have a great day,
Joseph G. Witthohn, CFA
Emerald Asset Management PA, LLC
610 Freedom Business Center Drive
King of Prussia, PA 19406
Direct: (610) 285-9905
… as of 11:19 AM today …
Quick Look at the News
Is the flattening of the yield curve a cause for concern? Some bond traders think so, as it might be providing the famed canary in the coal mine for what lies ahead (CNBC)https://www.cnbc.com/2018/12/03/the-thing-the-bond-market-most-feared-is-beginning-to-happen.html
... but it appears that investors have more than bonds on their minds right now ... as the shouting over the success of U.S.-China trade talks has suddenly gotten a bit quieter (CNBC)https://www.cnbc.com/2018/12/04/stock-market-dow-futures-fall-amid-us-china-trade-deal-skepticism.html
... and speaking of quieter ... sales of the electric car are finally starting to rev up (a weak attempt at a car joke here) ... so here is what you might want to know (EDF)https://www.edf.org/blog/2018/01/26/are-electric-vehicles-finally-taking-heres-what-you-need-know
Oh, how lazy we have become. A newspaper to get news? Ha! That's for old people. The internet or, gasp, television ... is where it's at (Journalism)http://www.journalism.org/2018/12/03/americans-still-prefer-watching-to-reading-the-news-and-mostly-still-through-television/
That guy who sued to have his age change? The Dutch courts said forget about it ... which means my online claim to be a 21 year old bodybuilder might not be used as legal identification (Time)http://time.com/5469144/dutch-court-age/
... but while comments on a piece of paper are only words ... fingerprints and facial recognition are being used more often ... and one airport is now using your face for id (CNN)https://www.cnn.com/travel/article/atlanta-airport-first-us-biometric-terminal-facial-recognition/index.html
Who is the highest paid YouTube star? Some 7-year-old kid who is shown on video opening toys. That money will buy a heck of a lot of Legos ... a heck of a lot (BBC)https://www.bbc.com/news/business-46427910