Markets “In a Nutshell” for October 29, 2019

Markets “In a Nutshell” for October 29, 2019

Investment Week at a Glance

Stocks were up last week. The Dow Jones Industrial average gained 0.70% while the S&P 500 was up 1.2%. The New York Stock Exchange Composite (2,000 stocks) rose 1.0%. The “average investor’s index” (Value Line index) was up 1.8%. Foreign stocks (EAFE index) gained 1.25%. Bond yields rose (bond prices down) as the 10 year Treasury ended at 1.80%. (Data sources: Barron’s Financial, Wall Street Journal)

Stocks Entering Best Performance Period

According to moneychimp.com the best two months for stocks are coming up. Since 1950, the S&P 500 stock index has returned an average 1.39% in the month of November while December has returned an average of 1.35%. 2019’s October return of 1.54% for the S&P 500 has doubled the average October return of 0.66%. The worst month on average since 1950? September with an average loss of 0.62%.

Barron’s Money Poll Shows Concern For Stocks

The latest Barron’s Money Poll shows growing concern about the future direction of the U.S. stocks market in the next year or so. In the twice a year poll of investment advisors, only 27% consider themselves bullish on stocks while 31% are bearish and 42% neutral. Election concerns and trade war fears are making the risk/reward tradeoff weak say advisors. Despite the fear of a weak market the next year or so, the longer term outlook still looks strong as the consumer and economy still look to grow.

Student Debt To Be Forgiven?

A. Wayne Johnson, former government official for the Office of Federal Student Aid, has called for a near $1 billion government bailout of federal student debt. Johnson says the system is broken and estimates 40% of student loans could default by 2023 (there is about $1.6 trillion of loans outstanding). How would the government pay for the debt forgiveness? The biggest voices call for the enactment of modern monetary theory (MMT) which would have the government print money to pay for programs such as health care and student debt forgiveness. This will likely be a big topic in the presidential campaign over the next year.

Quiz:

Quiz:

China is still a communist country but has grown to the 2nd largest economy in the world at $14 trillion. What percentage of their economy is owned by private individuals?

a.   80%

b.   0% (zero)

c.   50%

d.   10%.

 

 

 

Answer is below.

 

Have a good week!

 

 

 

 

 

Answer to quiz:

a.   80%.