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 (631) 923-2485
Investment Newsletter - Q3 2019

Hot, hot, hot! That could be referring to the weather, or the stock market for a lot of 2019.
We give more detail on the past quarter and outlook further below. If you would like, we also have a link to a Q3 2019 Global Market Outlook by Russell Investments. To see the full report, click here .

In this issue of our Investment Newsletter:

  • Our current investment topic is: Exchange Traded Funds: Not Always a Passive Approach

  • An overview of recent market activity, along with Our Perspective...

  • A recap of the performance of major market indices from the past quarter 

  • Some memorable financial quotes

  • Upcoming Economic Calendar

You will find past investment articles, by clicking the Articles tab above, or directly on our website, found under Periodicals. 

If there is a topic of interest you would like to see covered in the future, please reply back to this email to let us know, or  click here . Likewise, if you have any questions on this or anything else, feel free to reply back.
Investment Topic

Exchange Traded Funds: Not Always a Passive Approach

For our investment topic, " Exchange Traded Funds: Not Always a Passive Approach " we attempt to give a high-level overview of the topic. To learn more, please click here
Our Perspective on Recent Market News and Activity
Our synopsis of the past quarter, a look ahead, and putting it all in perspective:
2nd Quarter 2019 in Review : Stocks and bonds had solid gains in the second quarter primarily due to a shift in perceptions that the Federal Reserve headed by Jerome Powell will cut interest rates, which helped extend a rally that sent the S&P 500 to record highs. The markets overcame an escalation in the trade fight between the U.S. and China, finishing up 17.35% so far this year, and this marked the best 1 st half performance of the S&P 500 index since 1997. 

This extension of a decade long bull market for stocks helped erase the steep losses that shook the markets in the 4 th quarter of 2018. You may recall that the S&P 500 index ended the fourth quarter down 14%. By April of 2019, the market had clawed back to its October 2018 highs. April saw the bulk of the market’s second quarter gains due to first quarter earnings topping what had become many beaten down expectations combined with the belief that the U.S., and China were close to reaching a trade deal. That optimism vanished in May with a tweet from President Trump saying that he was disappointed in how slowly negotiations were moving and that he would drastically ramp up U.S. tariffs on Chinese imports. However, in June Chairman Powell helped soothe some of the fears by saying the central bank was closely monitoring the escalation in tensions and gave an indication that it might respond by cutting rates if the economic outlook were to deteriorate. Should there be a trade agreement with China however, that could lower the chances of the Fed cutting rates in the near future, the anticipation of which has lifted stocks for the last month. Smaller company shares which typically are less susceptible to trade tariff concerns and international turmoil, lagged the broader indexes which is a move that some analysts blamed on concerns that the U.S. economy’s growth is cooling. Falling interest rates helped fuel a bond rally which also helped to recoup from the malaise that affected fixed income investments in 2018 and has started to reignite home buying due to mortgage rates coming back down.   

Looking forward to Q3: The big question remains the same as it was heading into the last quarter, “Are we heading into a recession or does this economy still have more time to grow?”  Markets are soaring but risks are mounting. The uncertainty over trade negotiations is clouding the picture and outlook for businesses’ profits. In the coming weeks, companies will start to post their second quarter earnings. According to FactSet, S&P 500 companies are expected to post a slight year-over-year decline in earnings for the 2 nd and 3 rd quarters of 2019. This would extend a downward trend that began in Q1 2019. If those analysts’ expectations come true, that would market the longest streak of declines since 2015-16. That being said, few believe that the U.S. will slide into a recession imminently. In a June survey conducted by the Wall Street Journal, only 4.9% of economists expected the next recession to start in 2019. Nearly half said that they expected a recession in 2020, and 37% did not expect a recession until 2021.

That stated, businesses are preparing for a recession as well. A survey by Bank of America, showed that more than two-thirds of small business owners, are already preparing for a downturn, such as cutting expenses, or setting aside cash. As we have said previously, a recession will eventually come, and it will not be the end of the world and there will be an eventual recovery as always happens. Investing is always about the long term as short term predictions are always “unpredictable”.   

Please remember that all investments carry some level of risk, including the potential loss of principal invested. They do not typically grow at an even rate of return and may experience negative growth. As with any type of portfolio structuring, attempting to reduce risk and increase return could, at certain times, unintentionally reduce returns.
Major Market Indices
Below is the Q2 '19 price return performance of some of the major indices:
Some Memorable Financial Quotes 

Some well known financial sayings where the originator is unknown:

"Buy low, sell high"

"Don't let the tax tail wag the investment dog"

"It is much easier to borrow money for college than to borrow money for retirement"

"Bulls and bears make money. Greedy pigs get slaughtered."

"Why did God invent economists? To make weather forecasters look good" (though this is close to a similar attributable quote below)

John Kenneth Galbraith (economist): The only purpose of economic forecasts is to make astrology look respectable.
Isaac Newton (he lost 20,000 pounds, around $3 million USD in today's money, due to his speculation in the South Sea Company stock in the 1720s during the bubble) : “I can calculate the motion of heavenly bodies, but not the madness of people.”
Robert Hastings: “It isn't the burdens of today that drive men mad. It is the regrets over yesterday and the fear of tomorrow. Regret and fear are twin thieves who rob us of today.” 

Harry S Truman: “It's a recession when your neighbor loses his job; it's a depression when you lose yours.”
Henny Youngman: “I've got all the money I'll ever need. If I die by 4:00.”  
On the Investment Horizon
Upcoming Key Dates on the Economic Calendar 

  • First Friday of each month: Unemployment report for the prior month, released at 8:30AM.

  • Thursday, July 4 - Independence Day: NYSE closed.
  • Wednesday, July 10 - Federal Open Market Committee (FOMC) releases minutes of previous meeting at 2PM.
  • Friday, July 26 at 8:30AM - GDP, 2nd quarter 2019 (advance estimate), and annual update.
  • Tuesday, July 30 - Wednesday, July 31: The Federal Open Market Committee (FOMC) meets, and releases their announcement on Wednesday at 2PM.
  • Wednesday, July 31 at 2:30PM - Fed Chair Jerome Powell to hold his quarterly press conference to explain the FOMC's latest projections and stance.

  • Wednesday, August 21 - Federal Open Market Committee (FOMC) releases minutes of previous meeting at 2PM.
  • Thursday, August 29 at 8:30AM - GDP, 2nd quarter 2019 (second estimate); Corporate Profits, 2nd quarter 2019 (preliminary estimate)

  • Monday, September 2 - Labor Day: NYSE closed.
  • Tuesday, September 17 - Wednesday, September 18 - The Federal Open Market Committee (FOMC) meets, and releases their announcement on Wednesday at 2PM.
  • Wednesday, September 18 at 2:30PM - Fed Chair Jerome Powell to hold his quarterly press conference to explain the FOMC's latest projections and stance.
  • Thursday, September 26 at 8:30AM - GDP, 2nd quarter 2019 (third estimate); Corporate Profits, 2nd quarter 2019 (revised estimate).

If you desire an appointment, have any questions on any of this material, or any other financial subjects may relate to your own financial circumstance, please reach out to us at the contact information below:
Brian Cohen, CCO; email: ; phone: 631-923-2487
Chris Congema, CFP®;  email: ; phone: 631-923-2486
Joe Favorito, CFP®; email: ; phone: 631-930-5336

Direct office email:  
Direct phone: 631-923-2485

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 Landmark Wealth Management, LLC
900 Walt Whitman Road, Suite 208
Melville, NY 11747
 (631) 923-2485