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https://lanternwa.com/

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Major Indexes For Week Ended 11/8/2019

Index Close Net Change % Change YTD YTD %
DJIA 27,681.24 +333.88 1.22 +4,353.78 18.66
NASDAQ 8,475.31 +88.91 1.06 +1,840.03 27.73
S&P500 3,093.08 +26.17 0.85 +586.23 23.39
Russell 2000 1,598.86 +9.53 0.60 +250.30 18.56
International 1,976.65 +9.95 0.51 +256.77 14.93
10-year bond 1.93% +0.20% -0.76%
30-year T-bond 2.42% +0.21% -0.60%
International index is MSCI EAFE index. Bond data reflect net change in yield, not price. Indices are unmanaged and you cannot directly invest in an index.


Is The New Record High In Stocks Irrational?

The Standard & Poor's 500 stock index, the key benchmark of current financial and economic conditions, closed at an all-time high for the second week in a row.

Is it irrational exuberance?

These four charts show the latest data on key fundamental economic factors driving financial market prices.

Third quarter economic growth reported by the U.S. Bureau of Economic Analysis came in at 1.93%. Three of the four factors in economic growth— business investment, net exports, and state and local government spending— did not contribute to growth but consumer strength offset them and was the source of the 1.93% quarterly growth rate for the U.S. in the third quarter of 2019.

Meanwhile, the manufacturing sector— which accounts for just 11% of U.S. growth— remained in recession but rebounded slightly last month, according to the latest data from the Institute of Supply Management. It may have bottomed.

The Federal Reserve's key lever in promoting growth, the yield curve, uninverted, indicating that fears of a recession may be overblown, and the financial obligations ratio— a key measure of consumers' free cash flow after paying monthly fixed expenses— remained near its strongest level in decades after ticking lower last quarter.

No one can predict the next move in the stock market. However, the latest economic data indicates that the record stock prices are pretty darn rational.


This article was written by a veteran financial journalist based on data compiled and analyzed by independent economist, Fritz Meyer. While these are sources we believe to be reliable, the information is not intended to be used as financial or tax advice without consulting a professional about your personal situation. Tax laws are subject to change. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. No one can predict the future of the stock market or any investment, and past performance is never a guarantee of your future results.


The Fed Just Cut Rates Again; What's It Mean To You?

The Fed cut rates again on October 30th, for the third time in 2019. What's it mean to your long-term financial plan?

The rate cut is a reversal in policy and not what the Fed had expected to do, which is worrisome because the Fed has caused every recession in modern U.S. history by making a policy mistake. However, admitting its previous financial plan had been wrong, the Fed's abandonment of its earlier forecast, that inflation was a danger, is encouraging.

Federal Reserve policy has grown far more responsive to economic fundamentals and market sentiment. Former Fed Chair Ben Bernanke, who had studied financial crises for decades before becoming the nation's top central banker, was the right person to guide the economy when the global financial crisis occurred in 2008. He implemented policies never-before tried in a major world economy. His successor, Janet Yellen, a labor economist, who fatefully had spent her professional life studying how to increase employment, continued Mr. Bernanke's quantitative easing plan and deftly extended the expansion.

Although opinions about the direction of interest rates or stock prices in the next year or two will always vary, it is clear that the Federal Reserve has made progress in achieving its dual mandate to promote employment and control inflation. The Fed— led by Jerome Powell and backed by a deep team of the world's best minds— has abandoned its long-held forecast for a 2% inflation rate— and in admitting its mistake to raise rates on December 14th, 2018, its change of policy should be viewed in the context the Fed's progress. The third interest-rate cut of 2019 signaled that the Fed is no longer worried about inflation and determined to defend the 10-year long expansion in 2020 and beyond, even if it means admitting it made a mistake and is changing course.

Amid the cacophony of modern-day living, don't lose sight of the unceasing progress in the world, and always try to frame your long-term investment perspective from this easily overlooked trend of civilization.


This article was written by a veteran financial journalist. While these are sources we believe to be reliable, the information is not intended to be used as financial or tax advice without consulting a professional about your personal situation. Tax laws are subject to change. Indices are unmanaged and not available for direct investment. Investments with higher return potential carry greater risk for loss. No one can predict the future of the stock market or any investment, and past performance is never a guarantee of your future results.


The above referenced information was obtained from reliable sources, however Lantern Investments, Inc. and Lantern Wealth Advisors, LLC cannot guarantee its accuracy. Opinions expressed herein are subject to change. Past performance is no guarantee of future results. Asset allocation and diversification do not assure a profit or protect against losses in declining markets. Any information given on the site is informational and illustrative but does not recommend actions as the information may not be appropriate to all situations. It is important that you consider your tolerance for risk and investment goals when making investment decisions. Investing in securities does involve risk and the potential of losing money. Links to other sites are provided for your convenience. Lantern Wealth Advisors, LLC and Lantern Investments, Inc. do not endorse, verify or attest to the accuracy of the content of the web sites that are linked and accept no responsibility for their use or content. Lantern Wealth Advisors, LLC and Lantern Investments, Inc. do not provide tax, accounting or legal advice.