T his Week from Jesse Hurst
Jesse W. Hurst, II
CFP® CERTIFIED FINANCIAL PLANNER™
AIF ® ACCREDITED INVESTMENT FIDUCIARY
 
The Good Doctor and Economics
 

For everyone who has been in my office, you know that I am a huge fan of Dr. Seuss. From my earliest days of reading before kindergarten, these books were a staple of my childhood. I loved the stories, the amazing illustrations and imagination, and the metered cadence used in his writing.
 
As I got older, I came to appreciate the messages that were conveyed in his stories. His views on protecting the environment in the book "The Lorax". His obvious disdain of racism and discrimination in "The Sneetches". His concerns about the rights of workers in the story of "Yertle the Turtle". I also have given the book "Oh the Places You'll Go" to many students as they graduate high school and move on in life as encouragement and insight toward what the future may hold.
 
After Dr. Seuss passed away in 1991, a whole new cadre of artwork started to appear. These were the private works of Dr. Seuss that he had done for his own enjoyment. Many of these were based on his childhood, his artist influences and the messages that were important to him in life. I was lucky enough to be introduced to these works nearly 18 years ago when I was attending a conference in the San Diego area and happened upon an art gallery containing some of the first pieces to be released.
 
Many of you will recognize the piece The Economic Situation Clarified, which has been on the walls of my office for many years. There were only 295 prints created, and it has been sold out for many years. This piece was done in 1975 right after the 73-74 economic and stock market downturn that was triggered by the Arab oil embargo. For those of us old enough to remember, we waited in line for gas on certain days of the week for long periods of time. Then President Ford addressed the nation and said, "I must say to you that the state of the union is not good. Millions are out of work: recession and inflation are rotating the money of millions more."
 
Flash forward to today. Inflation is low, unemployment is at near 50-year lows, the economy grew at 3% last year for the first time in many years. However, as we look towards the future there are many unanswered questions: 
 
   1) Will the Federal Reserve Bank continue to raise interest rates?
   2) What will be the outcome of the Mueller investigation?
   3) Will the economy continue to slow, and when will the next recession come?
   4) Will we be able to resolve trade/tariff issues with China, Europe and Japan?
   5) Will there be an agreement on an infrastructure spending bill that would provide additional stimulus to the economy, as well as sorely needed improvements to our crumbling roads, bridges and airports?
   6) Can reasonable heads prevail and come up with a coordinated plan for border security and immigration?
 
We at Impel Wealth Management pay enormous attention to these issues for the benefit of our clients and the investment assets they entrust to us. We read what seems like volumes of economic and investment data each month. However, when we need a break from all of this and a little more perspective, don't be surprised to see us pick up some wit and wisdom from the Good Doctor. Sometimes humor is a good antidote to what is going on in the world as we all keep moving life forward together.
 


Jesse




Weekly Market Commentary
April 1, 2019
 


The Markets
 
"Fascinatingly counterintuitive..."
 
That's how Michael Arone, an investment strategist, described the U.S. market environment to Avi Salzman of Barron's:
 
"'Stocks are rallying, but bond yields are reflecting much lower growth.' Stocks rose during the quarter because the Fed backed away from raising interest rates, and investors grew more confident that the U.S. and China would sign a trade deal, Arone said. The market was also rebounding from a very rough fourth quarter - 'conditions at the end of the year were wildly oversold,' he noted."
 
Through the end of last week, the Standard & Poor's 500 Index was up more than 13 percent year-to-date, despite falling corporate earnings and modest consumer spending gains.
 
Consumer optimism may have played a role in U.S. stock market gains. The University of Michigan's Surveys of Consumers Economist Richard Curtin reported:
 
"...the last time a larger proportion of households reported income gains was in 1966. Rising incomes were accompanied by lower expected year-ahead inflation rates, resulting in more favorable real income expectations...Moreover, all income groups voiced more favorable growth prospects for the overall economy...Overall, the data do not indicate an emerging recession but point toward slightly lower unit sales of vehicles and homes during the year ahead."
 
The Bureau of Economic Analysis released its report on economic growth in 2018 last week. Real gross domestic product (GDP), which is a measure of economic growth after inflation, was revised down to 2.2 percent in the fourth quarter of 2018. Growth was up 2.9 percent for the year, though, which was an improvement on 2017's gain of 2.2 percent.
 
Slowing economic growth gives weight to bond investors' expectations, while consumer optimism supports stock investors' outlook. Divergent market performance and conflicting data make it hard to know what may be ahead. One way to protect capital is to hold a well-diversified portfolio.


Data as of 3/29/19
1-Week
Y-T-D
1-Year
3-Year
5-Year
10-Year
Standard & Poor's 500 (Domestic Stocks)
1.2%
13.1%
7.3%
11.3%
8.7%
13.7%
Dow Jones Global ex-U.S.
-0.3
9.4
-7.1
5.8
0.5
6.7
10-year Treasury Note (Yield Only)
2.4
NA
2.7
1.8
2.7
2.7
Gold (per ounce)
-1.2
1.1
-2.2
1.9
0.1
3.4
Bloomberg Commodity Index
-0.8
5.7
-7.3
0.7
-9.6
-2.8
DJ Equity All REIT Total Return Index
1.4
17.2
20.4
8.0
10.0
19.6
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron's, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

How much does it cost to make money?
You may not have given it much thought, but it costs money to make money. In fact, the costs of the metals required to make some U.S. coins is higher than the value of the coins! George Washington and Abraham Lincoln might not approve, if they knew. Take this quiz to see what you know about the cost and value of U.S. coins.
 
       1. How much did it cost the U.S. Mint to make a U.S. penny in 2018?
    1. 0.5 cents
    2. 1.25 cents
    3. 2.06 cents
    4. 3.0 cents
       2. How much did it cost the U.S. Mint to make a U.S. nickel in 2018?
    1. 1.25 cents
    2. 4.97 cents
    3. 6.03 cents
    4. 7.53 cents
       3. What makes a coin valuable to a collector?
    1. Metal
    2. Age
    3. Rarity
    4. All of the above
       4. Which of these coins is the most valuable to collectors?
    1. 1849 Coronet Head Gold $20 Double Eagle
    2. 1913 Liberty Nickel
    3. 1943-D Lincoln Wheat Cent Penny
    4. 1835 Classic Head Gold $5 Half Eagle
Weekly Focus - Think About It

According to the Federal Reserve, the estimated lifespan of a $10 bill is 4.5 years. The estimated lifespans of a $5 and $1 bill are 5.5 years and 5.8 years, respectively. A $100 bill may last 15.5 years because it circulates less frequently.
 
Answers:
  1. It cost 2.06 cents to make a one-cent coin that few people use. A group of citizens has been encouraging the government to retire the penny.
  2. It cost 7.53 cents to make a nickel in 2018.
  3. All of the above.
  4. The 1849 Coronet Head Gold $20 Double Eagle is worth more than $16,600,000. It is one of the rarest U.S. coins.

Best regards, 
 
Jesse Hurst
 
Impel Wealth Management 
 
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Securities and advisory services offered through Cetera Advisors LLC, member FINRA/SIPC, a broker/dealer and a Registered Investment Adviser. Cetera is under separate ownership from any other named entity.
  
These views are those of Carson Group Coaching, and not the presenting Representative or the Representative's Broker/Dealer, and should not be construed as investment advice.
 
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named broker/dealer.

 
* Government bonds and Treasury Bills are guaranteed by the U.S. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.  However, the value of fund shares is not guaranteed and will fluctuate.

 
* Corporate bonds are considered higher risk than government bonds but normally offer a higher yield and are subject to market, interest rate and credit risk as well as additional risks based on the quality of issuer coupon rate, price, yield, maturity, and redemption features.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. You cannot invest directly in this index.
* All indexes referenced are unmanaged. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.
* The Dow Jones Global ex-U.S. Index covers approximately 95% of the market capitalization of the 45 developed and emerging countries included in the Index.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the afternoon gold price as reported by the London Bullion Market Association. The gold price is set twice daily by the London Gold Fixing Company at 10:30 and 15:00 and is expressed in U.S. dollars per fine troy ounce.
* The Bloomberg Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT Total Return Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* The Dow Jones Industrial Average (DJIA), commonly known as "The Dow," is an index representing 30 stock of companies maintained and reviewed by the editors of The Wall Street Journal.
* The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system.
* International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.
* Past performance does not guarantee future results. Investing involves risk, including loss of principal.
* You cannot invest directly in an index.
* Stock investing involves risk including loss of principal.
* The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee it is accurate or complete.
* There is no guarantee a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
* Asset allocation does not ensure a profit or protect against a loss.

 
* Consult your financial professional before making any investment decision.
 
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Sources:
https://www.usmint.gov/about/reports (Click on 2018 Annual Report, go to page 10)


 
 
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Is there something we can help you with?  Please call me at 330.800.0182 or email me directly at jesse.hurst@impelwealth.com.

Impel Wealth Management 
2006 4th Street, Cuyahoga Falls, OH 44221    
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