Weekly Market Review: July 15, 2019

Weekly Market Review: July 15, 2019

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It was an “old movie” that long-time stock investors have seen before: the chair of the nation’s central bank calmed the fears of skittish investors and all but guaranteed that a rate cut would occur in the coming weeks, causing stocks to surge. Alan Greenspan, Fed Chair from 1987-2006, did it so often it became known as the “Greenspan Put,” i.e., whenever a financial crisis arose, the Fed would come to the rescue by lowering interest rates. Current Fed Chair Jerome Powell oversees an economy with a historically low jobless rate, low inflation and a stock market already at record levels, but he is still concerned that global speed bumps may eventually work their way into our economy – thus the need now for a rate cut in the near term (source: BTN Research).

Stock investors celebrated Chairman Powell’s comments to Congress last week by pushing the S&P 500 above 3,000 for the first time ever. The stock index closed at 3014 on Friday (7/12/19), its 10th record close this year and 217th in the ongoing 124-month bull run that has produced a gain of +453% since March 2009, equal to an annualized return +18.0% per year. Rumor has it that bulls don’t last forever, but that fact has been lost for now on this streak of more than 10 years (source: BTN Research).

OPEC, once the king of global oil production, has seen its status diminish with the boom of American shale oil. The 15-nation cartel was the source of just 29.8% of the world’s daily production of oil as of July 2019, its lowest total by percentage in almost 29 years, i.e., since September 1990. OPEC generated 39.5% of the world’s oil in April 1998 (source: International Energy Agency).

Notable Numbers for the Week:

  1. WHERE DID THEY GO? – The number of publicly listed companies, i.e., companies traded on an exchange,

has dropped from a peak of 8,090 in 1996 to just 4,336 today (source: theglobaleconomy.com).

  1. WANT A PENSION? – 83% of full-time state and local government employees were participants in a defined benefit pension plan in 2018. Just 16% of full-time workers in the private sector were participants in a defined benefit pension plan in 2018 (source: Urban Institute).
  2. RICHEST – The top 1% of wage earners in the U.S. reported at least $480,804 of pre-tax income in 2016 and own an estimated 29% of the total wealth in the country (source: Survey of Consumer Finances).
  3. GRAY HAIR OR NO HAIR – An estimated 56 million Americans will be at least 65 years old by the year 2020, i.e., one out of every six Americans. An estimated 73 million Americans will be at least 65 years old by the year 2030, i.e., one out of every five Americans (source: Census Bureau).

 

This material does not constitute a recommendation to engage in or refrain from a particular course of action. The information within has not been tailored for any individual. The opinions expressed herein are those of Michael A. Higley as of the date of writing and are subject to change. MML Investors Services, LLC (MMLIS) provides this article for informational purposes, and does not make any representations as to the accuracy or effectiveness of its content or recommendations. Mr. Higley is not an employee of MMLIS and any comments, opinions or facts listed are those of Mr. Higley.

This commentary is brought to you courtesy of MML Investors Services, LLC (Member FINRA, Member SIPC). Past performance isn’t indicative of future performance. An index is unmanaged and one cannot invest directly in an index. Material discussed is meant for informational purposes only and it is not to be construed as specific tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, it is not guaranteed. Please note that individual situations can vary, therefore, the information should be relied upon when coordinated with individual professional advice. Clients must rely upon his or her own professional advisor before making decisions with respect to these matters.