4/12/2019 Weekly Update: The Slumbering Beast
by Zach Marsh on Jun 7, 2019
S&P 500 +0.49%
10 Year Treasury -0.42%
Weekly Update: The Slumbering Beast
Just a brief note this week as the market continues to grind higher. I guess the biggest news this week is that following 8 straight days of gains, the S&P 500 was down on Tuesday, before resuming its rally the remainder of the week. If the irony was lost in my delivery I apologize. While everyone likes a winning market, it does create a bit of skepticism when markets charge uni-directional for months at a time. The rip rally off of the lows in December is truly a sight to behold, reminding me of similar rebounds of the late 90’s.
Similar to the current market, in 1998, following the mini-financial crisis caused by Long Term Capital Management’s collapse, the S&P rallied nearly 30% in just over a month and a half. The large cap index would manage an additional 26% gain in the following 18 months before eventually rolling over into a deep bear market. As the saying goes, “History rhymes it doesn’t repeat.” The future of this market may or may not follow the direction of the 90’s tech bubble. However, time doesn’t seem to be on the market’s side. The Fed’s resumption of tightening monetary policy would seem likely should this rally continue, and should they not resume tightening the consequences may prove even graver. For now, it looks like the market will continue to try and lull us to sleep before perhaps revealing its true nature.
Have a good weekend.
Thanks for reading,
Zach and Dave
All opinions are subject to change without notice. Neither the information provided nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. Past performance is no guarantee of future results. Tax laws are complex and subject to change. Calibrate Wealth LLC, does not provide tax or legal advice and are not “fiduciaries” (under ERISA, the Internal Revenue Code or otherwise) with respect to the services or activities described herein except as otherwise provided in writing by Calibrate Wealth. Individuals are encouraged to consult their tax and legal advisors (a) before establishing a retirement plan or account, and (b) regarding any potential tax, ERISA and related consequences of any investments made under such plan or account.
This material does not provide individually tailored investment advice. It has been prepared without
regard to the individual financial circumstances and objectives of persons who receive it. The strategies
and/or investments discussed in this material may not be suitable for all investors. Calibrate Wealth
recommends that investors independently evaluate particular investments and
strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a
particular investment or strategy will depend on an investor’s individual circumstances and objectives.
Investing in commodities entails significant risks. Commodity prices may be affected by a variety of
factors at any time, including but not limited to, (i) changes in supply and demand relationships, (ii)
governmental programs and policies, (iii) national and international political and economic events, war
and terrorist events, (iv) changes in interest and exchange rates, (v) trading activities in commodities
and related contracts, (vi) pestilence, technological change and weather, and (vii) the price volatility of a commodity. In addition, the commodities markets are subject to temporary distortions or other
disruptions due to various factors, including lack of liquidity, participation of speculators and
Foreign currencies may have significant price movements, even within the same day, and any currency
held in an account may lose value against other currencies. Foreign currency exchanges depend on the
relative values of two different currencies and are therefore subject to the risk of fluctuations caused by
a variety of economic and political factors in each of the two relevant countries, as well as global
pressures. These risks include national debt levels, trade deficits and balance of payments, domestic and
foreign interest rates and inflation, global, regional or national political and economic events, monetary
policies of governments and possible government intervention in the currency markets, or other