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Time to Get “Real” About China, Iran, CBD, Longevity and Happiness Insights

Barring the unexpected, a trade deal with China is not imminent. Investors should prepare for escalating tariffs and heightened stock market volatility, as the market re-prices the risks to the currently strong U.S. economy. We advise ignoring tweets, anonymous reports, rumors and speculative news stories with a short- term focus. The context of the tariff conflict is that of a geopolitical high stakes struggle between the U.S. and China, making it challenging to find acceptable common ground.

Meanwhile, the Middle East is heating up to a near boiling point. Military skirmishes, if not all out war, involving Iran, the U.S. and our respective regional allies, are real possibilities. We also came across some fascinating articles on various topics relating to health, longevity and happiness. The long article on the medicinal potential of CBD is the best I have read. Lastly, please let us know if you have any specific areas of interest. A client asked about leasing vs buying a car, and we discovered an article that might benefit many clients and friends. Delighted to oblige.

  • A Long and Painful Trade War? Perspective on the China trade conflict has been in short supply. This article by Neil Irwin, one of my go-to writers on complex economic topics, does an excellent job explaining why there is no easy fix. New York Times Ray Dalio, the legendary hedge fund investor, explains that it is an ideological war. LinkedIn

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China Trade Conflict Takes Center Stage (and More!)

On the financial front, the buzz is all about China. Rumors are swirling that China has attempted a major retreat in the negotiation process, causing President Trump to threaten to impose large tariff increases, effective this Friday, coincident with the arrival of a China trade delegation. The markets are flip flopping (most flopping) on every China trade headline and gamesmanship ploy. We will pick up on the China trade story in next week’s Coffee Notes.

Please read on for more notes on the economy, the Fed and some terrific success stories about a small high school in Maine and a local Maine brewery that has won national recognition. 

  • China Trade Deal Near? High stakes negotiating tactics may ultimately work, but it’s “agita” for the stock market. Trump claimed this morning that China’s vice-premier is coming to the U.S. to make a deal. (CNBC) This comes on the heels of a report that China is attempting to re-negotiate previous positions. (CNBC)

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Economy Shows Strength, Preparing for College, & Tree-Firing Drones!

There has been a lot of economic data released the last week, almost all of it constructive for the economy and company earnings.  The U.S. economy keeps chugging along briskly, Europe is not as strong, but growing, and inflation remains tame.  Some would call that a "Goldilocks" scenario for the economy and stocks.  All that, and more in this week's articles.

Enjoy this week's The Friday Buzz, and have a great weekend!

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Continuing Care Retirement Communities – An Overview

Planning for the future, as we age, can be a daunting challenge. Few look forward to the day when living in the traditional single-family home or even a condominium becomes impractical due to care needs. The good news is that there are more and more attractive retirement living options with various types of attributes. For many, moving to a retirement community may be a net positive in quality of life because of all the benefits and amenities that make day to day living easier, freeing time for more enjoyable pursuits.

Helping clients plan for this transition has become an important area of our practice and deserving of more communication and discussion. This introductory article focuses on one type of retirement community, called Continuing Care Retirement Communities (“CCRCs”). CCRCs offer a continuum of living and care options and may be thought of as a relatively comprehensive solution.

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Stocks are Back, The Great Green Wall of Africa is Going Up, and Proposed Changes for 401(k)s!

The hiccup late last year in the stock market is fully over as stocks are back to new highs.  Job data continues to come in quite impressively, and GDP expectations for first quarter have improved.  Plus there's good news on electric cars and the African forests.

Enjoy this week's The Friday Buzz, and have a great weekend!

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A Possible Paradigm Shift in Economic Thinking; China and 5G; Cannabis in Maine (and More!)

Like many, watching the Notre Dame fire raging was both mesmerizing and deeply sad. If nothing else, it feels as if it warrants acknowledgment. Fortunately, no lives were lost. We are also aware that the Mueller report will be released after these Notes are drafted but before they are published. We could be proven wrong but expect that the report will not impact the financial markets in the short term. 

Current news that comes with heavy emotional overtones almost always overshadows developments that may have great implications for future policy decisions and markets. This week we identify some developments that are likely to continue shaping markets: one potential shift in economic thinking (i.e., whether recessions are inevitable); the importance of 5G in connection with China, and where Maine stands in the rapid rise of the cannabis industry. We also offer some lifestyle-oriented notes on various topics that we think you will enjoy.

  • Are Recessions Inevitable? Economic theory teaches that economies go through cycles of growth and contraction and that recessions are natural and unavoidable. But consider that Australia has not experienced a recession in close to 27 years. It has been called the "Australian Economic Miracle". What can we learn from Australia? If you accept, as some do, that either miscalculations by central banks (i.e., the Federal Reserve in the U.S.) or government regulatory failures are the proximate causes of almost all recessions in modern times, then you might still say that recessions are inevitable but only because of the likelihood of policy failures over long periods of time. Banker Jamie Dimon, for one, thinks the US economic expansion "could go on for years".

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Taxapalooza, Indecisive Yield Curve, and the RSWA NCAA Winner!

No one likes taxes, but it's something we all have to deal with this time of year.  So this week's Friday Buzz includes both practical and interesting tax articles, as well as some funny tax quotes and comics – because sometimes you just have to laugh… 😊

Enjoy this week's The Friday Buzz, and get those tax returns in!

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Happy Bull Market Anniversary, Fed Two-Step, Home Planning (and more)

It’s official. At ten years, the US. stock bull market is the longest in our history. Does a slowing economy present a credible threat to stock investors? Both Washington and Wall Street have eyes on the Fed, which will have a major say. We get into all this and more and appreciate your interest. Feel free to forward to anyone who might be interested.

  • Slowing U.S. Economy: Economists generally expect the U.S. economy to grow around 2 percent in 2019. Ruchir Sharma, the Morgan Stanley chief global strategist, makes a compelling case for why this growth rate is both sufficient and not that far off long term growth rates. Charles Evans, the Chicago Fed President, says the chances of a recession are low.

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This Week's Big News Movers Plus Articles on Procrastination and Clean Energy Storage

It has been a HUGE week in terms of big news events.  The Mueller investigation concluded, the yield curve inverted, and the Brexit deadline is today – yikes!  You'll find articles on those weighty topics along with some interesting and fun articles to balance out the reading in this week's The Friday Buzz.  As always, thank you for reading, and please share! 

  • The Mueller Investigation Concluded:  After twenty-two months, the Special Counsel concluded the President's 2016 presidential campaign was not involved in Russian election meddling.  That political fight is now over, it's sure to be replaced by other political fights though they won't have the same gravitas.  I believe President Trump was spotted doing victory laps around the White House this week…

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Fed Leaves Rates Unchanged As Economy Slows (and More!)

The Fed chose to leave short term rates unchanged at the FOMC meeting this week, announcing that it did not foresee more rate hikes this year. The decision and announcement reinforce that the Fed is increasingly wary of current risks and is signaling that it will keep its foot off the interest rate brake indefinitely. Apart from the Fed and the economy, we encourage you to check out some interesting planning notes (e.g. Roth IRAs and retirement) and lifestyle notes relating to health and happiness as it relates to location. 

  • Why the Fed Turned Dovish: Nouriel Roubini, the widely followed NYU economics professor,  offers his insights into why the Fed has abandoned, at least temporarily, its plan to hike short term rates higher.

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