As I write this, Robert Mueller has begun testifying before Congress. His testimony may or may not turn out to be political fireworks, but we doubt that it will be a market mover. What might move the financial markets is the decision to be made at the upcoming Federal Reserve rate setting meeting that starts on July 30th. The markets expect a rate cut. Will anything less than 0.50% be a disappointment to investors? A smaller, 0.25% drop, would be the compromise between committee members who want a 0.50% rate cut and those who question why any cut is warranted, given the growing economy and strong employment numbers.
For a policy development that may have major implications over time, see the note on Big Tech and Antitrust. See the note on how to decrease the odds of getting Alzheimer’s through controllable lifestyle interventions. There are also financial planning ideas, including a suggestion for couples, and even a book recommendation for those of you who enjoy the espionage genre.
- Mueller, Trump and the Constitution: Irate over the Mueller investigation and testimony, President Trump has now begun claiming in speeches that Article II of the Constitution grants him “the right to do whatever I want as president…” Washington Post
- Presidential Elections and the Economy: Can the Federal Reserve forestall a U.S. recession by aggressive rate cutting? The answer matters to all, including President Trump-hence his efforts to pressure the Fed into a more dovish policy. Understand that every incumbent president since Franklin D. Roosevelt, who has avoided a recession in the year leading up to the election, has been re-elected. Axios
- Big Tech and Antitrust: It has been a long time since we have had a meaningful antitrust policy in the U.S., but bi-partisan support is growing to break up the technology behemoths. These companies (i.e., Facebook; Google; Apple; Amazon, etc.) have immense power over our lives and perceptions. Even though I use technology as much as most, I find it deeply concerning. New York Times
- Fed Has Three Rate Options: This article succinctly lays out the three Fed rate options on the table for the upcoming FOMC meeting. It can cut rates 0.25% or 0.50%. Alternatively, it can leave rates unchanged, which we believe would likely trigger a downward market movement. CNBC
- Bipartisan Budget and Debt Deal: A two-year agreement to increase federal spending and raise the debt ceiling has apparently been reached, averting a major financial risk. Credit Treasury Secretary Mnuchin and Speaker Pelosi for this one. Our understanding is they worked together to hammer it out. Something in Washington finally worked! Washington Post
- Decrease Your Alzheimer’s Risk by 60%: Genes are not always destiny. Controllable lifestyle factors matter when it comes to incurring many serious diseases, including Alzheimer’s. A recent study showed that doing these five things can dramatically decrease your chances of incurring Alzheimer's: Do these five things and encourage your loved ones to do the same! Washington Post
- Does Financial Planning Help? We obviously believe so, and this Schwab Modern Wealth Survey confirms it. It also supports the idea that working with an independent planner, as opposed to a transaction oriented financial professional, is likely to lead to better outcomes. Charles Schwab
- Social Security Watch: Social security is not about to run out of money soon, but there is a long-term solvency issue that must be fixed. This article is a good primer on this issue, which is something we monitor. Boston Globe
- Family Meeting Suggestion: Anne and I have lately adopted the practice of sitting down at the kitchen table to plan together immediately after we get home from going out for Sunday breakfast. It takes around an hour, sometimes less. We quickly go through a variety of life planning areas: social (family and friends); travel; entertainment; home; and financial. We identify what we accomplished the past week and what we want to get done over the next week (and who will do it). It can be something as major as planning some travel for next year or as mundane as deciding who schedules and stays home for a plumber’s visit. It probably sounds like as much fun as a root canal, but I can sincerely say it works great for us. It gives us a simple but effective process for making decisions and moving our stuff forward. Recognizing that every family has different dynamics, I recommend it highly (or something similar).
- The New Girl: To my way of thinking, reading espionage thrillers is the perfect antidote to studying financial and economic data or even recovering from another humbling golf outing. Daniel Silva is hands down my favorite writer in this genre. I’m racing through his latest, The New Girl. It again features Gabriel Allon, now the head of Israel’s intelligence service, whose original cover was a world class restorer of damaged paintings. danielsilva.com
Feel free to send us feedback on any topic or make a request or to forward the notes on to anyone who might be interested.