Trade talk moved the markets again this week. The week started over trade concerns amid comments by the President that trade issues may be unsettled well into next year. By mid-week the tone had changed to more optimistic comments. And the markets were lurching lower and higher each day depending on the trade news. WSJ It is worth repeating from our previous commentary that the U.S. economy is 70% based on the consumer. If consumer spending is solid, the U.S. economy tends to act accordingly. It's not that trade isn't important, but the U.S. is not an export-dependent economy. Trade issues have an outsized impact on agricultural and manufacturing with some disruption to technology supply chains. But unless the trade issues dent consumer confidence and spending, the effect on the overall U.S. economy shouldn't be significant. The job growth numbers being released Friday morning, are a much more significant news item to watch. So, for the most part, the up and down caused by trade speculation can be ignored.
With all the snow that arrived this week, it certainly feels like the Holidays in the Northeast. Enjoy the winter wonderland with a hot cup of cocoa while reading The Friday Buzz!
- ADP Reports Smaller Job Growth: The ADP National Employment Report showed private jobs growing only 67,000 in November when 150,000 was expected. The Bureau of Labor Statistics (BLS) will be releasing their overall jobs report Friday morning. Sometimes the ADP report is off by a large number compared to the BLS. Nonetheless, the lower than expected ADP number will make the BLS report that much more important. ADP CNBC
- Time to stock up on French champagne and cheese? This week the Trump administration proposed slapping duties up to a whopping 100% on French products. The move was meant to penalize France for it's proposed 3% tax on technology companies that are overwhelmingly U.S. based. Other countries may also be in the crosshairs for having similar taxes that affect U.S. digital companies. The proposed duties need Presidential approval and currently have no effective date, but you may want to stock up now on French champagne and cheese or find some alternatives. Markets Insider Reuters Forbes list of best U.S. sparkling wines
- Coffee too? You may want to stock up on coffee as well. The International Coffee Organization is estimating that next year consumption of coffee will outstrip current production. Unfavorable weather and prolonged low international prices have contributed to lower production while consumption has increased. This has lead to yearly highs in coffee prices, which may continue. So, stock up on the good stuff. MarketWatch Gear Patrol's list of the top 25 coffee roasters
- Stock Investors Should Focus on the Long-term: As investment managers, we at RSWA are focused on the long-term. This means that we are strategic about our investment strategy and do not tactically move into and out of investments over short time frames trying to catch rising or falling prices. With headlines always proclaiming the sky is falling, it is sometimes difficult for investors to stay focused on the long-term. Here is an article that is a good reminder that it is time-in the markets versus timing the markets that helps the long-term investor. Blackrock
- Mammoth Tusk Gold Rush? Due to global warming, permafrost soil is thawing. The thawing makes it easier to discover what is buried underneath, mainly the remains of mammoths. Though I find it fascinating that the tusks and skeletons of the extinct species are being discovered all the time, there is a shady and dark underbelly resulting from the discoveries. Wired
- Estate Tax Credit Protections Enacted: The 2017 tax law doubled the estate and gift tax exclusion amounts not subject to estate tax. But the higher limits were temporary and set to expire at the end of 2025. There were some concerns that gifts made between 2018-2025 might come under IRS scrutiny if estate exclusion amounts were lowered after 2026 as scheduled. But the IRS recently ruled that "individuals planning to make large gifts between 2018 and 2025 can do so without concern that they will lose the tax benefit of the higher exclusion level once it decreases after 2025." So, wealthy individuals can use the higher credit exclusion amounts now, to protect assets in the future. Individuals can transfer up to $11.58M to beneficiaries in 2020 without paying estate tax, and married couples can transfer twice as much. BloombergTax I BloombergTax II
- Finding Cheap Airfares: Let's face it, almost everyone likes to find a cheap airfare to a hot destination. But how do you do it? Well, look for announcements of new flights by a carrier going to a new destination. As this article points out, a lot of times you can get half off the usual airfare by targeting the destination of new flight announcements. Happy traveling! WSJ
Thank you for reading The Friday Buzz! Have a great weekend!