Market DataBank: 3Q 2019

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For the quarter, stocks posted a +1.7% gain. It followed a +4.3% gain in the second quarter.



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American blue-chip companies were the winners among major global share markets.

Since the financial crisis of 2008, the U.S. has led major world economies in its growth, and that’s propelled large-cap S&P 500 companies as well as U.S. small- and mid-sized companies to outperform stock indexes of the other major economies of the world.

Europe over the past five years was stuck in slow-growth, a condition that may not change in the years ahead.

China’s fledgling stock market showed the strongest returns of the foreign stock markets. However, Chinese control over the share market makes Chinese stocks subject to unusual financial as well as political risk.



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This five year snapshot of returns on different industry sectors of the S&P 500 stock index shows the tech sector – dominated by Apple, Amazon, Facebook, and Netflix – showed an astounding +131% return in the five years shown. These higher-risk growth companies paid off in a big way!

Of the 10 sectors, energy shares actually lost 23% of their value in these five years of bull market returns.

If you are employed in the tech sector, it’s wise to examine your overall exposure personally to its risk. If you work in the tech sector, your job is obviously tied to the continued growth of the sector. Plus, you also may receive shares or incentives to buy your company stock as part of your compensation plan.

The growth in value of your tech investments could lead you to concentrate too much of your wealth in one sector.

It’s just a risk that is often overlooked.

Longtime workers in the energy industry who concentrated their wealth on the oil economy for the past five years are undoubtedly regretting that they overlooked that risk.



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The 13 asset classes shown here ranked by returns make a case for diversification.

The risk of being overweighted in shares of commodities-related companies, that make the raw materials of tangible goods we buy and food we eat, were huge losers.

Shares in crude-oil-related companies in the five years ended September 30th, 2019 lost a stunning two-thirds of their value.

MLPs mostly own energy-related investments, which explains why they fell in value.



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Investors could be in for permanently lower yields on bonds because the low-yield trend is tied to slow-moving demographic trends.

In contrast, however, the U.S. baby boom will spawn an echo-boom generation that is unique among the world’s major economies. That’s a strong positive fundamental economic factor to consider for long-term American investors.



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Since September 2018, manufacturing activity plunged from a record-high of 61.3%. Last week’s manufacturing activity report showed further deterioration, from 51.2% in July to 49.1% in August, and the press covered it widely.

This monthly manufacturing data series from the Institute of Supply Management, which certifies purchasing management professionals employed across the U.S. and globally, is designed to signal a recession when it falls to less than 50%. In the last three decades, it has predicted six of the last three recessions.

Over the last three economic cycles, the ISM Manufacturing Index dipped below 50% six times and was not followed by a recession three out of those times; rather, it soared again and after it dropped to less than the 50% recession signal.





Past performance is never a guarantee of your future results. Indices and ETFs representing asset classes are unmanaged and not recommendations. Foreign investing involves currency and political risk and political instability. Bonds offer a fixed rate of return while stocks fluctuate. Investing in emerging markets involves greater risk than investing in more liquid markets with a longer history.