Hello Friend ,
We hope this note finds you well. On a very “busy” day in the markets we wanted to pass on a quick, “what are we thinking” note. Our apologies in advance for the impersonal nature of his letter but wanted you to know we are always thinking of you.
To start with, at the risk of sounding dull and boorish, my comments on the current “noise” in the markets may seem unemotional or downright boring but things have been so relatively calm it gives us something to write about.
With respect to all the “experts” in the media creating the current market “noise”, let me pass on some facts and thoughts as we keep things in perspective and “Tune out the Noise”.
You will not hear the facts listed below in the media, as they are boring and don’t create the “angst” and nervous energy..aka “fear”..that the media must create. The “media’s” goal is to keep their viewers staring at their moving charts, listening to the obnoxious background noise of the some trading floor and most importantly watching their income producing commercials without which they would have no jobs.
Let me allow you to skip the news for a few days:
The current volatility put into perspective translates to a market that, even after the recent past few days, is still up double digits year-to-date with well over half the year remaining.
Just 10 days ago there was the government “May Jobs Report”. Here’s what it showed.
- Unemployment rate fell to its lowest level in half a Century.
- (This is the longest streak of job creation in modern times.)
- Over 263,000 Jobs created in the Month of April, this was well over analyst forecast.
- The unemployment rate sank to 3.6%.
This report is just 10 days old but not even a sliver of this report is incorporated into current news on the “China Tariff” war as they call it. I’ve been in a war and this is not a war.
This is a “Trade Negotiation.” Nothing more, nothing less. This period of “negotiations” with China are just that…negotiations. Ever buy a house or sell a business? Sellers will think the Buyer is being unreasonable. Buyers will think the Sellers is being unreasonable. But at the end of the day, a deal is struck and everyone moves on. It’s called a “negotiation” and these discussions with China are decades over due and everyone in congress knows this.
In regards to the state of our economy, the “facts” are that the current economic expansion does not resemble past market and economic booms. Not even close.
We do not see the “irrational exuberance” past boom cycles are known for near their ends. The pace of this recovery since the 2009 market lows has been weaker than periods in the 1990’s…and this is a good thing.
The upside of slower growth, in my view, will be a longer, more sustainable economic expansion. The markets will have their natural up and down cycles but market history is completely on our side. No crystal balls here but the current media frenzy that the “tariff’s are going to destroy the markets” do not add up. These trade negotiations are just a part of longer, historical market process that is just that…a process.
We have a good understanding of this process and have guided you through past, present and what will be future natural market cycles. A process is a process.
As always, if you have any questions or concerns you feel have not been addressed, please give us a call. We are always here for you.
Gregory, Gabriella, Brian, Chris and Samer