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Week of November 18th – 22nd

  • Through Thursday, the SPDR S&P 500 exchange-traded fund (ticker: SPY) had returned 25.88% since the beginning of the year, Morningstar calculates. With big tech stocks leading the way, the Invesco QQQ Trust (QQQ), which tracks the 100 biggest Nasdaq stocks, showed an even larger 31.54% return.
  • The SPDR Dow Jones Industrial Average ETF (DIA) trailed a bit with a 21.41% return. Investors in U.S. equities were up $6.2 trillion in 2019, according to Wilshire Associates’ calculations. And diversification, always a prudent course, didn’t detract much in terms of performance. A portfolio of 60% SPY and 40% iShares Core U.S. Aggregate Bond ETF (AGG) would have returned 18.91% through Thursday.
  • At the same time, nominal gross domestic product is growing at a 3.5% pace. That means the money supply is rising faster than the economy, leaving lots of excess liquidity for financial markets. “This makes it extremely difficult to short risk assets,” he writes. A lot of that monetary growth represents money-market funds, which total $3.6 trillion, up 22% from a year ago and close to the peak of $3.9 trillion, hit in March 2009 at the bottom of the bear market. “Current cash levels are yet another indication that we are far from the euphoric stage that usually signals a major bull market top,” Trennert concludes.
  • With the rise in stocks and home values, Evercore ISI estimates, Americans’ net worth is on track for a 10.4% gain from the level a year ago. That alone should inspire gratitude, even in these contentious times.
  • Slightly better growth, limited recession risk, and friendly monetary policy should provide a decent background for financial markets in the early part of 2020. Goldman Sachs
  • lobalization has brought up correlation. Is this good?
  • Alibaba raised about HK$88 billion ($11.2 billion) in its Hong Kong share sale, marking the biggest equity offering in the financial hub since 2010. The company confirmed it priced 500 million new shares at HK$176 each. That’s 2.9% less than the last close of its ADSs in New York, with each equal to eight ordinary shares.
  • GDP Q4 revisions. Europe wins!
  • Oil is up 10% in the last month
  • Target, Nordstom, Walmart into the model portfolio
  • Cristine Lagarde is urging EU nations to increase fiscal spending
  • Impeachment. Short Week. China US
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