CPK Market Action Report: July 2019

Markets are up as risks rise and trade tensions diffuse. Are you positioned to take advantage?

Your 3-minute Market Action Report starts now:

Investor risk is on the rise as markets reach new highs and trade talks spark renewed optimism. Are you positioned well to take advantage of these big gains?

Well, that action starts NOW!

After a disappointing May, U.S. stock markets roared back in June. The S&P 500 picked up 6.9 percent and the Dow Jones Industrial Average rose 7.2 percent, and the NASDAQ Composite gained 7.4 percent.

During the month, the S&P 500 reached a record high. Additionally, the Dow Industrials and NASDAQ Composite came within a whisper of their historical peaks.[1]

So, what fueled the rally? Two factors:

Optimism over a potential interest rate cut by the Federal Reserve and a growing belief that the U.S. and China are actively working to solve their tariff dispute.

Stock prices opened the month lower, but soon climbed on hopes that the Fed would cut short-term rates.

News that the US would not impose further tariffs on Mexican imports also helped the rally.

Stocks did lose a little bit of momentum due to escalating tensions in the Middle East, only to rise again on the news of President Trump’s positive phone call with China’s President Xi.

Wall Street, however, finished the month mixed, as all eyes turned to the G20 summit.[2][3]

While markets applauded the progress on trade, attention in June shifted to the Federal Reserve and what’s next for short-term interest rates. The Fed kept the federal funds rate unchanged at its June two-day meeting, and followed that up with a “dovish” statement indicating it would take appropriate actions to sustain economic growth.[4]

Since markets have already assumed a future rate cut is inevitable, the potential for volatility may increase if the Fed continues to hold steady on rates.[5]

So for the rest of this month, I’ll definitely be keeping a close eye on the Fed for any signals it may send investors. My attention will remain on the domestic and international equities.

On the domestic front, I will focus on Large Cap Growth, Small Cap Growth and Mid Cap Growth. In particular, I will be interested in the Technology, Utility, Industrial and Communication Services sectors.

As for International Equities, my focus will remain on Asia-Pacific Emerging Markets and European Emerging Markets.

Keep in mind, nothing I talked about today is a recommendation. My interests may change as I continue to monitor the Fed’s moves and trade talks.

Regardless of what happens next, investors like you need to have a simple and yet solid financial plan that reduces risks, costs and taxes while securing the necessary income you need to maintain your lifestyle throughout retirement. If you don’t have a plan, or you're not comfortable with the plan you have, call me today to get pointed in the right direction.

I'm Chad Kunc and that puts a wrap on the July 2019 Market Action Report. Thanks for joining me. It’s time for me to get back to the markets.

And that action starts, NOW!