Category Archives: Market Comments

Is the United States Dollar in Trouble? Nah

After a monstrous run up against almost all other currencies as the FOMC (Federal Open Market Committee- Bernanke now Yellen) began raising rates ……. as a side note and preview of our headline article in our coming Newsletter, this creates headwinds for international investments as well … we digress … recent weakness has brought out the “Chicken Little’s

This chart from 2012-2015

9-16-17 US Dollar Run up 2012-2015

Year to date 2017, the United States Dollar has dropped against other currencies as our international friends begin to pick up their economic pace. Of course this creates chicken little dramatic comments of ….”The US Dollar sky is falling”

YTD 2017 US Dollar

9-16-17 US Dollar YTD 2017

The move up from 70 to 100 (First Chart) is much greater than from 100 back to 92 (Second Chart), but lets look longer term, from a fellow blogger and former chief economist, Scott Grannis…

20170907_150433563_iOS

Not only is the US Dollar not in trouble, over the long term it is still overvalued.

US Dollar in trouble? Nah, not a worry … still overvalued by many!

Have a Great “More Normal Dollar” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

August 2017 Podcast Video, Financial Planning and Capital Market Update- By John Kvale

Here is our August 2017 Monthly review.

August 2017 Video

Financial Planning Tip(s)-

1 Minute Video Series – Six of them to be exact

Over the last six weeks we had fun recording our first series of videos on our New Total Vault …. A total of Six to be exact!

  1. Finding your Cool New TOTAL Vault
  2. Resetting the Password on your Cool New TOTAL Vault
  3. Uploading Important Docs to your Cool New TOTAL Vault
  4. Connecting outside Accounts to your Cool New TOTAL Vault
  5. Running nifty reports from your Cool New TOTAL Vault
  6. Constant Improvements coming from your Cool New TOTAL Vault

All of these can be found using our search feature on our blog here or here at our main website.

Capital Market Comments

The “Natural” rate of Employment/Unemployment

In this post during the month we take a deep look at the Unemployment rate and just why it was not different this time, but why it took so long to normalize.

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It is not to much of a stretch to think normalization took longer because it has been such a slow recovery. VERY SLOW — this recovery is the far right weak line with the lowest slope.

JPMorgan GDP expansion chart

See you at the end of September.

Happy Summer!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

Natural Rate Of Unemployment/Employment ?

Post great recession of 07-09, many including ourselves were not certain just what the rate of Employment or Unemployment the US economy would run at in the future.

  • It was different this time many said?
  • Technological advances and replacement would push many out of employment?
  • Aging demographics may push the rates to different/higher/lower levels?

With almost 10 years in the books since the great recession began, we now know just what did change? Not much!

Full Employment/Unemployment history

Taking a look at this chart from FRED a research tank at the St Louise Federal Reserve, while it took longer to get back to historical levels, it finally has.

Granted there can be debates on the scope of the current employment rate, but from a high level measure stick such as this, it looks normal.

This longer term fantastic chart from this research report of the San Francisco Federal Reserve, shows the same.

 

Why did it take so long to normalize?

One good question many have asked is why did it take so long to normalize again?

The great recession was just that, so GREAT, it really put dents in the economy making this one of the slowest recoveries on record.

The weakest recovery line (slowest and lowest in the chart) represents this recovery. (This chart from our friends at JPMorgan.)

JPMorgan GDP expansion chart

The good news about such a slow recovery is that is has also become one of the longest, due to just that fact, slow and gradual, and certainly not overheating!

Have a Great Full Employment Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

 

 

 

Natural Rate of Employment … Eclipse … Last day of freedom from my gang (School Starting) … Friday

Post great recession of 07-09, many including ourselves thought a new natural (higher) rate of unemployment might be in the cards.

Given a decade of history in the books since the start of the great recession, a more clear and somewhat surprising answer has occurred. Look for a detailed review next week.

Eclipse20170823_001200000_iOS

What a neat experience to see the Eclipse this week… of course with appropriate protective eyewear. Nice picture Sophia..

While not sure if it is the summer season or the magnitude of the eclipse across the country … no matter, the capital markets almost came to a screeching halt, at least in trading during the afternoon of the eclipse.

There truly are humans behind those trading machines still .. see our AI review here too for more insights.

Good bye Summer – Last day of Freedomend-of-summer-1-1235145

According to my just about fourth and seventh graders, freedom comes to a halt today, as next week starts the school year grind for them…

  • Early to bed
  • Early to rise
  • Standard schedules –
  • Homework
  • Friends and fun

Doesn’t sound all that bad … only 180 more days to go! Ouch … Oh well!

That is all next week … and today is a Friday heading into the last weekend of freedom … I Guess?? (haha) Enjoy!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
www.jkfinancialinc.com
www.street-cents.com

 

Why we like Skepticism preview … Extended Remote Work ending …. Friday …

We welcome Skepticism and enjoy reading and listening to almost all points of view. Frequently in today's "Breaking News" sound bites, only the most dramatic are consumed  in our busy lives day …

Next week we will discuss in great detail our view on Skepticism, cynicism and give a few fun to pokes at "Breaking News".

Remote Working Ending20170802_124105025_iOS

Thanks to technological improvements and a smaller world, our annual extended remote work, visit with family and fellow professionals, went off without a hitch again this year … sixth year… hopefully we can make it seven in 2018!

This weekend brings the journey back home, which also means the school grind is getting close to starting up… much to the sadness of a few in our household… but its all necessary and good!

One Minute Video Series Continues

Next week we continue our 1 minute fun New Total Vault Video series… which is also being posted on our New Updated Website here

Ahhhh … but that is next week, summer is not over YET… still lots of hot days for us … enjoy your weekend .. Pool anyone!

Have a Great Friday!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.

A Dallas Texas based fee only

Financial Planning Total Wealth

Management firm.

www.jkfinancialinc.com

www.street-cents.com

Earnings Review … aka 90 day Treadmill … Revenue the missing link, found?

As mentioned Friday, earnings are the key drivers to asset growth and appreciation.  While we do not want to get into the weeds too much on this, continued growth bodes well for continued market appreciation… and maybe growth into the Frothy valuations.. From our fantastic friends at Factset.

Earnings Growth for the Immediate Quarter Looks Great

While a very short term time frame, (3-5 years is our normal time frame) this 90 day treadmill aka earning season chart shows the move upward in expected earnings growth rate. Continued movement at this rate would certainly help us grow into the current valuations.

 

8-4-17 Factset Earnings Growth Q217

Nice move!

EPS- Earnings Per Share

Ok, sure the EPS Earnings Per Share- solid line is moving down as time has passed for this quarter, BUT, the scale is very narrow and the amount of lowered expected EPS growth is only slightly less…

8-4-17 Factset Change in Q317 eps

Before looking too much into this, the lower line is a tiny move due to the frame size!

Revenue/Sales Growth FINALLY?

Be it the Great Recession lingering effects, demographics, economics, world growth or technological advances, Sales or Revenue has been missing during this economic recovery. In reviewing this chart, Energy, bouncing back from a much lower price just a year ago is making up much of the sales increase, however other sectors are chiming in too. Could this FINALLY be the sales increases we have all been waiting for? Compliments to all company managers for cutting expenses in order to maintain profitability, however there are only so many cuts that can be made. If sales increases continue, this would provide much needed breathing room for managers.

8-4-17 Factset Rev Growth 2017

Sales growth has been absent this recovery, making for HUGE challenges for corporate managers

 

Time will tell! So far its looking good!

Have a Great “Growth in Earnings” Day!

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
http://www.jkfinancialinc.com
http://www.street-cents.com

 

 

 

 

 

Earnings, a key driver to Capital Markets/Asset Appreciation … Friday

By a lot of metrics, capital markets may be frothy (our term), overvalued, or some even saying a “Bubble” (WAY over used in our opinion) ..
With a long term average of 15, a 24.6 Price to Earnings ratio (Prices divided by cumulative earnings of the capital market), the bluntest valuation instrument MAY be frothy.

BUT if earnings continue to grow, it would be logical for assets to at least maintain their levels and possibly even continue to appreciate, ESPECIALLY if the future looks bright!

Those steep declines represent a corresponding decline in asset prices… note this chart is going back to the 1800’s … we like long term views such as this…

Next week we will review the “here and now” of earnings and growth/sales  as we are in the middle of the 90 day treadmills we call earnings season….

Ahh… that is next week, today is Friday, enjoy your summer weekend !

John A. Kvale CFA, CFP

Founder of J.K. Financial, Inc.
A Dallas Texas based fee only
Financial Planning Total Wealth
Management firm.
http://www.jkfinancialinc.com
http://www.street-cents.com